IPA Seniors Housing’s High Quality Sale
We hope the team of Mark Myers and Joshua Jandris from IPA Seniors Housing had a big celebratory dinner in San Diego for their latest skilled nursing transaction, which involved seven facilities and 1,456 total licensed beds. Called “The McGuire Portfolio,” these facilities are located mainly in the Buffalo, New York area (five), with one in East Patchogue, Long Island and one in Warren, Michigan. The Warren facility was the largest with 297 beds, while the others range from 153 to 216 beds. Occupancy was the lowest at the Michigan facility (at 90%), but was consistent at around 96% across the rest of the portfolio, which averaged roughly 35 years old. The portfolio was made more... Read More »Greystone’s Freddie Mac First
In a first for the seniors housing industry, Greystone closed Freddie Mac’s first-ever lease-up loan for a client in Northern California. More common in the multifamily market, the lease-up program is for experienced clients to lock-in low interest rates earlier in the process for refinancing newly-built properties. Now, for a just-built 66-unit assisted living/memory care community in San Jose, the team of Scott Kavel, Neal Raburn and Cary Tremper of Greystone provided a $27.5 million Freddie Mac loan, with an 11-year term, 30-year amortization and a fixed interest rate. The loan takes out the original construction loan just three months after the community opened. We suspect lease-up was... Read More »Justin Hutchens a CEO Again
HCP, Inc. (NYSE: HCP) just announced that Justin Hutchens, elected president of the REIT in January, will be leaving to be CEO of HC-One, one of the largest care home providers in the United Kingdom with more than 300 properties. A little over two years ago, Formation Capital Safanad and Court Cavendish purchased healthcare property group NHP, which included the HC-One portfolio. Funding for that acquisition just happened to come from HCP, to the tune of about $630 million. In addition, it subsequently purchased 36 HC-One properties. So, HC-One and HCP are no strangers, and we believe that this did not come out of the blue, and that the HC-One investors decided that perhaps it was time to... Read More »Recent Senior Care M&A Deals, Week Ending March 31, 2017
Check out our recent senior care M&A transactions! Long-Term Care AcquirerTargetPrice Regional operatorThe McGuire portfolioN/A Not disclosedRiverwood Lodge Assisted Living$1.5 million Regional owner/operatorSerenity Gardens$3.8 million Regional companyKeystone Gardens & Keystone Meadows$11.15... Read More »KeyBank Arranges Over $700 Million for Blackstone’s Big Brookdale Acquisition
Blackstone and Brookdale Senior Living are in the news again. Working with KeyBank Real Estate Capital’s healthcare business, the joint venture received about $703 million in financing to fund Blackstone’s acquisition of 64 Brookdale-operated communities from HCP, Inc. A Fannie Mae credit facility makes up most the financing, which was arranged by Charlie Shoop of KeyBank and provides long-term, non-recourse, flexible financing. Meanwhile, KeyBank provided the balance from its balance sheet, in a transaction led by Peter Trazzera. The total financing represents about 62% of the $1.125 billion purchase price, which came out to approximately $188,500 per unit. That was for 100% of the... Read More »What to Pay For an “A” Quality Assisted Living Community
It is becoming increasingly apparent that there are two separate markets for assisted living properties between those we consider “A” properties and those that are “B” properties. We first separated out these two markets in 2012 (and did so again in our just-published 2017 Senior Care Acquisition Report) based on the properties’ age, size and location, and while there will likely be some “A” communities in with the “B” communities (and the other way around), it all evens out. The difference was stark in 2016, with “A” properties averaging $265,700 per unit, compared with $94,200 per unit for “B” properties. That difference of $171,500 per unit easily beats out 2015’s $110,100 per unit gap... Read More »
Strawberry Fields REIT Refinances Scottsburg Skilled Nursing Facility
Six years after initially leasing a skilled nursing facility in Scottsburg, Indiana, and three years after purchasing it, Strawberry Fields REIT LLC is refinancing the facility with a $4.4 million 35-year HUD loan, featuring a 3.65% fixed interest rate. The REIT utilized a new FHA lending partner to execute the transaction, which took out an existing conventional bank acquisition loan. The 99-bed facility certainly has room to improve, with occupancy of 69% based on licensed beds and around 80% based on operational beds. But it has increased in value since Strawberry Fields’ 2014 purchase, when the facility sold for $3.415 million, or $34,495 per bed. Recently, it has been appraised for... Read More »
Another Bridge Loan Arranged By Harborview
Eli Kutner, Senior Originator at Harborview Capital Partners, recently arranged a $36.3 million bridge loan to finance the purchase of two skilled nursing facilities in Nashville, Tennessee. Including both a senior acquisition loan, capex loans and an A/R line of credit, the financing features 12 months of interest only and partial recourse at 85% loan-to-cost. Mr. Kutner also arranged a competitive LIBOR+235 interest rate for all the loans. Well done. Read More »
Record Skilled Nursing Prices Have Peaked
After setting record prices for four straight years, the 2016 record price may have some staying power. As you know, the average price per bed for skilled nursing facilities hit a record in 2016 for the fourth year in a row. The number of properties selling for more than $100,000 per bed, which used to be reserved for only the very best facilities, also hit a record. I hate to be the bearer of bad news, but I believe last year’s record average price may have some staying power. As I said last week, I have been accused of being Mr. Doom and Gloom, but realistically, when looking at the landscape, there is little positive that would push prices higher. Medicare Advantage is pushing down... Read More »Investor Sentiment at the NIC Conference
Last week’s 60 Seconds with Steve video greeted everyone attending the NIC Conference in San Diego and asked what the sentiment might be during the conference. In years past, you could tell we were in a bull market with all the deal making going on in public, the exuberance of the crowds and the general noise level. Although the stated attendance was approximately 1,500, it did seem a little smaller than that, without the usual crowds in the lobby bar for one last nightcap and another round of industry gossip. The overall sentiment was one of caution, and this was especially true in the skilled nursing side of the business (see today’s 60 Seconds video). As we all know, the American Health... Read More »Schedule a demo
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