Lancaster Pollard’s $50 Million Month
Lancaster Pollard showed off its financing prowess, closing a variety of transactions this month that totaled over $50 million. Bill Wilson first arranged a $9.5 million HUD loan on behalf of an Oklahoma City-based senior care operator to refinance one of its skilled nursing facilities and fund the recent construction of a therapy addition. Lancaster Pollard and the borrower have a strong relationship, working together on five transactions, totaling over $40 million, since 2014. Mr. Wilson, with assistance from Joe Munhall, also obtained a $17.4 million construction loan for a 120-unit senior living community (with independent living, assisted living and memory care) in Lincoln, Nebraska.... Read More »
HJ Sims Hits It Out Of Overland Park
A CCRC in Overland Park, Kansas is planning a large expansion to its independent living services. Perhaps they read Marcus & Millichap’s National Seniors Housing Report, which reported average IL occupancy steady at 91.7% in 2016, and predicted it will rise 10 basis points in 2017. That is close to the census peak in 2008, when IL communities averaged 92% occupancy, before the Great Recession reared its ugly head. The Overland Park’s IL census is very strong too, at 98%, which prompted the 76-unit expansion effort. Built in 2000, the community already features 64 IL villas, 54 assisted living units, 52 skilled nursing units and 36 memory care units. Census was in fact strong all... Read More »
Real Estate vs. Business Value For Healthcare Properties
Acuity level can impact what is driving business value and real estate value in healthcare properties, something all lenders and investors should understand. The separating out of business value from real estate value in healthcare properties has always been a controversial issue. When lenders lend against the value of an LTAC or a skilled nursing facility, their security interest is really in the real estate, and not the business. But the real estate without that business, without that CON or license, can see its value drop quite suddenly. Should anyone care where the values lie if they are really looking at the full enterprise value? Absolutely. What happens if a facility is old, has... Read More »
Berkadia Gets Busy
The team at Berkadia has been busy lately, closing seven HUD, Fannie Mae and bridge loans for a number of clients across the country. Managing Director Heidi Brunet handled five of those for two separate borrowers. First, two years after it opened, an 87-unit assisted living/memory care community in South Carolina is refinancing its construction debt with an $18.5 million, 10-year, fixed-rate Fannie Mae loan. Lease-up has evidently gone well, as occupancy stands at 93%. The same borrower also received from Ms. Brunet a $5.3 million, 10-year, fixed-rate supplemental loan through Freddie Mac to fund an expansion project at a high-end Virginia CCRC. The property was originally built in 2011... Read More »
HHHunt Heads North
A Virginia real estate developer is making its second move north across the Potomac, though unlike the Army of Northern Virginia, it is stopping short of Pennsylvania. The company, HHHunt, already has 12 senior living communities in North Carolina, six in Virginia, and one in Severna Park, Maryland, which it opened in late-2015. Now, HHHunt has just broken ground on a development in nearby Crofton (located between Washington, D.C. and Baltimore), at a cost of $29.4 million, or $309,500 per unit. The property is situated on about 10 acres next to the Walden Country Club and will feature 95 assisted living and memory care units under the “Spring Arbor” brand. Other HHHunt developments (most... Read More »
Deals Down So Far in 2017
Long-term care has experienced a dip in M&A, but after nearly three straight years of 80+ transactions per quarter (starting in Q3:2014 with 83), with a couple exceptions, it is about time the M&A juggernaut slows down a bit. The first quarter’s volume fell to 76 deals, down from 93 in the previous quarter and from 84 in the year-ago quarter. And as of May 23, 2017, deal volume has so far not kept pace compared with the same period in 2016 with just 118 long-term care transactions recorded compared with 145 in 2016, a 19% difference. However, spending has nearly doubled (to $7.52 billion so far in 2017 from $4.37 billion in 2016), thanks to a few large deals that were announced in... Read More »Berkshire Health Systems Acquires Holyoke CCRC
The Loomis Communities just sold its CCRC in Holyoke, Massachusetts (Springfield MSA), leaving it with three communities in Amherst, South Hadley and Springfield. Loomis had been operating at the property since 1981, when it was independent living with a small skilled nursing facility. It now features 92 skilled beds, 68 IL units and 13 AL units on 4.9 acres. Loomis’ other properties do not have such a large SNF portion, so a sale was pursued. The buyer ended up being Berkshire Health Systems, a not-for-profit health system with a portfolio of 14 other rehab/long-term care properties, among other healthcare properties/businesses. Berkshire will keep the “Loomis” name on the facility for a... Read More »BMO Has Georgia On the Mind
Solomon Development is building a new senior living community near the heart of Atlanta, Georgia (in Decatur, to be exact) with the help of the BMO Harris Healthcare Real Estate Finance group. Featuring 96 assisted living, 71 independent living and 33 memory care units, the project is located on a 3.5-acre lot with easy access to local shops and amenities. It is estimated to cost approximately $67 million, or around $335,000 per unit, to build, which is far above the $220,000-per unit average for seniors housing properties in the state, according to our in-house senior living development database dating back to 2013. BMO is financing approximately two-thirds of that cost with $44.2 million... Read More »AdCare Adds Alabama Assisted Living Community
In the midst of a turbulent Spring when AdCare Health Systems’ board fired its CEO, Bill McBride for embellishing his resume (he said he received an MBA from UCLA, but apparently, he didn’t), the company still managed to add one more assisted living community to its now-30-property portfolio. Closing its first acquisition since it become solely a landlord, AdCare originally announced a letter of intent to purchase the community back in February, but closed on the deal just this month. Located in Glencoe, Alabama, it was built in 1985 with 52 assisted living units and recently (in 2012) added a 33-unit memory care portion. This was the only seniors housing asset of the seller and... Read More »MidCap Financial’s Latest HUD Financing
Brett Patrick, Managing Director at MidCap Financial Housing Capital, recently arranged $7.95 million in 35-year HUD financing on behalf of a skilled nursing facility in Sun City West, Arizona (Phoenix MSA). The loan took out existing bank debt on the facility, which was built in 1985. There are 137 beds in the one-story building, which breaks down to 68 semi-private units and one private unit. Occupancy stood at 84% (over the current national average of 81%, according to NICMAP), with a 60% Medicaid census. Read More »Schedule a demo
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