What Happens When You Weight A Cap Rate By Beds?
Partly due to historical precedent, we have always presented our cap rate analysis on an unweighted average basis, meaning that the cap rate for a portfolio of facilities would carry the same weight as that of a single 80-bed facility. For those who believe that portfolios will usually command a lower cap rate, then a weighted average would be the most accurate method to determine what is really happening in the market. Even a 200-bed facility acquisition, because of the implied increase in investment risk, should in theory be treated differently from that of a 50-bed rural facility. Consequently, a few years ago we went back and recalculated the cap rates to weight them based on the... Read More »
New York Values Shine
While the rest of the world looks upon the skilled nursing sector as a business full of risk, we thought it may be instructive to take a look at the New York market, which we all know is a world unto itself. We recently reported on a sale in New York City of a 364-bed skilled nursing facility (details appearing in this issue) for $87 million, or $239,000 per bed. While not the highest sales price, it may be the highest price per bed, a least in recent memory. In the past three years, there have been 13 sales that closed in New York with prices over $100,000 per bed, making it perhaps the most expensive state in the country, on average. But it gets better. When looking at the 18 SNFs and... Read More »
Hunt Mortgage Group Hits It Out Of The Park
Hunt Mortgage Group, a subsidiary of Hunt Companies and a commercial real estate lender, has been slowly building its seniors housing/skilled nursing business since its launch in 2015. Now, Director Jim Neil has announced the firm’s largest senior care transaction yet with a $27.6 million HUD refinance of eight skilled nursing facilities in Texas. The borrower, Senior Living Properties, significantly improved operations across the 841-bed portfolio, which consists of primarily older, rural facilities. Since taking over management in 2014, Senior Living Properties also entered the facilities in the Texas UPL program, which boosted their performance. With the refinance completed, the company... Read More »
Quarterly Results Are In
If you go by the number of transaction announced from April 1, 2017 to June 30, 2017, the second quarter may seem a bit slow, especially when compared to the recent quarterly highs of 90 deals in the second quarter of last year and of 93 deals in the fourth quarter of 2016. Keep in mind, these are preliminary numbers, as we hear of more transactions as the year goes on. M&A activity stayed virtually even in the second quarter, down 1% over the previous quarter, to 75 transactions. The quarter’s deal volume makes up 24% of the 315 deals announced within the past 12 months. Nothing too drastic there. However, based on revealed prices, approximately $9.7 billion was committed to finance... Read More »
Watercrest Partners With United Properties In Latest Development
Watercrest Senior Living Group has announced its latest senior living development project, and a brand-new partnership too with United Properties. The joint venture plans to break ground this Fall on a 128-unit luxury assisted living/memory care community in Naples, Florida, with an expected opening in early 2019. United Properties has already purchased the property and is entering the Florida market with this project, after developing 15 seniors housing communities in the Minneapolis, Minnesota and Denver, Colorado areas. Watercrest, on the other hand, is well versed in the Florida seniors housing market, having opened communities in Lake Nona, Sebastian, Jacksonville and Viera, so far.... Read More »
No Deal For Brookdale Senior Living Yet
Brookdale Senior Living remains in a rut, and the Chinese option may be disappearing. For some reason, Brookdale Senior Living has kept out of the news recently, which is a good thing. What’s not so good is that its share price continues to be stuck in a rut. What also is not so good is that with the recent second quarter occupancy numbers out of NIC, we have to assume that given Brookdale’s size, their occupancy levels contributed to the downward trend in occupancy. Also not good. Everyone continues to wait on news of a buyer for Brookdale to come forward. The Chinese card seems to be disappearing given that the U.S. authorities are scrutinizing Chinese sponsored acquisitions more... Read More »Capital One Heads To HUD
The future for a 40-year old skilled nursing facility is not rosy, as we have discussed recently, and with every passing year, it becomes bleaker. These facilities face new competition in the form of short-term rehab and transitional care facilities, which feature nearly all private rooms and take a majority of the Medicare patients. And with lengths of stay decreasing, reimbursement tightening and wages increasing, an older SNF has fewer options to remain profitable while still providing quality care. There are potential solutions, however, which the experienced owner/operators of a skilled nursing facility in Gresham, Oregon (Portland MSA) are putting into practice. The 128-bed facility... Read More »
SNF, AL and IL Values All Remain High
For the four quarters ended June 30, 2017, skilled nursing, assisted living and independent living properties remained at or near their all-time high values, while cap rates decreased across the board. A quarter does not make a trend, but across the seniors housing and care spectrum, values have remained stubbornly high. Stubbornly? Skilled nursing values peaked in 2016, while seniors housing peaked in 2014 with a matching peak in 2016. People, including myself, thought that values would slowing decline, especially if interest rates spiked up. Well, neither event has occurred. For the 12 months ended June 30, 2017, skilled nursing average prices posted a small decline to $97,900 per bed... Read More »Housing & Healthcare Finance’s Bridge Lending Success
Housing & Healthcare Finance’s Capital Advisory Group has certainly been a success since its launch nearly two years ago. Focusing on bridge loans and credit facilities, the program has closed over $650 million in transactions, so far. Isaac Haas and Neil Gamss, who lead the group, continued their good work into this summer, arranging over $100 million in bridge loans and credit lines in May and June. The largest of the closings included a $53 million bridge loan for a portfolio of skilled nursing facilities (and 948 total beds) in Wisconsin. Next up, Messrs. Haas and Gamss arranged a $37 million bridge loan on behalf of a SNF portfolio in Ohio with a combined 760 beds. A skilled... Read More »Recent Senior Care M&A Deals, Week Ending July 21, 2017
Check out our recent senior care M&A transactions! Long-Term Care AcquirerTargetPrice Investment GroupGenerations Assisted Living and Wellness$8 million Real estate investorSable Care & Rehabilitation Center$5.4 million Summit Healthcare REIT, Inc.Pennington Gardens$13.4 million Chartwell Retirement ResidencesChartwell Le Teasdale$56.95... Read More »Schedule a demo
Gain access to the best healthcare and long-term care investment intelligence, data, and analysis.
