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 »
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 »Schedule a demo
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