HFF closes high value deal in Northeast
Holliday Fenoglio Fowler, L.P. (HFF) closed one of the most expensive seniors housing transactions ever (on a per-unit basis), with its sale of two assisted living/memory care communities in the Northeast for $98.25 million, or almost $575,000 per unit. There were several factors that led to this near-record price. First was the location. One of the properties is located in suburban Philadelphia and the other is in New Jersey within the New York City MSA, both high barrier-to-entry, high-income markets. Second, they were recently built in 2013 by the owners, a joint venture between Formation Development Group (an affiliate of Formation Capital) and Shelbourne Healthcare Development Group... Read More »
Ensign’s quiet 2016
The Ensign Group (NASDAQ: ENSG) has cooled off significantly in 2016, following its 23 transactions in 2015. The company has only closed three deals so far this year, including its purchase of the Legend Healthcare properties (with eight skilled nursing facilities in Texas) and a small hospice operation in Iowa. Most recently, Ensign acquired a 171-bed skilled nursing facility in Kansas City, Kansas, which included the operations and the underlying real estate, for an undisclosed price. The facility includes a 10-bed assisted living unit, and was 56% occupied under the ownership of a faith-based not-for-profit. Ensign’s subsidiary, Endura Healthcare, Inc., will take over... Read More »Blue Moon pays up out West
We discuss in the July issue of The SeniorCare Investor the lack of high-valued transactions in June (and for the rest of the year), but one notable exception was Blue Moon Capital Partners’ acquisition of two assisted living communities in high barrier-to-entry markets in California. Belmont Village Senior Living developed the two assisted living/memory care properties in Thousand Oaks, California and Scottsdale, Arizona. Built in 2011 and 2012, respectively, the communities were close to full occupancy by the time of the sale. Blue Moon Capital Partners, which matches institutional capital investors with seniors housing operators, was the buyer, with Belmont Village owning a minority... Read More »Develop in Dover
LCB Senior Living is breaking ground on its 12th development next month in Dover, New Hampshire, with the help of a couple of partners. Cushman & Wakefield Senior Housing Capital Markets arranged a $15.1 million non-recourse construction loan to fund the development of the 76-unit senior living community. Sitting of 19.4 acres in a mixed-use development, which includes a new hotel, a medical office building, a bank and coffee shop, the building will feature independent living, assisted living and memory care services. Berkshire Bank provided the loan to LCB and its joint venture partner, Blue Moon Capital Partners. Read More »
Seniors Housing and Record Low Interest Rates
The 10-year Treasury note rate hit a record low, but is that good news or bad? In case you haven’t noticed, the 10-year Treasury note rate, which is used for pricing many debt instruments, has fallen to a record low. Anything between 1.50% and 2.00% was considered to be Nirvana for seniors housing borrowers. But the 10-year rate has now dropped below that range, and has been flirting with 1.35%. Remember talk about rising interest rates? Yes, at some time it will happen, but that time seems to be getting pushed out into the more distant future with each piece of bad news. So for seniors housing borrowers this may appear to be good news. Except once you get beyond the euphoria of your... Read More »Siefert’s smooth sale
Toby Siefert of Senior Living Investment Brokerage arranged the sale of an 87-bed skilled nursing facility in Philadelphia, Pennsylvania on behalf of a family owner wanting to exit the market. Despite its age (built in 1980), high Medicaid census (traditionally 80%) and lack of private units (there was just one combined with 27 semi-private units and eight four-bed units), the facility sold for $10 million, or nearly $115,000 per bed, which is well above the national average of $85,900 per bed. Helping its case was the facility’s 14.5% operating margin on about $8.9 million of revenues, as well as a 95% occupancy rate. Mr. Siefert procured 12 offers for the facility, eventually bringing in... Read More »Legacy in Montgomery
Already the second deal closed in the Montgomery, Alabama area in recent weeks (following Birchwood Health Care Properties’ purchase of a 64-unit memory care community for $4.75 million), Legacy Senior Living spent $3.3 million, or $113,793 per unit, to acquire a 29-unit memory care community in Prattville. Built in 1999 with an addition in 2005, the property was 94% occupied and operated at a 23% margin on approximately $1.3 million of revenues. Plus, with limited competition in the area and a consistently high census, there is an expansion opportunity. Mike Pardoll of Marcus & Millichap represented the seller, a group of private investors, in the transaction. Read More »2014, the top-heavy year
As 2015 passed by and 2016 hits the half-way point, we are further reminded of just how extreme a year 2014 was, in terms of seniors housing pricing. This was yet again on display when looking at the price-per-unit spread between stabilized and non-stabilized assisted living properties from 2014 to 2015, according the 21st Edition of The Senior Care Acquisition Report. Stabilized assisted living properties in 2014 sold on average for $230,300 per unit, while non-stabilized properties sold for an average of $139,000 per unit, for a spread of $91,300. However, this spread greatly diminished in 2015 to just $61,500, with stabilized properties averaging $200,600 per unit and non-stabilized... Read More »Senior Star’s Five Star move
The Thomas Twins of Senior Star certainly had the right idea. Remember, they proposed buying all the owned properties of Five Star Senior Living for about $325 million, which we always assumed was an opening offer. Five Star has now agreed to sell just seven of its assisted living communities with 545 units to its REIT big brother, Senior Housing Properties Trust, in a sale/leaseback transaction. The price of $112.4 million comes to $206,200 per unit, and using that value (which we believe is high for the entire owned portfolio) on the remaining 26 owned properties with 2,666 units results in an additional $549 million in value. Five Star’s market cap, even after the nearly 40% jump in its... Read More »
A class of its own
A former school building in Liberty, Missouri, that converted to residential care-II (effectively low-acuity assisted living) sold to a growing skilled nursing operator and large mental health operator in the Midwest, with the help of Patrick Byrne of Senior Living Investment Brokerage. The building was originally built in 1962, and after it was licensed for RCF-II, it also provided mental health services for a younger population. Amenities like a basketball court and plenty of common space better equipped it to care for younger residents, and as many mental health facilities in the state closed, its census steadily increased. While the building features 206 beds, its functional capacity... Read More »Schedule a demo
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