Ho, Ho, Ho…The CEO
A Christmas salute to senior care’s CEOs. ‘Twas the night before Christmas, when all through the industry No one was buying, not even Ed Kenny The listings were posted by the brokers with care In hopes that Jack Callison soon would be there The investors were nestled all snug in their beds While visions of Bill and Bob Thomas danced in their heads And Barry in his Kerchief, and Bruce in his cap Had just settled down after giving them one last slap When out on the lawn arose such a clatter Paul Ormond sprang from his bed to see what was the matter Away to the window he flew in a flash To see his portfolio turn into ash The moon on the breast of the... Read More »Sugar Hill Sale Saga
What do you do with a nine-story, 169,410-square foot distressed senior care home? You sell it for about $500 per square foot to a real estate investment firm with plans to convert the building to luxury apartments, of course. That was the case for Haysha Deitsch, who purchased a Brooklyn building in 2006 for $40 million and just closed this Fall on an $84 million sale to New York City-based Sugar Hill Capital Partners. However, things were not all smooth in Mr. Deitsch’s 10-year ownership, especially since 2014 when he and Sugar Hill initially agreed on the sale. Following that agreement and a 90-day notice to residents to vacate, tenants’ families sued Deitsch for allegedly trying to... Read More »Riverside Refinance
Three years after buying a 207-unit independent living community in Riverside, California, Capitol Seniors Housing (CSH) is refinancing it, at a much higher value. The private investment firm bought Olive Grove (now Welbrook Arlington) in August 2013 for $16.25 million, or $76,651 per unit. Back then, the property consisted of two independent living buildings that were built in 1980 and 1984. Occupancy was only in the high-60% range, with average IL monthly rates of about $1,600. CSH clearly saw potential in the property, and invested between $5.5 and $6.0 million to convert one building to assisted living and memory care and add a separate dining room to that building (to be serviced by... Read More »Greystone gets it done
We’ve written plenty on the memory care (and assisted living) development boom going on in Texas, especially in the markets of Houston, Dallas-Fort Worth and San Antonio. And we have wondered how, if everyone and their neighbor is building memory care in those areas, the communities would fill up. That will be the challenge for a private investor who just bought four recently-built stand-alone memory care communities previously owned and operated by U.S. Memory Care. Located in Cedar Park (Austin MSA), Houston, Plano (Dallas MSA) and Colleyville (also Dallas), these communities were built between 2013 and 2015 with 70 units and 75 beds. U.S. Memory Care also included a beauty/barber shop,... Read More »Quality Care Properties Cuts Rent
Within weeks of being spun out of HCP, Inc. (NYSE: HCP), Quality Care Properties (NYSE: QCP) announced that it had agreed to a two-month temporary rent reduction for its major client, HCR ManorCare. December’s rent was reduced by $15.0 million, or nearly 40% below what it should have been, and January 2017’s rent will be reduced by $10.0 million, or 25% below what it should have been. Quality Care Properties agreed to these reductions in response to a request from HCR ManorCare because of the “continuing financial deterioration” at the company. QCP believes this partial and temporary relief with give it time to “perform due diligence and gather information about the Lessee in advance of a... Read More »
Mobile Works
Brooks Minford, Rob Reis and Douglas Danny (with an assist from Eddie Greenhalgh) of Marcus & Millichap recently represented the owner of a 132-unit senior living community in its sale to a Jacksonville, Florida-based buyer. Located on 27 acres in Mobile, Alabama, complete with walking trails, this community was built in 1998 with 84 independent living units (including 22 single-family homes), 32 assisted living units and 16 memory care units. The community sold for $9.65 million, or $73,106 per unit/bed, which is low for seniors housing. For more information, check out the January issue of The SeniorCare Investor. Read More »
Luxury in Fort Lauderdale
Luxury has come to Fort Lauderdale. A joint venture between Capital Health Group and AEW Capital Management just opened its 106-unit senior living community directly on the Intracoastal Waterway, part of a much larger development pipeline planned across 12 states. With eight stories of assisted living (86) and memory care (20) units, this community boasts a number of attractive amenities. It takes advantage of its waterfront views with an eighth-story lounge (complete with grand piano) and restaurant. Plus, there is a spa/salon, fitness center, movie theater and a waterside café. Compass Pointe Healthcare System, an affiliate of Capital Health Group, will operate the community. All roads... Read More »
Investors, and Congress, Ignore MedPAC
Since November’s crash, skilled nursing prices continue to rise. We sometimes wonder if the members of the Medicare Payment Advisory Commission, or MedPAC, ever get frustrated that their recommendations often go unheeded by Congress. This is certainly the case with recommendations for skilled nursing Medicare reimbursement. Last week, MedPAC recommended a Medicare rate freeze for SNFs through 2019, which Congress will surely ignore….again. Because Medicaid policy is not part of its charter, the MedPAC commissioners ignore it, even though they are keenly aware that in SNFs, Medicare payments subsidize low Medicaid payments. Medicare payment increases are usually quite small, but that... Read More »High price for the Upper West Side
Seniors housing deals valued above $500,000 per unit are rare. In fact, in our M&A database dating back to 1993, only nine have been announced in the U.S. (all since 2015). And up until this month, we only had one domestic deal above $600,000 per unit, which was Health Care REIT’s acquisition of three senior living communities in the Boston area for $150 million, or $652,174 unit. Now, a single 239-unit independent living building in New York City’s Upper West Side is selling for approximately $150 million, and surpassing $625,000 per unit. The Esplanade had been owned by the Scharf family, an owner/operator of senior living communities in the New York City MSA, since they bought it... Read More »When it works, it works
Success really can breed success. At least, that is the case for a skilled nursing facility in Lubbock, Texas that has already expanded once, and will soon grow again. Built in 2011 with 78 beds, all in private rooms, this skilled nursing facility added another 30 private beds and expanded its therapy gym by 1,300 square feet in 2013, at a cost of $2.6 million. Now, with occupancy averaging 89% from January 2015 to mid-year 2016, the local family owner/operator has decided to invest again in improvements and an expansion. They turned to Kevin Giusti and Michael Vaughn of Walker & Dunlop to arrange a $15.5 million refinance, which will provide the cash necessary to continue to grow... Read More »Schedule a demo
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