What’s new with Watercrest
Watercrest Senior Living Group is unveiling its new concept in memory care, called Market Street Memory Care Residences, at a site currently under construction in Viera, Florida. The 47,000-square foot, 60-unit community is set to open in the fall of 2016, with two more 64-unit communities under the same concept opening in 2017 in Palm Coast and Tampa. The buildings are estimated to cost between $16 million and $17 million, or approximately $266,000 per unit, to develop. Financing has already been arranged for the Viera and Tampa properties, with EB-5 equity and commercial bank construction loans (Bank of Texas is providing the Viera one). As for Watercrest’s other projects, things are... Read More »
Big news from Brookdale
The “big” news in the seniors housing market was the announcement at the end of July that Brookdale Senior Living (NYSE: BKD) had entered into an agreement to sell 44 properties with 1,874 assisted living and 579 memory care units located in 12 states. The price is about $252.4 million, which comes to $102,900 per unit. Brookdale had previously announced plans to sell between 50 and 100 properties, and with this deal they are well on their way to accomplishing this goal. Since they would not be selling their best performing assets, it makes sense that the pricing would be well below the 2015 average price of $189,200 per unit, but it was also well below the lower quartile price of $141,000... Read More »Capital Funding’s closings
Capital Funding Group closed a couple of transactions recently for SNFs up and down the East Coast. Starting in New York, the lender provided a $19.1 million bridge-to-HUD loan for a borrower to acquire a 167-bed skilled nursing facility. The loan covered over 90% of the $20.87 million, or $125,000 per bed, purchase price. Craig Casagrande originated the transaction, which was funded through a combination of senior and mezzanine debt and included a turnaround component based on projected improvements to the facility’s performance. Plus, Chip Woelper originated a $3 million working capital loan for the borrower to finance operations. In a separate transaction, Capital Funding served as sole... Read More »King Cash
When it comes to value, it all comes down to cash flow. For the fourth year in a row, according to the 21st Edition of The Senior Care Acquisition Report, there has been a record level of net operating income per bed purchased in the skilled nursing market. This has been the primary driver of the steady rise in the average price per bed since 2011. At the last market peak in 2007, the average NOI per bed sold was $6,700 and the average price per bed was $55,200. From 2007 until 2015, the average NOI grew to $9,600 per bed, for an increase of 43%, while the average price per bed increased to $85,900, representing a 55% increase. Most nursing facilities have been trying to increase their... Read More »
Five Star and Senior Star… Again
Oh boy, here we go again. Bill and Bob Thomas have sent another letter to shareholders of Five Star Quality Care, of which they own about 3.4 million shares, or 6.8% of the company. As shareholders, they are glad that management realized that they had some valuable assets, the full value of which is not reflected in the share value. It rarely is. But, as we pointed out a few months ago when Five Star sold a few assets for a big price, and a big gain, with seven properties worth more than the market cap of the entire company, they are also subjecting themselves to a big lease payment liability, which will cut into cash flow. As shareholders, this is not making the Thomas brothers happy.... Read More »
Getting Ready For More Acquisitions
The Ensign Group has nearly doubled its bank line of credit to $450 million. The new facility will include a $300 million revolving line of credit as well as a $150 million term loan. In addition, there is a $150 million expansion option. It looks like the company is lining up the dry powder for some more acquisitions. Robinson Humphrey and Wells Fargo Securities arranged the financing. Read More »
Minnesota SNF/ALF
In another sale involving skilled nursing beds and assisted living, Ray Giannini of Marcus & Millichap sold a nursing facility in Duluth, Minnesota for $10.0 million, or about $53,000 per bed. Occupancy was solid and there were more than 180 total beds involved in the sale. Read More »
California SNF/ALF Sells
Krone Weidler of Weidler Integrated Healthcare Investment Properties, in affiliation with Marcus & Millichap, sold a skilled nursing and assisted living facility in California to a local private equity investor. Built in 1991, the property has 120 skilled nursing beds and 85 assisted living beds with occupancy that has been around 94%. The sales price was $15.6 million, or $76,100 per bed, and the buyer may have to turn the operations around a bit. Read More »
Opportunity Comes Knocking
Ken Carriero and Damien Carriero of Colliers International’s National Seniors Housing Group recently sold an 88-unit assisted living community in Florida for $4.25 million, or $48,300 per unit. The community was built in 1987 and is licensed for 135 beds. In the past, occupancy had been stabilized at just under 90%, but had declined to 46% as a result of the seller’s illness. The cap rate came in at 7.7%, and we are sure that the buyer, New York-based Center Management Group, will be able to ramp up occupancy again. Read More »Better in the long-run
Private equity group Valstone Partners is not looking back with the sale of its 42-unit assisted living/memory care community in Newport, Tennessee, barely a half year after acquiring the community as part of a portfolio transaction in December 2015. Built in 2000, the Brookdale Senior Living-operated community features 32 assisted living and 10 memory care units. It was operating decently with a 20% margin on approximately $1.62 million of revenues, with a 95% occupancy. But, the community’s size and location (rural eastern Tennessee) did not align with Valstone’s long-term strategy, prompting the sale. Mainstay Financial Group, a growing regional owner/operator, paid $3.9 million, or... Read More »Schedule a demo
Gain access to the best healthcare and long-term care investment intelligence, data, and analysis.
