2015 Closes With a Surge in M and A transactions
With 38 deals and counting in December, the fourth quarter set a record with 104 announced seniors housing and care acquisitions. Not even the recent deep freeze that has hit the northeast could slow down the deal making at the end of the year and into 2016. And what a year it was. On the last two days of December alone, we recorded 11 closed transactions with a total value in excess of $300 million, and more keep showing up in our in boxes. That put December’s totals at 38 acquisitions in the seniors housing and care space, and a record-busting 104 transactions in the fourth quarter alone. Perhaps that is why so many people are predicting a slower 2016. But not so fast. New deals have... Read More »SLIB’s strong 2015
Senior Living Investment Brokerage ended an already strong 2015 with eight more announced transactions, totaling over $47 million. All told, there were four skilled nursing sales, with a total of 420 beds in those transactions, located across the country in Chicago, Illinois, rural Vermont, north-central Texas and Sioux City, Iowa. Matthew Alley and Toby Siefert handled two of those sales, while Ryan Saul handled the other two, with an assist from Jeff Binder in Iowa. On the seniors housing side, the firm closed four other transactions, with a total of approximately 500 units. Matthew Alley, Toby Siefert, Brad Clousing, Patrick Burke and Ryan Saul were each involved in at least one of the... Read More »HUD’s record SNF deal
HUD saw its largest single-asset, skilled nursing facility loan ever, when Housing & Healthcare Finance (HHC Finance) closed an $80.7 million 232/223(f) loan to refinance the existing conventional bank debt at a 520-bed skilled nursing facility in Manhattan, New York. Built in 1927 with 16 floors, but converted to skilled nursing in 1985, the Upper West Side facility was purchased three years ago by a member of the CareRite Centers network of communities for $80 million, or $153,800 per bed, with a 13% cap rate. With a loan of such size, HHC Finance had to get approval from multiple levels at HUD including the Office of Risk Management and all the way up to The Deputy Secretary of HUD.... Read More »
American Realty Capital still in the big leagues
We wrote a few months ago that American Realty Capital Healthcare Trust appeared to be going strategic in their deal making, meaning they were purchasing smaller one-off communities rather than the larger portfolio sales they were known for. In fact, in all of their deals before 2015 (going back to their first transaction in 2012), ARC averaged $52 million per transaction, but in the first 10 months of 2015, they averaged $13 million each. That is not to say the quality of the deals changed (they didn’t), just the size. However, ARC finished 2015 by announcing three transactions averaging $67.7 million per deal. First, ARC-II purchased a portfolio of three assisted living/memory care... Read More »Five Star Says No Deal
As expected, Five Star Quality Care has rejected the offer by an affiliate of Senior Star to purchase the 33 owned senior living communities for $325 million. Basically, the board said the assets are not for sale, and that the company could improve the value of the shares by improving earnings. Unfortunately, just improving earnings does not result in a higher stock value in this market. Just ask management at Capital Senior Living. So if someone will offer more for the owned real estate than what the entire company is worth, based on its current stock price, what would someone pay for the owned real estate and the operating company? That may be a question that Bill and Bob Thomas may try... Read More »Finish with a bang
Shep Roylance of The JCH Group is sprinting to the finish line in 2015, announcing four closings with a fifth on its way. First, earlier this month, Mr. Roylance closed the sale of a 175-bed skilled nursing facility in Sylmar, California for $14.4 million, or $82,300 per bed, with a 12.9% cap rate. The property was originally bought by the seller, LifeHOUSE Healthcare Services, when it had 141 beds in 2007 for $9.3 million, or $66,000 per bed. The current buyer, Independence Healthcare Management, also purchased an additional three acres planned for future assisted living and memory care development. Next up, Mr. Roylance arranged a sale/leaseback of a 59-bed SNF in Fresno, California for... Read More »Will power
A pair of well-located, well-occupied and relatively new assisted living/memory care communities in Suffolk County, New York recently received $62.8 million in financing arranged by Aron Will of CBRE National Senior Housing. The loan, which featured a five-year fixed rate and 60 months of interest only, was placed through a life insurance company and came out to approximately $230,800 per unit. Both communities, owned by a joint venture between Harrison Street Real Estate Capital and The Engel Burman Group, had occupancy rates in the high 90s and are located in affluent towns in the New York City metro area. The 118-unit AL community in Huntington was developed by Engel Burman in 2010,... Read More »Seniors Housing Companies on the Defensive
Oh, what an end of the year. With just three publicly traded seniors housing companies, all three are under some sort of pressure to do something to increase shareholder value. First it was Brookdale Senior Living, then Capital Senior Living and now Five Star Quality Care. The owners of Senior Star have made an unsolicited offer to buy Five Star’s 33 owned communities with more than 3,100 units, with assisted living and memory care representing just over 75% of the total units and independent living the remainder. At a price of $325 million, or just over $100,000 per unit, the value to shareholders comes to more than $5.00 per share net of some mortgage debt. Five Star currently trades... Read More »Alley at work
Matthew Alley of Senior Living Investment Brokerage recently closed two transactions, both featuring potential turnaround opportunities. First, Mr. Alley handled the sale of a 62-bed skilled nursing facility in Poteet, Texas for $850,000, or $13,700 per bed. Built in 1964, the facility was just 48% occupied, and only 49 of its total beds were dually certified. On top of that, it operated at a 0.99% margin on $1.38 million of revenues. So there is room for improvement for the buyer, a private Texas-based owner/operator looking to expand in South Texas (this asset is located over 35 miles from the San Antonio area). Next, together with Toby Siefert, Mr. Alley facilitated the sale of two... Read More »Reposition then refinance
After purchasing an 84-bed/49-unit memory care community in Phoenix, Arizona in 2013, the new ownership invested significant capital to reposition the community and make it more competitive. It also helped that an experienced local operator was in the ownership group and could capture significant market share by improving both quality of care and the physical plant. The community is built in the cottage style, with seven single story buildings each with dining rooms and common areas. The concept is designed to help promote socialization and create a more “home-like” environment. Now, ownership was looking to refinance its existing debt while simultaneously funding capital improvements and... Read More »Schedule a demo
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