Big Is Not Always Better, But Capital Structure Counts
Two looming hospital system mergers will create the largest health systems in the country. I assume most of you have heard about the two potential not-for-profit hospital system mergers that will create the largest systems in the country, larger than even HCA, the biggest for-profit hospital company. In one way, this bothers me because with one of them, the combined entity will have 191 hospitals, plus all the ancillary businesses. I just don’t understand how that can be run efficiently. The for-profit chains did their own large mergers, and a few of them are suffering the results and shedding hospitals to pay down debt. But there is one big difference with not-for-profit mergers, and that... Read More »
Cushman & Wakefield Sells For Capitol Seniors Housing
Three and a half years after purchasing a 97-unit assisted living/memory care community in Silicon Valley (in the town of Fremont, to be more specific), Capitol Seniors Housing is exiting the asset, making a tidy return we imagine, thanks to Rick Swartz, Jay Wagner, Aaron Rosenzweig and Alex Petrosian of Cushman & Wakefield, who represented CSH in a competitive bidding process. Since acquiring the property from Westport Capital Partners in 2014 for $23.75 million, or about $244,800 per unit, CSH and its operating partner, MBK Senior Living, worked to improve the community’s occupancy, which sat at 81% in 2014, and margin, at just 19%. CSH invested upwards of $1.0 million to improve the... Read More »
Improvements Ahead For Irma-Affected Assisted Living Community
New ownership has changes in store for a 64-unit Florida assisted living community it acquired for $3.675 million, or $57,400 per unit, with a 9.25% cap rate. Built in 1989 in Lauderhill (located just west of Fort Lauderdale), the community, which was owned by a partnership between a local owner and a local operator, totals 105 beds in 64 rooms. Historically, its occupancy has been near full (resting at 94% at the time of the sale), but that was in part driven by its below-market rents. That in turn also affected the community’s operating margin of roughly 20% on approximately $1.77 million of revenues. It didn’t help that the facility sustained about $30,000 in damage from Hurricane Irma.... Read More »
Ray’s Evansville Sale
Ray Giannini of Marcus & Millichap has sold a health care campus in Evansville, Wisconsin, the only property of its sort in town. The campus includes a 71-bed skilled nursing facility (built in 1971) that is 69% occupied with a 42% quality mix, and a 25-unit assisted living community (built in 2009) that is fully occupied with mostly private pay residents. Mr. Giannini sold the property for $5.1 million, or about $53,100 per bed/unit, with an 11.9% cap rate on annualized 2017 figures. The buyer was not disclosed. Read More »
Recent Senior Care M&A Deals, Week Ending December 8, 2017
Check out our recent senior care M&A deals! Long-Term Care AcquirerTargetPrice National Health Investors, Inc.The Country Club of Woodland Hills$34.6 million Owner/operatorMaple Heights Nursing and RehabN/A American House Senior Living CommunitiesSuperior Residences at Bluewater Bay$24.5 million Accolade Health Care2 skilled nursing... Read More »
More Publicly-Traded REIT SNF Sales
Blueprint Healthcare Real Estate Advisors announced a slew of skilled nursing transactions at the beginning of December, closing five for clients (mainly publicly traded REITs) across the country. Ben Firestone and Mike Segal represented a publicly traded REIT owner in its disposition of a 119-bed SNF in Nashville, Tennessee for $16 million, or $134,500 per bed, which according to our database is the highest-valued SNF deal in Tennessee ever, on a per-bed basis. The recently upgraded facility was previously purchased in a portfolio, but it piqued the interest of a regional operator, which emerged as the buyer. The same public REIT seller decided to wind down its relationship with a... Read More »
CBRE Finds Financing With Freddie Mac
Aron Will of CBRE worked with Freddie Mac for his two latest transactions, and crisscrossed the country to do so. First, with Andrew Behrens of CBRE Multifamily Institutional Group, Mr. Will closed a $29.8 million financing for a 144-unit senior living community in Escondido, California (San Diego MSA). Purchased in 2012 by Westmont Living, the community underwent a three-year capital improvement project that involved adding a 22-unit memory care wing. It clearly worked, as occupancy stands at 92% for the property. Westmont received a 10-year, fixed-rate loan with 60 months of interest only payments. Then, to Cincinnati, Ohio, where Mr. Will arranged acquisition financing (again through... Read More »
Greystone Arranges Tulsa Transaction
National Health Investors announced a one-off acquisition of a 200-unit independent/assisted living community in Tulsa, Oklahoma, paying $34.6 million, or $173,000 per unit. Originally built in 1987 by a local real estate developer, the community was previously owned and operated by Triad Senior Living, which manages over 1,000 senior living units across Oklahoma, Illinois and Florida. Occupancy was strong, at 95%, but moving forward, Discovery Senior Living will take over operations under a lease with NHI for a term of 15 years, with renewal options, at an initial lease rate of 7.0% plus annual fixed escalators. NHI has also set aside $500,000 for capital improvements and funded the deal... Read More »
HJ Sims Generates Significant Savings Through Bond Issue
American Baptist Homes of the Midwest successfully refunded its outstanding bonds with the help of HJ Sims, generating millions in savings in the process. Recently, across ABHM’s 13-property portfolio, the provider has funded repositioning projects at many locations, significantly lowering their cash reserves. So, HJ Sims worked to refund ABHM’s Series 2007 and Series 2009 bonds in a way that lowered the Obligated Group’s cost of capital. Sims priced a $61.785 million issue with an arbitrage yield of 4.811%. That generated a net present value savings of approximately $6.5 million, or about 11% of the par amount of the refunded bonds. And, ABHM will realize 82% of the savings within the... Read More »
Investing In The Seniors Housing Sector
There are a lot of reasons to invest in seniors housing, but now some people are making up numbers to bolster the case. I realize there is a lot of general excitement about investing in the seniors housing sector. And there should be, despite the current headwinds. The population is aging, the quality of the properties is at its highest, the choices for consumers are wider than ever before. But what really gets me is when people start exploiting the situation and simply fabricate numbers to make their investment case. Take the case of a relatively new retail investment fund investing in seniors housing development and acquisitions. In one of their promotional pieces, they stated that the... Read More »Schedule a demo
Gain access to the best healthcare and long-term care investment intelligence, data, and analysis.
