40-Year Old SNFs: Obsolete or an Opportunity?
The aging of the skilled nursing industry is becoming a growing concern for investors in that space. Facilities built 40 years ago and over comprise a significant portion of the skilled nursing beds in the country, and many believe they are outdated and would require too much capex to modernize and attract the Medicare and private pay populations. Nevertheless, plenty of buyers still see opportunity. But what do they see that others don’t? That is the question we tried to answer in our webinar entitled, “The 40-Year Old SNF: Part II,” a sequel to our 2016 discussion. Our Editor, Steve Monroe, was the moderator, joined by Alan Plush of HealthTrust, Chad Buchanan of Tryko Partners and Andrew... Read More »
MBK Buys West Coast Senior Living Portfolio
Mitsui & Co.’s U.S.-based wholly owned subsidiary, MBK Real Estate, added nine senior living communities to its portfolio, at a price of $382 million, or about $318,000 per unit. Located in California, Washington and Arizona and totaling around 1,200 units, the communities were previously operated by West Living LLC. MBK plans to renovate them and take advantage of their proximity to its other owned/managed properties to maintain operations. The properties are projected to bring in approximately $21 million of NOI in the first year, for a 6.6% cap rate before any impact of the renovations. Read More »
Clearwater Living Makes First Purchase
A Southern California independent living community that recently changed hands is in for a smooth transition, as its in-place operator stepped in as its buyer. Located in Oxnard (about 75 miles up the coast from Los Angeles), the 136-unit community was originally developed in 2017 by The Wolff Company and operated by Clearwater Living, a regional operator of nine other communities in the West. As part of the development agreement, Clearwater was expected to take over ownership of the property, which will be the first that it owns outright. The community just opened earlier in 2018 and is currently filling up, but its location should help that fill some units, as it is adjacent to a... Read More »
Bank Leumi Finances In Florida
Bank Leumi provided a couple of Florida financings for owners of assisted living communities. First was a five-year $9.3 million acquisition loan provided to a South Florida-based owner/operator, Priority Life Care, to purchase two senior living properties in western Broward County. The Margate community features 111 licensed beds along with memory care services, while the Davie community is smaller, with just 20 beds. They join Priority’s existing portfolio of seven properties in Florida and 11 properties in seven other states. Bank Leumi also provided a $4.8 million, three-year term loan to refinance a 75-bed assisted living community in Orlando, Florida. The borrower, a Florida-based... Read More »
HCR ManorCare Deal The Future Or A Risk?
Hospitals and post-acute providers have not mixed well in the past, but ProMedica Health System hopes that changes. I keep thinking about the Welltower and ProMedica Health System acquisition of Quality Care Properties and HCR ManorCare. Given today’s valuations, ProMedica may have gotten a bit of a deal with ManorCare’s home health and hospice business. But we are still not convinced that a basically two-state hospital system will benefit from owning skilled nursing and assisted living all over the country. Will the tail wag the dog? Yes, there are a lot of unusual alliances going on in healthcare services today, with pharmacies buying insurers, and insurers buying anything they can get... Read More »
Large Skilled Nursing Portfolio Sells In Midwest
A publicly traded REIT decided to exit a number of secondary and tertiary markets in Illinois and Missouri, hiring Ben Firestone and Michael Segal of Blueprint Healthcare Real Estate Advisors to get the job done. The portfolio featured 1,581 total licensed beds in 14 skilled nursing facilities, with 12 located in central and southern Illinois and two in Missouri. Several of the facilities were recently renovated to offer high-acuity, short-term rehabilitation care, and now currently feature a high number of private rooms. Each facility in the portfolio is also strategically located near primary referral sources. However, the REIT owner wanted to lessen its exposure in these markets and end... Read More »
HHC Finance’s Capital Advisory Group Hits $1 Billion
Housing and Healthcare Finance’s (HHC Finance) Capital Advisory Group just crossed the $1 billion mark in loans closed since its inception a little over two years ago. Pushing the group over the edge were a couple of bridge loans arranged by Isaac Haas and Neil Gamss. The pair first structured a $12.2 million loan for two assisted living communities in Michigan, and then arranged a $6.0 million loan for a skilled nursing facility in Kentucky. The financings came with relatively low leverages and were arranged on behalf of a couple of experienced borrowers. Read More »
KeyBank Closes Largest Single-Asset HUD Loan
In the largest single-asset HUD closing in history, KeyBank Real Estate Capital secured $127 million in financing for a large 499-bed skilled nursing facility in New York City. Originally built in 1966, with renovations in the mid-1990s and early 2000s, the facility was operating at full occupancy. Its owner, a regional owner/operator, used the loan’s proceeds to pay off an interim acquisition bridge loan provided by KeyBank and a syndicate of lenders. The HUD financing also helps fund over $7 million in capital expenditure improvements made to the property. KeyBank’s John Randolph, Henry Alonso and Brandon Taseff led the way on the transaction. Read More »
Strawberry Fields Grows In Kentucky
Kentucky’s largest not-for-profit senior living and long-term care provider, Christian Care Communities, worked with Ben Firestone and Michael Segal of Blueprint Healthcare Real Estate Advisors to sell its 92-bed skilled nursing facility in Louisville. Ideally located near multiple hospitals and other referral sources, the facility was originally built in 1962, but was recently renovated in both 2012 and 2014. Occupancy was around 81%, but trailing cash flows were negative, prompting Blueprint to position the asset as a value-add opportunity. For a purchase price of $6.5 million, the facility ultimately sold to Strawberry Fields REIT, which leased it to Landmark Group to operate. The deal... Read More »
Seniors Housing Cap Rate Spread Narrows
One would expect that in bull markets, the seniors housing (independent and assisted living) cap rate would fall, while the 10-year treasury rate would rise, making the spread between the two smaller, and vice versa for bear markets. But we have been in an historically low interest rate period throughout most of 2017, while at the same time in the midst of a continued bull market for seniors housing, highlighted by record-high prices and record-low cap rates. Per the 23rd Edition of The Senior Care Acquisition Report. The spread between the cap rate and 10-year Treasury Rate fell from 640 basis points in 2016 to 520 basis points in 2017, tied for the lowest seen in the last decade. That... Read More »Schedule a demo
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