Watermark Retirement Corporation Partners with Singapore Conglomerate
Singapore conglomerate Keppel Corporation is staking a claim in the U.S. seniors housing market with its acquisition of a 50% stake in Watermark Retirement Corporation. That 50% interest plus 50% of the minority interests held by Watermark’s owners in certain communities managed by the company is valued at approximately $77.3 million. This is a big step for Keppel, which had previously not been active in the space. Watermark currently manages 52 seniors housing communities and about 9,400 total beds in 21 states, with a development pipeline of an additional eight properties scheduled to open by 2020. Watermark already had begun reaching across the Pacific with Watermark Senior Living China... Read More »
Two Michigan Transactions from IPA Seniors Housing Trio
Mark Myers, Joshua Jandris and Charlie Hilding of IPA Seniors Housing handled two Michigan transactions at the start of August. First was the sale of a four-property skilled nursing portfolio in Michigan, totaling 393 beds. The aging properties are in need of capital improvements, which was reflected in the (undisclosed) pricing. A large Michigan operator (who sourced REIT financing for the deal) purchased three of the facilities, while a local owner/operator in the Detroit area purchased the facility in Wayne. Second was the sale of a 143-bed skilled nursing facility in the town of Zeeland (Grand Rapids MSA), which involved an Illinois not-for-profit, Providence Life Services, as the... Read More »
Synergies Yield Successful Bond Financing in Georgia
The new relationship between Lancaster Pollard and its parent company (for less than a year) ORIX Corporation USA is paying off for their clients. One of them, Georgia-based Brickmont Assisted Living, took advantage of those synergies to obtain construction financing for its to-be-built assisted living/memory care community in Johns Creek, Georgia. Lancaster Pollard placed $16.7 million of tax-exempt bonds with ORIX USA, offering a drawn-down bond structure that will yield significant savings for Brickmont. After purchasing all the bonds at a fixed interest rate, ORIX USA also gave Brickmont flexible prepayment options, should the company decide to refinance early. Sounds like a good deal... Read More »
Capital Senior Living Disappoints, And Pays A Price
We have now become nervous with each earnings period because there just seem to be too many surprises. Unfortunately, these surprises have usually been negative. Three months after being positive about the direction of the company, Capital Senior Living spooked investors not only with their poor results in the second quarter, but their dismal prospects for the rest of the year. When you underperform expectations, and cut full-year forecasts by 20%, you should expect the worst. And the worst was a 23% plunge in the share price on August 1, followed by a 5% decline the following morning. Volume was 6x the average, but not heavy in absolute terms. The news also took Brookdale Senior Living... Read More »
Transaction Trifecta from Senior Living Investment Brokerage
When it rains, it pours for Senior Living Investment Brokerage, with the firm closing three transactions at the start of August. In the first one, while one assisted living operator exited the seniors housing industry, another entered in SLIB’s latest California sale. Jason Punzel, Brad Goodsell and Vince Viverito successfully sold a 30-unit assisted living community in the town of Chico (Sacramento MSA) for $4.15 million, or $138,300 per unit, with a 10.7% cap rate. Fully occupied, with a 29% operating margin, this 22-year old community was owned by a local operator that wished to exit the industry. Its new owner is a new entrant to seniors housing that is looking to expand throughout the... Read More »
Carnegie Capital Closes Two Financings
Carnegie Capital showed its strength this month, announcing two loan closings in Georgia and Ohio. First, J.D. Stettin sourced and structured $10 million in bridge loans to fund the acquisition of two skilled nursing facilities and 177 beds in Macon and Warner Robins, Georgia (Atlanta MSA). The financing, which came with an interest-only term and no prepayment penalties, featured a loan-to-cost of 80%, so we have estimated the purchase price to be around $70,600 per bed. Then, Mr. Stettin refinanced a brand-new assisted living/memory care community in Cleveland, Ohio with a $16 million loan. A local community bank provided the original $9.5 million construction loan for the community,... Read More »
Thorofare Capital Rises Again In Phoenix Area
Thorofare Capital is expanding its seniors housing bridge lending program and recently closed a $13 million loan on behalf of a 277-unit assisted/independent living community in North Phoenix, Arizona. The floating-rate loan, with a two-year term of interest only payments, provides an initial advance of $10 million to repay the construction loan and also funds reserves while the community leases up. There was also $3 million withheld for the future renovations and performance-based earn-outs. The borrower, a Southern California-based real estate investor, acquired the property out of a bank’s REO portfolio in 2015 when it was an Embassy Suites Hotel. They then converted the building in... Read More »
Should Cap Rates Go Lower?
Two major REIT CEOs can see seniors cap rates moving below multifamily for the first time. The Big Two REITs have reported their second earnings, and while occupancy and labor costs certainly remain an issue for their operating partners, there was one funny comment that came out of the calls. Well, funny if you get your kicks from these sorts of things the way I do. Apparently, Welltower CEO Tom DeRosa and Ventas CEO Debbie Cafaro see eye to eye on at least one thing. As one analyst joked, they both apparently agree that seniors housing cap rates should be lower than multifamily, and I think they were even talking about assisted living. The reason? Because demand will do nothing but grow,... Read More »
Lancaster Pollard Closes $400 Million Bridge Financing
There’s no such thing as a summer lull for Lancaster Pollard, which recently announced the closing of $400 million in bridge financing for 27 skilled nursing facilities located throughout California. The borrower was a large skilled nursing operator based in California, Plum Healthcare, that previously had a corporate term loan credit facility on the portfolio. Grant Goodman, Jason Dopoulos, Joe Munhall and Elliot Kaple led the way for Lancaster Pollard, which served as syndication agent on the transaction, while Credit Suisse served as the lender. Upon the transaction’s closing, Lancaster Pollard immediately began work on refinancing through HUD. Meanwhile, Rob McAdams of Lancaster... Read More »
New Skilled Nursing Construction in Florida
Most of the attention in the Florida development market has gone to assisted living and memory care. Rightfully so. But a brand-new skilled nursing facility is going up in Lakeland, Florida, courtesy of Greystone Healthcare Management and Lake Gibson Village. The 120-bed facility will be located within the existing Lake Gibson Village independent living/assisted living community and will feature a mix of private and semi-private rooms, along with programs that range from orthopedic and cardiac to stroke rehabilitation. Lake Gibson Village is also undergoing a 64-bed memory care expansion on the 45-acre site in addition to massively expanding its independent living services. At a cost of... Read More »Schedule a demo
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