Gross Income Multiple Falls For Seniors Housing Deals
A popular multiple that investors use to measure the value of a seniors housing and care property is the Gross Income Multiple (GIM). So, as prices have stayed consistently near record-highs for seniors housing (independent living and assisted living) properties, how much were buyers paying with respect to the properties’ revenues? In 2016, according to the 22nd Edition of The Senior Care Acquisition Report, the average GIM fell 15 basis points to 3.75x from the 3.9x recorded in both 2014 and 2015, widely considered the height of the seniors housing bull market. The median fell by a larger degree (30 basis points) and to a level not seen since 2011, when it was also 3.2x. Understandably,... Read More »Recent Senior Care M&A Deals, Week Ending June 9, 2017
Check out our recent senior care M&A transactions! Long-Term Care AcquirerTargetPrice Granite Investment GroupTabor Crest Memory CareN/A CareTrust REIT, Inc.The Rio at Cabezon & The Rio at Fox Hollow$27.3 million National Health Investors, Inc.Assisted Living Community$10.4 million Hernandez Family VenturesPointe North Gables$7.8... Read More »
Public Companies Spring Into Action This June
Public companies have made a statement so far in June, with a couple of REITs, one publicly traded operator and two foreign firms announcing acquisitions this week. First, across our border, Ontario-based Sienna Senior Living added one more Ontario retirement community to its portfolio. The 70-unit community in the town of Kingston sold for approximately $7.27 million, or $103,860 per unit. Then, across the Atlantic, Paris-based senior care operator Korian added about 1,000 beds, and eight long-term care/assisted living facilities, to its Belgium portfolio, which now numbers over 9,500 units. The Senior Assist group sold the facilities, five of which opened in the last 18 months. Now to... Read More »
The Future of Medicaid Block Grants
Our editor Steve Monroe moderated a webinar on June 8 called “Skilled Nursing Reimbursement Under Trump Care” with panelists Joshua Jandris of IPA Seniors Housing and Marc Zimmet of Zimmet Healthcare Services Group, where they discussed Medicare reimbursement changes, the future of Medicaid managed care plans and the next shoe to drop on the reimbursement front under a Trump administration. If you are interested in hearing the 90-minute discussion, you can purchase the webinar here. During the webinar, Mr. Monroe brought in the audience to voice their opinion too, and here are the results: Do you think Medicare SNF payments should basically fund the shortfall of Medicaid payments, such as... Read More »
BMO Harris Funds PGIM Real Estate Deal
PGIM Real Estate and Kisco Senior Living announced their acquisition of a 187-unit independent/assisted living community in Walnut Creek, California at the start of June, and BMO Harris Healthcare Real Estate Finance followed that up by announcing they financed the deal with a $61.75 million credit facility. The group acted as the administrative agent and lead lender on the facility which consisted of a $50.05 million term loan and a $11.7 million construction loan for a planned 40-unit expansion of the community’s assisted living and memory care services on the adjoining 1.22 acres. Located on a 7.3-acre campus about 20 miles east of San Francisco, the property was built in 1991 and had... Read More »
Blueprint In Buchanan, Georgia
Trent Gherardini of Blueprint Healthcare Real Estate Advisors assisted a long-time owner of a skilled nursing facility in Buchanan, Georgia in the sale of the asset for $2.7 million. The facility was originally built as a hospital in the 1960s, until the seller converted it to a 60-bed SNF in the mid-1980s. It reportedly had a good reputation in the area, attractive quality mix and strong history of cash flow, but its age, 80% occupancy and location in rural west Georgia probably kept the price down to about $45,000 per bed, or less than half of the national average for SNFs sales in 2016 ($99,200 per bed). The owner and its operator decided to sell in advance of the lease expiration... Read More »
Skilled Nursing Reimbursement Under Trump Care
Record prices per bed for skilled nursing facilities don’t seem to make sense given the reimbursement changes looming. The skilled nursing acquisition market has been booming for the past few years, with back-to-back-to back record average prices per bed. But with all the uncertainty surrounding the future of Medicare reimbursement, not to mention Medicaid and the potential for block grants, it does seem odd that there is still so much interest in the skilled nursing market. Reimbursement, however, isn’t the only story, and there are many providers, despite the reimbursement uncertainty, who can take over a facility and still increase revenues, increase reimbursement rates and... Read More »
Birchwood Moves Into Forest Park
Equipped with a new roof and a new upgraded license, a 50-unit assisted living community in Forest Park, Georgia sold to Birchwood Healthcare Properties for $4 million, or $80,000 per unit. Originally built in 2000, the community was owned by a local doctor, who has decided to exit the business after retirement from his medical practice. The community was just 75% occupied, and it brought in under $50,000 in EBITDA on approximately $1.7 million of revenues, for an operating margin of just 3%. So, operations could obviously improve. The community has received significant capital upgrades to its exterior over the past five years, including a new roof, and has also upgraded to a new assisted... Read More »Greystone Refinances Queens Skilled Nursing Facility
A couple of years after Greystone financed the acquisition of a 302-bed skilled nursing facility in Queens, New York, the lender came full circle in refinancing it with a $59.8 million, or a whopping $198,000 per bed, HUD loan. Fred Levine of Greystone originated both the original bridge loan and the permanent financing on behalf of the borrower, Kennedy Management, a healthcare company owned and operated by the Fuchs family. Since the 2015 acquisition, the owners renovated and rebranded the facility, which now boasts many luxury features such as a dedicated concierge, resident lounges, bedside iPads and valet parking. The facility also offers a 40-bed ventilator unit and a 12-chair... Read More »Cash Flow Is King
Many buyers prize a community’s cash flow over other factors. If a community is already making money, and avoids any major missteps, it is probably a safe bet for investors. Neither 2015 nor 2016 reached the record average NOI per unit set in 2014 of $14,200 per unit, but in a year when the average price per unit for seniors housing (including both independent and assisted living) increased, it makes sense that NOI per unit would increase in turn, by $500 per unit from 2015 (11,700 per unit) to 2016 ($12,200 per unit). Separating it out by sector, one would think that if independent living prices rose by $35,300 per unit, or 18%, one would see a corresponding increase in the NOI per unit... Read More »Schedule a demo
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