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 »
Back to Business for KeyBank
Less than a month after KeyBank Real Estate Capital announced its $703 million financing to fund Blackstone’s purchase of 64 seniors housing communities from HCP Inc., it was back to business for the commercial real estate financing provider with another HUD refinance. John Randolph of KeyBank’s Healthcare Group arranged a $15.4 million HUD loan for a 120-bed skilled nursing facility in Harlingen, Texas, which is located just a few miles from the U.S.-Mexico border. The 35-year loan refinanced existing debt on the facility, which was built in 2012, which helps explain the high value and debt of $128,300 per bed. Read More »
Red Tape Results in Senior Care Sale
Sometimes size really does matter for the owner of a senior care facility, especially in this era of red tape gone rampant. We know that with every regulation, there is an added cost coupled with the intended benefit. But it reaches a point where those single- or two-facility owners in senior care cannot keep up and provide the same quality care at a profit. That was the stimulus for a single-asset owner’s exit from the senior care business, which was handled by Toby Siefert and Nick Cacciabando of Senior Living Investment Brokerage. The owner originally built the property as a 50-bed skilled nursing facility in Portage, Pennsylvania (about 80 miles east of Pittsburgh) in 2003, adding a... Read More »Seniors Housing Occupancy Continues Its Decline
As many people expected, seniors housing occupancy levels declined in the first quarter this year, with assisted living posting larger declines than independent living. According to the recently released NIC MAP data, primarily assisted living communities in the 31 primary markets posted a sequential drop in occupancy of 50 basis points to 87.2%, and a year-over-year drop of 100 basis points. Even though these numbers were sort of expected, there was some hope that the sector was starting to turn things around in the quarter. Not yet. It was a little surprising that half the year-over-year drop came in one quarter, however. On the independent living side, occupancy in the top 31 markets... Read More »Assisted Living Commands a Portfolio Premium in 2017
Every year in our Senior Care Acquisition Report, we try to determine what a market “portfolio premium” would be for assisted living communities, with a portfolio including three or more properties. However, just because there is a portfolio of properties, it doesn’t always mean that the buyer will pay more for them. The premium has to do with both the number of properties as well as the quality. In most years, there is a sizable difference in the average price per unit for portfolios compared with smaller purchases. In 2016, we recorded a drop in the premium to $45,700 per unit, or a 4% drop from 2015’s $47,600 per unit premium. Both premiums fall short of the record ($69,000 per unit in... Read More »From Coulterville to California for Cambridge Realty Capital Companies
Cambridge Realty Capital Companies closed a couple of transactions for clients across the country. First up, in Coulterville, Illinois, the Cambridge team arranged a $3.76 million HUD refinance for a 71-bed skilled nursing facility. The owner, a Missouri LLC, received a 35-year, fully amortized term. Then, a California LLC received a $3.7 million HUD loan, courtesy of Cambridge’s Hymie Barber, to refinance its nearly 20-year old 58-bed assisted living community in Arroyo Grande, California. The loan comes with a 27-year term. Read More »LCB Senior Living Brings Its Luxury Brand to Fairfield County
LCB Senior Living has already established itself as a luxury provider of assisted living/memory care services in New England, with 11 communities in Massachusetts, three in Vermont, two each in Connecticut and New Hampshire, and one in Rhode Island. The developer also has two construction projects in Massachusetts and one in New Hampshire. But now, LCB is taking its luxury brand to the high-income and high-cost Fairfield County for the first time, with two developments in Stamford and Darien, Connecticut (both about 45 miles from New York City). In June 2016, LCB purchased a one-acre parcel near downtown Stamford and is currently building a seven-story, 104-unit assisted living/memory care... Read More »
Senior Care Staffing Woes Continue
Too many stories about employee theft and abuse, and Medicaid and Medicare fraud, cloud the senior care industry’s future. I don’t know about you, but I am always surprised by how many stories I read about employee theft in senior care communities, Medicaid and Medicare fraud by skilled nursing owners, assaults by employees on residents who they are supposed to take care of. What is it about this industry that seems to attract people with, well, less than good intentions? On the fraud side, there is one answer, of course, and that is greed. The problem, however, is that some of these people get caught, and then come back under a different name or using a front LLC and start all over... Read More »
Quality Care Properties Getting Ready To Deal
Timing is everything. In the April issue of The SeniorCare Investor, we wrote about what the decline in financial performance at HCR ManorCare (HCRMC) from the 12-month period ending September 30, 2016 to the 12-month period ending December 31, 2016. Annualized EBITDAR dropped by $5.5 million which, although not a big number, was enough to cause fixed coverage to drop a little to 1.10x for the December 31 full-year period. At the property level, however, the coverage increased to 0.84x, a ratio that is still unacceptable and not sustainable. The company’s skilled nursing facilities are at 82.6% occupancy, which is also low for a company of its quality, and the 60 assisted living/memory... Read More »Schedule a demo
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