CBRE sells MorningStar trio
For over $400,000 per unit, a joint venture between MorningStar Senior Living and Arcapita, a Bahrain-based global investment manager, purchased (in two transactions) a portfolio of three newly built assisted living/memory care communities in Colorado. One of the properties, a community in Jordan with 55 AL units and 29 MC units, opened in July 2014 and was already 80% occupied at the time of the sale. It sold for approximately $34.5 million, or $411,000 per unit. While the other two properties, located in Colorado Springs, included a 48-unit MC community that opened in September 2014 and an already stabilized community with 45 AL units and 19 MC units that opened in late 2013. Combined... Read More »
Have We Finally Bottomed Out?
With senior care stocks plunging in recent weeks, it appears we may have finally bottomed out with a significant rally on January 14. I am sure many of you were watching in despair as senior care stocks have been plummeting since the beginning of the year. It was not rational, it had little to do with core value, it had little to do with current operating performance, and it really did feed on itself. And, seniors housing and care stocks get thrown in the “health care” bucket at mutual funds and other institutional investors, so if they decide to lower their holdings in health care, for whatever reason, the senior care baby gets thrown out with the healthcare bathwater. But hundreds of... Read More »
Pineview in Pocatello
A trio of assisted living communities in the Pocatello, Idaho area (in the southeastern part of the state) were refinanced with a $3.89 million HUD scattered site loan. Denver-based Pineview Capital Group arranged the financing, which featured a 35-year term and an interest rate below 4%. With two built in 2008 and one in 2006, the communities were running well, with an average occupancy above 90%, and good operating margins. Each featured 15 units and around 10,000 square feet, and while one community had a quarter of its census from Medicaid, one had just 5% and the third had no Medicaid. All are under “The Gables” brand. Read More »Mainstreet’s latest IN property
Trilogy Health Services recently announced the opening of its latest Mainstreet-built facility in Richmond, Indiana, but the facility is different than any other the developer has built in recent years. Namely, it has no assisted living. Typically, Mainstreet facilities are known for their combination 70 skilled nursing (transitional care) beds and 30 assisted living units. And in the state of Indiana, according to our records, the average cost to build one of those facilities has been approximately $165,000 per unit, or $227 per square foot. We have to assume the Richmond facility will cost about the same, but will feature just 70 beds of skilled nursing/transitional care, though with all... Read More »Senior Care Prospects Dimming With Investors
Investors are selling senior care stocks, and perhaps because occupancy is in a rut with increasing construction starts. So, what are we to make of the dismal start of the New Year? Investors have hammered away at senior care stocks, and it has been ugly. On Monday, Brookdale Senior Living, Capital Senior Living, Genesis Healthcare and Kindred Healthcare all hit new lows. Who would have thought? Is it a sector problem with investors, or are they nervous about the near-term future? Last week NIC MAP released its fourth quarter occupancy numbers, and while some analysts saw the positive side of a slight sequential increase in overall seniors housing occupancy, the reality is that it is still... Read More »
Blueprint for 2016
Making a splash so far in 2016, Blueprint Healthcare Real Estate Advisors recently announced five end-of-year closings, including two leases. First (and the largest) was the sale of a 206-unit independent/assisted living community in O’Fallon, Missouri to CNL Healthcare Properties for $54 million, or $262,100 per unit. Originally built 10 years ago with 116 IL units and 40 AL units, the seller, a joint venture between AEW and First Capitol Group, after purchasing the community in 2011 for $26 million, invested nearly $10 million to add a new 50-unit AL building and to convert 22 AL units to 24 memory care units. The MC units were fully leased by closing, but the community historically has... Read More »
Seattle sale
Capitol Seniors Housing’s second investment in the Seattle MSA was financed with the help of Aron Will of CBRE National Senior Housing, who arranged a $20.12 million non-recourse, floating rate loan with a five-year term and 36-months of interest-only, provided by a national bank. The acquired community is located in the town of Mukilteo, Washington and features 107 units of about half independent and half assisted living. It was built in phases in 2000 and 2004, and occupancy has been between 86% and 90% in 2015. On a trailing-12 month basis, the community generated about $2 million of EBITDA on approximately $4.8 million of revenues, for an operating margin of 42%. Capitol Seniors... Read More »
Reading the Holiday tea leaves
As most of you have read recently, Walker & Dunlop closed its largest loan ever (almost double the size of its $670 million financing that the company closed earlier in 2015) in the form of a $1.27 billion seven-year adjustable-rate Freddie Mac loan secured by 78 Holiday Retirement independent living properties. The financing, led by Russell Dey and Laura Beaton of W&D, comes out to approximately $144,400 per unit, which if you assume a 75% loan-to-value, is almost identical ($192,500 per unit) to the average price per unit Holiday properties have sold for in the last few years ($193,800 per unit, according to our records). Since 2013 Holiday has sold, in nine transactions, 231... Read More »A CCRC’s successful SNF
A not-for-profit CCRC in Milwaukee, Wisconsin boasting a well performing skilled nursing facility was sold by Ray Giannini of Marcus & Millichap for $19 million, or approximately $53,670 per bed/unit, with approximately a 9% cap rate. Built in stages in the early 1970s and in the mid-1980s, this CCRC features 187 units of independent living, 80 assisted living units and an 87-bed (62-unit) skilled nursing facility, half of which was recently substantially renovated in 2011, resulting in a good quality mix of about 40%. Altogether, the campus is 90% occupied and operates at a 13% margin (driven largely by the SNF) on about $13 million of revenues. Plus, the previous owner purchased a... Read More »Supportive Living sells
Looking to expand their portfolio of supportive living facilities (SLFs) in Illinois, a private owner bought four SLFs (three in the Chicago area and one in Rockford) with 539 total beds for $49 million, or $90,900 per bed, with a 9.4% cap rate. Occupancy ranged 54% at one facility to 93% at another, with the average settling at 75%. And all of the facilities were built in the mid-2000s with an average of 67,000 square feet. Operationally, they were running well (at a 31% margin on $14.7 million of revenues), but the private owner seller wanted to exit the business. Ryan Saul and Patrick Burke of Senior Living Investment Brokerage handled the transaction. Read More »Schedule a demo
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