The Price of Age in Skilled Nursing
We have covered the demise of the 40-year-old skilled nursing facility in articles and webinars over the past few years, and the acquisition market has taken notice. In 2015, 52% of the properties sold were 40 years old and older, which made sense since nearly half the entire U.S. inventory of SNFs are this old. By 2016, however, 52% of the properties sold were between 20 and 40 years old, which in many cases are considered to be relatively “new.” This helps explain why the average and median price per bed jumped so much in 2016. The percentage in the newest category (less than 20 years old) remained relatively similar from 2015 (22%) to 2016 (20%). With the newer skilled nursing... Read More »Meridian Capital Group Funds Chicago SNF Deal
When three skilled nursing facilities sold in Chicago, Meridian Capital Group was there to arrange $48 million in balance sheet financing for the undisclosed buyer to fund the deal. Located across the city, the portfolio includes a large 310-bed facility, plus two smaller facilities with 156 and 143 beds. Occupancy averaged 85% across the portfolio. The financing covered 75% of the acquisition costs, so we can estimate the purchase price to be around $64 million, or $105,100 per bed. That would be near the national average for skilled nursing prices a few years ago, but not anymore with the prevalence of facilities valued over $100,000 in the last couple of years. The Meridian team of Ari... Read More »Recent Senior Care M&A Deals, Week Ending April 21, 2017
Check out our recent senior care M&A transactions! Long-Term Care AcquirerTargetPrice CareTrust REIT, Inc.Hope Center$11 million Regional operatorBella Vista Manor$3.3 million Edgewood Real Estate Investment TrustLegends at Heritage... Read More »Things Not Adding Up At AdCare
It has certainly been a tough few years for AdCare Health Systems. Its former Vice Chairman, Chris Brogdon, has been accused of several securities laws violations. Then the company decided it wanted to get out of the operating business, which it was not doing too well at, and focus on being a landlord, much like a REIT. In a new scandal, an institutional investor, together with a third party, commissioned a little bit of research that turned up some fluff on the resume of the just-ousted CEO, Bill McBride. Apparently, McBride indicated that not only did he graduate from UCLA, but that he also had an MBA from the school. Apparently not. So, the board fired him. AdCare’s stock had not been... Read More »Pay Up, Up North
Once again on the seniors housing side, the Northeast region has topped the charts for the seventh year in a row (per the 22nd Edition of The Senior Care Acquisition Report), rising to new heights at $292,900 per unit, up 46% from $201,100 per unit in 2015 and even up 4% from 2014’s average of $281,700 per unit. With its high land values and construction costs, it is not surprising that the Northeast has the highest prices. Plus, the Northeast properties are generally in heavily populated, wealthier areas, driving rents up. The West, dominated by sales in expensive markets such as Los Angeles, San Francisco and Seattle, not surprisingly was valued second-highest among the regions,... Read More »
Make Way For Watercrest Senior Living Group
Experience matters when it comes to seniors housing development, especially as newcomers and new money are joining the fray. We’ve all heard cries of overdevelopment in certain markets, which can lead to a host of issues for the industry, including falling occupancy, discounted rents and staff retention. Having so many new entrants to the market may only magnify their mistakes, creating some bad PR for the industry. But successfully navigating these choppy waters have been the experienced principals of Watercrest Senior Living Group (WSLG), Marc Vorkapich and Joan Williams. Since its 2012 founding, WSLG has grown steadily, with four communities open so far in Florida, all of which have... Read More »
Two Transactions From HJ Sims
HJ Sims recently helped a CCRC in Ponte Vedra Beach, Florida (Jacksonville MSA) refinance its existing bond debt, generating significant savings for the well operating property. Developed in the mid-1980s, this community features 227 independent living units, 38 private assisted living units and 60 skilled nursing beds. Occupancy has historically been high and consistently over 95% for the independent living units, which recently received a renovation. The community’s Series 2007 bonds were not eligible for an advance refunding, because they had repaid the 1993 bonds that were used to advance refund the original 1987 issuance. However, HJ Sims worked with the community’s commercial bank... Read More »
Independent Living Market Outperforms
First quarter data from NIC MAP shows IL occupancy again exceeding assisted living, but with less new development. What is it about the independent living community market that keeps occupancy more stable than assisted living, yet sees a much lower level of new development? In the latest NIC MAP data on the first quarter, the IL market outperformed the AL market again, even though IL occupancy did slip a bit sequentially and year over year. I have a hard time understanding why there is not more development in the IL side of the business. Yes, they are larger properties that require more capital and a longer fill time, but it just seems they can be more tailored to any market’s particular... Read More »
Dealing in Dallas
We’ve all heard the warnings of overdevelopment in Texas, particularly of new assisted living and memory care communities. One of those MSAs that has seen plenty of groundbreakings is Dallas, with nearly 5,000 units built from Q4 2012 to Q4 2016, according to NIC MAP. While the market is in better shape than Austin, Houston and San Antonio in terms of construction versus inventory, occupancy has been consistently low in Dallas, hovering around 85% for the past few years. We wonder how well those new communities have been filling up. That was probably on the mind of an out-of-state buyer when it purchased a recently built assisted living/memory care community in Allen, Texas, an affluent... Read More »Adding Value With Memory Care
Over the last two cycles, an interesting trend has occurred in the valuations of assisted living versus assisted living with a memory care component. At the beginning of bull markets, traditional, standalone assisted living communities typically are priced higher than communities with memory care. Then as the bull market strengthens or peaks, the reverse is true, and assisted living/memory care (AL/MC) communities overtake traditional assisted living. This was never more true than in 2016, the sixth year of this bull market. Communities with a memory care component sold on average for $225,400 per unit, according to the 22nd Edition of The Senior Care Acquisition Report, while AL-only... Read More »Schedule a demo
Gain access to the best healthcare and long-term care investment intelligence, data, and analysis.
