Evans Senior Investments Handles Texas Transaction
Evans Senior Investments closed yet another Texas transaction this year, a month after closing a three-property, 221-unit assisted living portfolio sale there for $45 million. The firm represented an institutional group based on the East Coast in its divestment of a 77-unit assisted living/memory care community in the town of Missouri City (Houston MSA). The purchase price came to $14.35 million, or $186,000 per unit, which is below average for the sector, especially for a new community (it was built in 2010). However, this is where the issue of overdevelopment may be having its effect. Since opening, the community has averaged just 79% occupancy, albeit with a 100% private pay census. The... Read More »Paying Up For Square Footage In Skilled Nursing
The size of a skilled nursing facility can have important ramifications for the services they provide, especially as many facilities are engaging in higher acuity services and more frail patients. Four-bed wards and even triples became a thing of the past (mostly) more than 10 to 15 years ago. You need a lot more room to provide quality therapy programs, and with increasing demand for private rooms, or at a minimum large semi-private rooms, small facilities on a square foot per bed basis have become less desirable in the market, both for buyers as well as consumers. Most nursing facilities built today have at least 400 square feet per bed, and often much more. But in the past, many had 250... Read More »
Focus Healthcare Partners Closes New Dedicated Fund
Just eight years ago, Curt Schaller and Paul Froning formed Focus Healthcare Partners LLC to parlay their investment and financing expertise into an investment platform to buy senior living properties across the country in partnership with private equity capital sources. Since then, they have purchased 16 properties for more than $400 million, and have sold eight of them at what we believe to be a tidy profit. Several months ago, they decided it was time to form their own fund and went into the market seeking about $200 million. Apparently, they underestimated themselves and their track record. Focus recently closed on a $312 million discretionary real estate fund that will focus on the... Read More »
Enlivant Expands In Midwest
Enlivant expanded its presence in the Midwest with the acquisition of four senior living communities in Indiana (3) and Iowa (1). Ben Firestone and Michael Segal of Blueprint Healthcare Real Estate Advisors represented the publicly traded REIT in its strategic exit of the assets. A national operator (which we believe to be Senior Lifestyle Corporation) also handed over the operations to the buyer, Enlivant. Built in the late 1990s, the four assisted living/memory care communities range in size from 35 units to 62 units, totaling 175 units. And although they were nearly all private pay, each community could improve their occupancy. That will be Enlivant’s task, which already has an existing... Read More »
Alley Sells In Knox City
Senior Living Investment Brokerage’s Matthew Alley, always active in Texas, added another sale to his resume, this one in the rural central Texas town of Knox City. Built in the 1960s, the facility featured 66 beds on 2.12 acres. It was losing money on about $1.7 million of revenues at the time of the sale, which was not helped by its 68% occupancy. The buyer, an independent owner/operator based in the Dallas-Fort Worth area, will focus on improving census and operating efficiencies. A local owner/operator sold it for $1.295 million, or approximately $20,000 per bed. With hard work, a profit can surely be made. Read More »The Price of Age in Seniors Housing
Largely, the relationship between the age of a seniors housing property (including assisted and independent living) and the average price per unit is a near-perfect correlation, as the newest communities tend to sell at higher prices than the older ones. That was not the case in 2016, which saw its oldest properties jump in price and its newer ones fall, compared with 2015. Communities built earlier than 2001 (the tail-end of the assisted living building boom) sold for $179,900 per unit, up from $153,800 per unit in 2015, according to The Senior Care Acquisition Report. The anomaly of the year occurred in the group of properties built between 11 and 15 years ago, which sold on average for... Read More »
SNFs, Medicaid and Healthcare Reform
Whether the House bill, the Senate bill, or anything that may come out of reconciliation, Medicaid reimbursement for SNFs is going to get squeezed. It is amazing the uproar, first over the House healthcare reform bill, and now the Senate bill. I have to admit, like Nancy Pelosi, I have not read either bill, and I also prefer to wait until something actually becomes law to see what it says. Will the ACA replacement cut Medicaid spending over 10 years by $834 billion in the House bill, or $772 billion in the Senate bill? Will the ranks of the uninsured grow by 23 million by 2026, or 22 million? Will the average skilled nursing facility lose $600,000 in annual Medicaid reimbursement under the... Read More »Capitol Seniors Housing Builds Its Portfolio
Washington, D.C.-based Capitol Seniors Housing headed up the coast to build a brand-new assisted living/memory care community in Shrewsbury, New Jersey, an affluent suburb of New York City. The firm utilized an existing operating partner, Chelsea Senior Living, which already operates 10 senior living communities in the Mid-Atlantic on behalf of CSH, to third-party manage the new 85-unit community. To finance the project, Aron Will of CBRE arranged a $16.75 million, non-recourse loan with a floating-rate term from a regional bank. The five-year term includes 48 months of interest only. Construction cost is estimated at $29.3 million, or about $345,000 per unit. That is $100,000 per unit... Read More »Ensign Expands Into Texas and Wisconsin
The Ensign Group boosted its position in two markets with the acquisition of five assisted living communities previously operated by Brookdale Senior Living. First, in Texas, where the company already owns nearly fifty properties, Ensign acquired two 37-unit assisted living communities located in the towns of Lancaster (Dallas MSA) and Paris (rural east Texas). Lately, Ensign has only acquired skilled nursing facilities in the state: one San Antonio SNF in February 2017 and two others previously owned by National Health Investors in April 2016, to name a couple. So, while Ensign may have veered slightly from its recent Texas strategy with those two communities, the company doubled down in... Read More »
The Consistency of Skilled Nursing Facility Expense Ratios
Just like the average cap rate, the average expense ratio in the skilled nursing market for facilities sold has been very consistent. For the past five years, it has had a low of 88.2% and a high of 88.7%, for a very small 50 basis point spread, according to the 2017 Senior Care Acquisition Report. It was 88.5% in 2015 and 88.6% in 2016, just to show the consistency. Obviously, this excludes expenses such as interest, depreciation, amortization, taxes and rent. When these are all included, it is clear to see why the skilled nursing industry complains to their elected representatives as well as CMS that it is difficult to make money. And future cuts to Medicaid (as promised by both the... Read More »Schedule a demo
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