MedPAC Margin Myopia
Too much focus on Medicare margins results in MedPAC’s recommendations ignored every year. The Medicare Payment Advisory Commission (MedPAC) does a lot of worthwhile research as it relates to health care and Medicare. But the commissioners must get tired of banging their heads against the wall year after year when it comes to their recommendations to Congress for Medicare payments to SNFs. For years, they have believed Medicare payments to nursing facilities were too high, and every year recommend cuts or no increases. This year was no different. MedPAC recommended no increase in SNF payment rates for two years. This was partly because they believe Medicare margins are too high, and... Read More »
More Seniors Housing in Sarasota
Sarasota, Florida, is getting another seniors housing development, set to open in 2019. The resort-style community will feature 82 independent living, 56 assisted living and 34 memory care units, along with a host of amenities that include a variety of dining options, a clubroom with a fireplace, a spa and fitness center with an outdoor pool, a theater and massage/exam rooms for rotating wellness providers. Ryan Companies is developing the property, with Grand Living as the operator. The team of David Fasano, Sarah Anderson, Ryan Maconachy and Chad Lavender of Holliday Fenoglio Fowler worked on behalf of Ryan Companies to arrange a $16.7 million joint venture equity partnership with Eagle... Read More »
The Risk of Older SNFs
One would think that the newer skilled nursing facilities would sell with lower cap rates, but that has not always been the case. As can be seen in the graph below (from the just-published 23rd Edition of The Senior Care Acquisition Report), in three of the past five years those nursing facilities over 40 years old sold with the highest average cap rate, and in the two years when they didn’t, all the cap rates were closely clustered. The youngest nursing facilities (less than 20 years old) did not produce the lowest cap rates in many of the years, however. The main reason for this is that when some buyers look at the new skilled nursing facilities, they may be paying a high price per... Read More »
Capital One Bridges to Agency Financing
Capital One pulled double duty for its client, Healthcare Trust (HTI), arranging more than $145 million in total financing. First, back in December, the firm served as administrative agent and sole lender for an $82 million senior secured credit facility, which provided bridge-to-agency financing for a 23-property seniors housing portfolio located in six states (primarily Michigan and Iowa) in just five weeks. Fast forward to this month, when Capital One added seven of those properties to HTI’s existing Fannie Mae credit facility. The transaction increased the total facility by $64.2 million, to $216.6 million. Read More »
Tryko Partners Grows Again
A few weeks after HCR ManorCare filed a pre-packaged bankruptcy petition, yet another one of its skilled nursing facilities has been sold. This facility is located in Yeadon, Pennsylvania, which is outside of Philadelphia, and Tryko Partners was the buyer. Built in 1995, the 129-bed facility is located adjacent to Mercy Fitzgerald Hospital, which is part of the Mercy Health System. Apparently, this was not one of the underperforming facilities operated by HCRMC, as it maintained a four-star rating from CMS and a five-star rating for quality measures. Nice to hear. Tryko’s affiliate, Marquis Health Services, will operate the facility and they expect to invest more than $2.5 million in the... Read More »
KeyBank Does It Again
KeyBank Real Estate Capital arranged HUD financing for an eight-property skilled nursing portfolio with 1,063 beds in Texas. The loan amount was $90.8 million, or about $85,400 per bed. KeyBank was the lead in a syndicate of lenders that provided a $315 million bridge loan to a joint venture between Capital Senior Ventures and BlueMountain Capital Management to buy a portfolio of 30 facilities. This latest financing was used to pay off the remaining balance of that bridge loan. John Randolph led the KeyBank team on the financing, which included Grant Saunders and Peter Trazzera from Key’s Healthcare Group. Read More »
Grandbridge Provides Permanent Refinancing
Speaking of backyards, Grandbridge Real Estate Capital arranged $35 million in Freddie Mac financing for a one-year old assisted living and memory care community in Norwalk, Connecticut. The 10-year, fixed-rate loan has a 30-year amortization. The community is located a mile from our main office. The property was developed by The Shelter Group and its affiliate, Brightview Senior Living, is the manager. We know it well because we had a tour when it opened and attended the first open house. It was built on a very tight piece of land, but they were able to take advantage of the topography for some unique outdoor areas. We assume it is at or close to stabilization otherwise Freddie Mac would... Read More »
Evans Senior Investments Closes One In Their Backyard
It is not often that a seniors housing brokerage firm can sell a community in their home town, but the Boulder, Colorado office of Evans Senior Investments was hired to sell a 54-unit independent living community in Boulder. The community, built in 2007, has been averaging an occupancy rate of 93% to 94%, but may have been slightly higher at closing. That high occupancy rate might have something to do with the fact that the majority of the units have two-bedrooms and the majority have more than 1,000 square feet inside the units. Rates range from about $3,000 to $4,500. With an operating margin close to 50%, this must be a very well-run community, since it is also quite small for... Read More »
Thoughts On NIC Dallas
The recent spring NIC conference in Dallas was a little more sober than recent conferences. Coming right after Brookdale Senior Living’s various announcements and stock plunge, plus the bankruptcy filing of HCR ManorCare, some people were a bit more circumspect about how the sector was doing. I did continue my poll of private company CEOs and the impact of the flu season on operations. Still batting 1,000, as everyone I asked said the flu was having minimal, if any, impact on census. It was the other factors we highlighted in the March issue. There was something else we noticed. The traditional sessions on things like private equity investing or lending to the senior care market were... Read More »
Florida Attracts Buyers
Florida continues to be a popular state for acquisitions, especially in the cold winter months. Krone Weidler of Marcus & Millichap’s National Seniors Housing Group recently sold a two-property portfolio. The first one was a 90-unit assisted living community in Venice which sold for $6.1 million, or about $67,800 per unit. The community was originally built in 1926 and then renovated in 1995. Occupancy stands at 92% and it is located in the historic section of Venice. It has a total of 40,440 square feet, and sold for $150.84 per square foot. The second property was a 100-unit assisted living community in New Port Richey which sold for $4.3 million, or $43,000 per unit. The... Read More »Schedule a demo
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