Skilled Nursing Prices Hold Steady
Despite numerous headwinds, an aging supply and decreasing national census, skilled nursing facility prices stayed remarkably steady in the past four quarters. In the 12 months ended September 30, 2018, we recorded an average price of $81,900 per bed for skilled nursing sales, up 4% from the previous four-quarter period and up 0.7% from calendar year 2017. We saw more of a change in the average cap rate, which dipped below 12% (a pretty rare occurrence) to 11.9%, which is down from 12.55% in the 12 months ending June 30, 2018 and from 12.3% in 2017. The average price is still about 20% off from the sector’s record-high average price of about $100,000 per bed in 2016, which begs the... Read More »
Recent Senior Care M&A Deals, Week Ending November 23, 2018
Check out our recent senior care M&A deals! Long-Term Care AcquirerTargetPrice Crown Healthcare GroupVilla Springfield$6.3 million Care Partners Management GroupMaplewood Gardens$10.75 million Target Healthcare REIT LimitedParris Lawn$17.63... Read More »
Independent Living Prices Drop
Independent living prices dropped in the four quarters ended September 30, 2018, but not as sharply as assisted living did. Buyers paid on average $219,600 per unit for independent living communities, down from a near-record high of $241,300 per unit during the last four-quarter period. Why the smaller drop? The IL market has seen much less development in the space (and has seen more stable average occupancy as a result), and its less staff-intensive model lessens the future labor risks. However, this smaller market is still sharply divided between the luxury, high-rent and high-margin IL communities built in high barrier-to-entry markets, and the more middle-market communities. It’s those... Read More »
KeyBank Keeps It Going
KeyBank Real Estate Capital has been on a roll lately, announcing financing after financing following their successful HUD fiscal year atop the rankings. Their latest closing saw Charlie Shoop and Peter Trazzera close a $31.5 million Freddie Mac loan on behalf of Chicago Pacific Founders to refinance the original balance sheet acquisition loan (also provided by KeyBank) on a 176-unit senior living community in Topsham, Maine. Spread out on 90 acres, the community provides independent living, assisted living and memory care services to its residents. Messrs. Shoop and Trazzera arranged the financing with a seven-year term, variable rate and an open prepayment option during the last two... Read More »
Reis Sells In Spokane
A lower cost provider of independent living and assisted living services in Spokane, Washington, sold with the help of Rob Reis of Marcus & Millichap. Mostly filled with Medicaid residents (over 70% of the census), this community features 220 licensed beds in 210 units on a 2.9-acre plot adjacent to Gonzaga University. Previously owned by Pacific Northwest multifamily investor Kinsel Ameri Properties, Inc., the community was 95% occupied and operated at an approximately 18% margin on $5.1 million of revenues. Pro forma figures have the operating margin increasing to 24%, but with such a high Medicaid census and less rent flexibility being the lower cost provider in the area, the... Read More »
Giving Thanks
We all have a lot to be thankful for. What do I have to be thankful for. First, I want to thank everyone who helped fund our Walk To End Alzheimer’s campaign, where we raised more than $6,000, one of the higher team results in Connecticut. Not bad for our first year. Second, I am very thankful that I am not a CEO of a publicly traded senior living company. It has just been a difficult past two years, and it doesn’t look like it is going to be any better next year. It is a thankless job where sometimes no matter how hard you try, you just don’t get the results you want. Third, I want to thank all of you loyal subscribers. We try to give you the best information out there, with some context... Read More »What Happened To Assisted Living Prices?
The results are in for our rolling four-quarter averages for assisted living, independent living and skilled nursing sales, and they may surprise you. Assisted living prices, on average, dropped 15% to just $177,600 per unit for the four quarters ended September 30, 2018. That follows six straight quarters with an average price above $208,000 per unit for the sector and represents the lowest level since the second quarter of 2014, when we recorded an average of $162,000 per unit. What happened to the assisted living sector, which has so far seen record levels of M&A activity? In the last 12 months, there not only have been a lower number of very high-priced deals (above $300,000 per... Read More »
CBRE Adds Another Bridge Lending Option
Bridge loans are the hottest lending product for seniors housing and care right now (we’re actually hosting a webinar on that very subject next month), and CBRE Capital Markets is expanding its presence in that market with a large new vehicle aimed at providing more flexible short-term loans to seniors housing and multifamily borrowers. The program is called MF1 Capital, LLC and was structured as a mortgage REIT focused on providing equity to multifamily (about 75% of its business) and seniors housing (the remaining 25%) owners. CBRE’s strategic partners on the vehicle include multifamily real estate investment management firms Limekiln Real Estate and Berkshire Group. What sets this... Read More »
Love Funding Lends in Lexington
Ken Charbauski of Love Funding secured a HUD refinance for a 42-unit assisted living/memory care community in Lexington, North Carolina. This community, which features both private and shared units, is part of the state’s Medicaid home- and community-based services waiver program. Its family owner, Southland Real Estate, successfully refinanced its previous floating-rate debt with the $4.8 million, 35-year loan. Read More »Recent Senior Care M&A Deals, Week Ending November 16, 2018
Check out our recent senior care M&A deals! Long-Term Care AcquirerTargetPrice Regional owner/operatorHeritage Inn Retirement Center$3.25 million Regional owner/operatorGaymont Nursing Center$7.3 million Not disclosedAutumn Wood & Wood Manor$11 million University Health Care SystemKeysville Nursing and Rehab... Read More »Schedule a demo
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