Flashback Friday: The Seniors Housing Development Boom Begins
Seven years ago, this month, the first signs of life in the seniors housing development market showed themselves after a barren few years following the depths of the Great Recession. We’re sure none of you want to get back in the recession mindset, but the myriad economic issues facing the industry meant that a construction comeback was by no means a sure thing that soon into the recovery. We detailed some of those issues too in the May issue of The SeniorCare Investor: “After all, what lender would want to take on the risk of the unknown in an uncertain economy with a still weak housing market? In addition, feasibility studies may have been able to pinpoint market demand six years... Read More »
Clousing and Byrne Close Pair of Peach State Sales
Senior Living Investment Brokerage’s Bradley Clousing and Patrick Byrne sold a pair of personal care facilities in the Peach State. Both communities were losing money, largely as a result of heavy competition. It didn’t help that they were both built in the late-1990s, which is now considered to be old. The seller, MedProperties, even invested in updates over the years, but in the end decided to exit the operational outliers. The first transaction featured a 64-unit assisted living/memory care community in Sandy Springs, an affluent suburb north of Atlanta, a notoriously overdeveloped market. MedProperties had acquired the community in 2012 for $6.6 million when it was operating at a 21%... Read More »
Dwight Capital Provides Two Bridge Loans
Dwight Capital closed a couple of bridge loans for skilled nursing clients in the Midwest. First up, the firm arranged a $3.77 million loan for a senior care facility in Beloit, Kansas. Built in multiple stages from 1971 to 2004, the campus includes 110 units and 116 beds of assisted living and skilled nursing. Then, in Gary, Indiana, Dwight Capital secured a $4.02 million bridge loan for a 100-bed SNF to pay off existing bank and partnership debt. It was originally built in 1969 and renovated in between 1973 and 1980. Perhaps another renovation is in store? Read More »
HJ Sims In It for the Long Haul
When a CCRC in Norfolk, Virginia wanted to launch a major $200 million expansion of its campus, it turned to its long-time partner HJ Sims to finance the project. The two go way back (to the early 2000s), with Sims structuring, placing or underwriting the initial seed capital transaction, the first phase of development financing, a refinancing in 2014 and finally, the current development financing. This transaction saw Sims arrange a $100 million draw-down bank loan, coordinating with SunTrust Bank and TD Bank. SunTrust served as administrative agent and provided $65 million of the financing. Then, Sims underwrote $101.1 million of fixed-rate bonds, resulting in over $500,000 in savings on... Read More »
Class Act for Washington State?
Washington has passed its version of a long-term care insurance bill, sort of, using a payroll tax to fund it. Unlike the misconceived Class Act that was originally part of the Affordable Care Act, which was designed to rob Peter to pay Paul, Washington State has just passed its own version, The Long-Term Care Trust Act. While the intent is worthy, I don’t think it will accomplish its goals. As now passed, the Act will be funded by a payroll tax of 58 cents for every $100 of salary. For someone making $20 per hour, that comes to about $240 per year, and they can least afford it. I have seen no mention of an employer match, but I am sure that is coming. The sponsors claim that family... Read More »
Brunet and Lautner Move to Newmark Knight
Just a few months after announcing the hiring of the HFF seniors housing team to its ranks, Newmark Knight Frank (NKF) just announced that it snagged industry veterans Heidi Brunet and Lisa Lautner from Berkadia. They will join NKF as executive managing directors and will work with Sarah Anderson on the firm’s seniors housing debt and structured finance team. The duo has a combined 40 years of experience and has originated more than $8 billion in seniors housing related financings in the past seven years through Fannie Mae, Freddie Mac, HUD and balance sheet lenders. With the combination of the top brokerage team last year, in terms of dollar value of sales transactions, the NKF platform... Read More »
KeyBank Refinances Western New York Properties
A couple of seniors housing communities in western New York received Freddie Mac financing courtesy of KeyBank Real Estate Capital. Carolyn Nazdin of the firm’s Healthcare Group arranged two fixed-rate loans with 15-year terms and five-year interest-only periods. The first, at $45.8 million, was secured by a 162-unit community in Orchard Park. Built in 1992 and renovated in 2016, it consists of 114 assisted living, 32 independent living and 16 memory care units. The other $20.1 million loan went to a 96-unit assisted living/memory care community in Pittsford that was built 20 years ago. Both loans refinanced existing debt on the properties. Read More »Recent Senior Care M&A Deals, Week Ending April 26, 2019
Check out our recent senior care M&A deals! Long-Term Care AcquirerTargetPrice Armighorn Capital Ltd.Copper Hill Care HomeN/A MED Healthcare Partners LLC4 skilled nursing facilities$28.5 million Afton PropertiesAurora Village Apartments$8.65 million Welltower Inc.Watercrest at Dominion & Isle at Watercrest... Read More »
How Did Buyers Value Cash Flow in Seniors Housing M&A in 2018?
For the seventh year in a row, there was a perfect correlation between the age of seniors housing communities sold and their average net operating income per unit, according to the Seniors Housing Acquisition & Investment Report. This makes sense, given that the newer communities should better reflect the current demand (by unit size, amenities, etc.) and require less capex to maintain their competitiveness. Newer communities also have an easier time attracting good staff and charging higher rents. Those newest communities (built after 2013) had an average of $19,700 per unit of NOI, relatively consistent with recent levels. The next subset of properties built between five and 10 years... Read More »
Lancaster Pollard Keeps the HUD Closings Coming
Lancaster Pollard Mortgage Company just closed its 16th HUD financing since the government shutdown ended in January. They clearly did their leg work during the shutdown, as in the first three weeks following it, 16 of the 25 FHA 232 commitments issued by HUD went to Lancaster Pollard, for a total of $224 million in closings. The latest transaction featured a $17.3 million loan closed on behalf of Tryko Partners for its 171-bed skilled nursing facility in Brick, New Jersey. Over four years ago, Tryko had acquired the facility from Florida-based New Vision for $10 million, or under $60,000 per bed. At the time, it featured 148 skilled nursing beds and 23 assisted living units and operated... Read More »Schedule a demo
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