HCP In Hot Water Again
We are sure that management at HCP, Inc. is happy that they spun out the HCR ManorCare assets to a new REIT, since they have not had to deal with the continuing rent shortfall, which started when HCP still owned the assets. But leveraged investments of any kind seem to be taking their toll across the board. From July 2012 through May 2015, HCP funded a total of $257 million under a collateralized mezzanine loan facility with Tandem Health Care. This loan matures in nine months and has a weighted average interest rate of 11.5% (ouch). In tandem with this loan, there is a $257 million syndicated senior loan that matures in six months. Through sales of various SNFs, most of the net proceeds... Read More »
Contemporary Healthcare Capital Closes Two Mezzanine Loans
Contemporary Healthcare Capital (CHC) announced two small mezzanine loan closings for clients in the Southeastern United States. First, in Anniston, Alabama, the firm closed an $830,000 loan to fund the acquisition of a 56-unit assisted living/memory care community. Then, to Palm Coast, Florida, where CHC arranged a $2.985 million mezzanine loan, with the help of Peninsula Alternative Real Estate, for a to-be-built 64-unit memory care community. CHC’s lending partner, United Community Bank, provided both loans. Read More »
KeyBank Real Estate Capital Refinances Two Pennsylvania Properties
A large regional owner/operator in the Northeast refinanced two of its senior care facilities through HUD, with the help of John Randolph of KeyBank Real Estate Capital. Located in Pennsylvania, the properties include a 180-bed skilled nursing facility and a 120-bed skilled nursing facility, the latter of which also features a 73-bed independent/assisted living wing. Mr. Randolph arranged $57.7 million in HUD financing to pay down a portion of an existing bridge loan, originally secured by KeyBank’s Henry Alonso and Brandon Taseff, that was used to fund the initial acquisition, and subsequent recapitalization, of a portfolio of healthcare facilities located in the Northeast. Read More »
Slowest Q4 For Senior Care M&A Since 2014
Despite a strong December, when we recorded 30 long-term care transactions, the fourth quarter of 2017 was slow by all recent standards. These are preliminary numbers and may be revised upward in the coming weeks, but with just 69 announced acquisitions, Q4:17 was the least active quarter in terms of number of transactions since Q2:14, when we recorded just 63 deal announcements. Compared to the previous years’ fourth quarters, 2017 fell short significantly, down from the 93 deals recorded in Q4:16 and from the 108 deals recorded in Q4:15 (the all-time high for a quarter). There were few high-priced deals, as well, with the largest of the quarter (Mainstreet’s $425 million acquisition of... Read More »
Sabra Health Care REIT Sells 20 More Genesis SNFs
After already announcing that it has put on the market 35 of its properties leased to Genesis Healthcare, Sabra Health Care REIT has successfully sold 20 of them to an undisclosed buyer for $103 million. The memorandum of understanding with Genesis to market and sell these 35 properties followed Sabra’s merger with Care Capital Properties and was aimed, clearly, at reducing the Sabra’s lease exposure to Genesis. With this deal, which featured skilled nursing facilities in Kentucky, Ohio and Indiana, Sabra’s annual rent from Genesis is reduced by $9.3 million. Plus, the deal is on top of the sale of four other facilities under the memorandum of understanding in the second half of 2017.... Read More »
Two 2018 Transactions From Senior Living Investment Brokerage
Senior Living Investment Brokerage rang in the New Year with two transactions closed, one on the west coast and one on the east. At a price of $1.5 million, or just over $23,000 per bed, a 65-bed skilled nursing facility in Cashmere, Washington sold to a regional owner/operator based in Idaho that is seeking to expand its presence in Washington State. Built in stages in 1962, 1976 and 1984, the facility was 91% occupied but losing money. It did, however, bring in nearly $3.9 million of annual revenue and the four-acre property provides room for expansion, so there is opportunity to add value. The buyers certainly left themselves some wiggle room with that price. Jason Punzel, Brad Goodsell... Read More »
Greystone Closes HUD Refinance For Large New York SNF
After working to close a $16.5 million HUD refinance for a 216-bed skilled nursing facility in Dunkirk, New York (Buffalo MSA) last month, Greystone’s Fred Levine closed another HUD loan for another large New York SNF. Located in Suffern, on the border with New Jersey, the facility consists of 203 beds and is the largest subacute care facility in Rockland County. Situated on six acres, it offers orthopedic rehab, cardiopulmonary rehab, wound care, concierge services and veterans programs, all under the management of CareRite Centers. To help fund renovations, and provide meaningful debt service savings, Mr. Levine arranged a $23.52 million HUD loan, with a fully amortizing 33-year... Read More »
Senior Care Stocks Swoon….Again
The 2017 Trump rally has left senior care and healthcare REIT stocks behind. It looks like the so-called Trump stock market rally is continuing into 2018. Weirdly, several senior care stocks shot up in the first day of trading yesterday. Where were investors last year? Unfortunately, 2017 was about as bad as it gets for our sector. Only one company posted an increase in price, and that was Kindred Healthcare, which is actually exiting our sector with its last sales of its SNFs. So, everyone else declined, and almost all of them by double digits, in a year when the rest of the market posted extraordinary returns. The NASDAQ Composite was up 28.2%, the Dow was up 25.1% and the S&P 500... Read More »
The Ensign Group Receives $112 Million In HUD Financing
Lancaster Pollard recently assisted The Ensign Group in a large $112 million portfolio financing arranged through HUD. The 30- and 35-year term loans were secured by mortgages on seventeen Ensign-owned properties and came with low, fixed interest rates. Ensign will use the loan proceeds to pay down previously drawn amounts on its revolving credit line, and the financing provides the company liquidity on a portion of its owned real estate. The proceeds will also fund future acquisitions and renovations, as well as other working capital needs. The company’s acquisition appetite seemed to wane slightly towards the end of 2017 (five deals announced in the first six months, versus two in the... Read More »
Not-For-Profit Buys Privately Owned Florida Community
Private to not-for-profit transitions certainly constitute the minority of senior care transactions, but it was nevertheless the case for a 190-unit independent/assisted living community that sold in Deland, Florida. Mike Pardoll of Marcus & Millichap represented the previous private owner/operator (who also developed the property), and sold the community to a 501-C3 for $19 million, or $100,000 per unit, with a 10.1% cap rate. The original seven-story 124-unit building was built in 1986, and a four-story (70-unit) addition was constructed in 1996, with a common area connecting the two buildings. Currently, four of the units are used for corporate purposes, lowering the total resident... Read More »Schedule a demo
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