Sunwest still in the news
Continuing the Sunwest saga, Omega Communities purchased a 104-unit assisted living community in Hoover, Alabama that was a Sunwest property from 2006 to 2010. When the company filed for bankruptcy protection, the lender foreclosed and then sold it to an individual investor, who issued bonds to finance the acquisition. AdCare Health Systems guaranteed the bonds, and $6.1 million were still outstanding. Recently, the community hit another speed bump, when in 2014, the state required the owner to hire a new management company, which discharged more than 30 residents. Average rents were about $2,400, but occupancy was below 50%, resulting in negative cash flow. Assuming 85% occupancy, pro... Read More »Bank Leumi finances CCRC sale
When a 234-unit CCRC in St. Charles, Missouri managed by Innovative Management Associates, a Chicago-based seniors housing owner/operator, was acquired for $17 million, or $72,650 per unit, the buyer enlisted the help of Bank Leumi to finance the transaction. Built in 1977, with expansions in 2011 and 2013, the community features 138 independent living units, 32 memory care units, 27 assisted living units (recently converted from IL) and 66 skilled nursing beds. Overall occupancy was around 76%, but that was brought down by the struggling IL component, which was just 51% occupied. So, the buyer will have their hands full with this community, but by increasing IL occupancy to 80%, annual... Read More »High-priced transaction in Minnesota
A non-traded REIT recently bought a 105-unit senior living community in Maplewood, Minnesota for $30 million, or $285,700 per unit, with a 6.3% cap rate. Located in the Twin Cities area, the community features 22 independent living units, 51 assisted living units and 32 memory care units. It is relatively new (built in 2011 by developers experienced in seniors housing) and operates at a 37% margin on $5.15 million of revenues, based on the estimated 2015 budget. Not only that, the community has improved dramatically since the beginning of 2014, raising occupancy from around 69% to 92% by earlier this year, and EBITDA from just under $200,000 in 2014 to $1.9 million in the estimated 2015... Read More »Record Senior Care M&A Year
With one month to go, and a busy one at that, we have surpassed 300 announced mergers and acquisitions, setting a new record. We have just passed last year’s total number of publicly announced seniors housing and care acquisitions, breaking through the 300-deal mark as of November 30, with one month left to go. I am beginning to wonder whether the binding of our annual Senior Care Acquisition Report will be strong enough to contain what is sure to be more than 300 pages of charts and deals covering 2015. So, are we at a market peak or not? Certainly not in terms of investor interest in buying properties across the seniors housing and care spectrum. But pricing most definitely has hit its... Read More »Drever gets its pipeline off the ground
We wrote earlier this year of Drever Capital Management’s seniors housing ambitions in both the acquisition and development markets. The company, which has only recently shifted its focus from multifamily to seniors housing, had already made its first acquisition in 2012, purchasing a 124-unit independent living community in Lexington, South Carolina with just 50% occupancy. That deal happened to be a perfect example of Drever’s acquisition strategy of purchasing struggling communities, injecting some capital improvements ($3.7 million in this case) and hiring an operator (Renaissance Senior Communities) to improve census (it is up to 90% now) and maximize revenues. Since then, Drever has... Read More »Converted convent sells in Wisconsin
Meridian Senior Services recently purchased a 50-unit assisted living community in Racine, Wisconsin (between Milwaukee and Chicago) for $6.5 million, or 130,000 per unit, with a 12.3% cap rate. The community has quite a history. The main building was built in 1924 originally as a convent, but was completely gutted in 2008 to provide assisted living. Currently, the 64,000-square foot building sits on 4.07 acres. The seller, which bought the property in 2007 and spent approximately $2 million for the conversion, is a local operator. Despite the renovation, the older structure of the building means the rooms are on the small side and there is not much common area, hence the higher cap rate.... Read More »Ziegler’s $1 billion relationship
Senior Quality Lifestyles Corporation (SQLC), a Texas-based nonprofit that operates six senior living communities, hired Ziegler for the fourth time in 2015 to refinance one of its properties, which is located in the Barton Creek neighborhood of Austin, Texas and consists of 157 independent living units, 10 IL villas, 40 assisted living units, 23 memory care units and 42 skilled nursing beds. In order to refund $37.7 million in outstanding Series 2005 Bonds and finance renovations on the property, including a restoration project, SQLC turned to Ziegler to close a $50.69 million tax-exempt bond issue. The financing also helped fund a debt service reserve fund, pay the cost of issuance and... Read More »Fraud And Senior Care
Despite some high-profile allegations against senior executives for some type of financial wrong-doing, we are still thankful for all the good work done by the nation’s caregivers. What is it about caring for the elderly and financial fraud or other misdeeds? About once a week I read about a home health agency being charged with Medicare fraud. And then there is Medicaid fraud we hear about all too often with nursing facility owners, doctors and other providers. In our senior care industry, the founder of Sunwest Management, Jon Harder, was sentenced last week to 15 years in federal prison. Also last week, the SEC charged Chris Brogdon, the CEO of Global Healthcare REIT, with... Read More »Four Green Bay-area properties sold
Jacob Gehl of Blueprint Healthcare Real Estate Advisors led the sale of a portfolio of four assisted living/memory care communities in Wisconsin for $18.35 million, or $146,800 per unit, with an 8.7% cap rate. Included in the portfolio were three properties in Green Bay, including a 20-unit stand-alone memory care community, and one in Appleton. Combined occupancy stood at 92% at the time of the sale, and the portfolio generated approximately $1.6 million in trailing EBITDAR on an annualized basis. Senior Housing and Healthcare Capital was the seller, while Summit Healthcare REIT was the buyer, which will lease the properties for a 12-year term to an affiliate of Compass Senior Living, an... Read More »Wolff eyes seniors housing
Another major multifamily developer is getting into the seniors housing industry. In the past year, we have seen a number of either private equity groups or real estate developers, all with experience in the multifamily market but not so much in seniors housing, dip their toes (some more like cannonballed) into seniors housing development, including Drever Capital Management, Alliance Residential and Validus Group. Now, Scottsdale, Arizona-based The Wolff Company announced its plans to develop six independent/assisted living communities with 858 units throughout the Western United States. To build up its seniors housing team, in March 2014 Wolff brought on Mike Milhaupt, who has over 20... Read More »Schedule a demo
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