Ensign Group Shares Plunge
The Ensign Group was the first of the operating companies to report fourth quarter earnings, and the company took a stumble. Earnings were significantly below estimates because of some difficulties transitioning acquisitions, and were also impacted by labor costs and increasing healthcare costs. As a result, management lowered its guidance for 2017 for both revenues and earnings. In addition, occupancy was lower at 74.6% and same-facility occupancy was down nearly 150 basis points year over year. Occupancy at Ensign has historically been lower than its peers because it acquires so many underperforming properties with low occupancy rates that it expects to turn around. We have often... Read More »
Record Skilled Nursing Facility and Assisted Living Facility Prices in 2016
The average skilled nursing facility price per bed set a record for the fourth year in a row, and the average assisted living facility price per unit set a record for the third straight year. What can I say, other than I am a bit astounded? We have tallied the results of the seniors housing and care M&A market for 2016, and there were a few records set, again. First of all, as I alluded to last week, the skilled nursing facility market set a record for the fourth straight year, with the average price reaching $99,200 per bed, a 15% increase over the previous record set in 2015. Why such an increase? A record number of skilled nursing facilities that sold for more than $100,000 per bed.... Read More »
New Future for HUD Lender
Housing & Healthcare Finance (HHC) is bringing on a new face to oversee its expansion efforts in the healthcare lending world, though this new addition is no stranger to healthcare finance. Keith Reuben, an industry veteran having been part of senior management at CapitalSource Inc. from 2001 to 2009, and then Executive Vice President of the Commercial and Specialty Finance Business at Capital One Bank from 2011 to 2015, has joined HHC as its CEO. The lender clearly has its niche in providing HUD financing to senior care properties, closing 28 transactions for a total of $355.9 million in FY2016, including the agency’s largest loan of the year: an $80.7 million loan to refinance a... Read More »Two Assisted Living Sales Close in Florida
Brad Clousing of Senior Living Investment Brokerage is starting strong this year, selling three assisted living communities in two transactions for a combined $23 million. Partnering with Patrick Burke, Mr. Clousing first sold a 37-unit assisted living community in Martinsville, Virginia, a transaction that was a long time coming. In July 2015, the same selling partners sold the adjacent 300-bed skilled nursing facility for $28.5 million, or $95,000 per bed, in a sale/leaseback transaction to Omega Healthcare Investors. The long-term lease came with an initial yield of 9.25%. Awaiting TPA approval, the assisted living community eventually sold to Omega as well at a price of $7.5 million,... Read More »
Two Utah Assisted Living Communities Sell
Paying $26.5 million, or $236,500 per unit, a real estate investment firm acquired two assisted living communities in southern Utah. Under “The Retreat” brand, these communities are both located in the town of St. George (in Washington County). Built in 2012, The Retreat at SunRiver has 48 units (36 assisted living and 12 memory care) on 1.72 acres, and the 64-unit Retreat at Sunbrook (50 AL and 14 MC units) sits on 2.38 acres and features unique amenities such as a putting green, bocce ball court and water landscaping. Occupancy exceeded 90% at both communities, and the operating margin was above 40% throughout the transaction period. Meridian Senior Living will lease the communities from... Read More »Build with Grandbridge Real Estate Capital
A brand-new seniors housing community is being built in Aiken, South Carolina (Augusta, Georgia MSA) with the help of a construction loan arranged by Richard Thomas and Meredith Davis of Grandbridge Real Estate Capital’s Seniors Housing and Healthcare Finance Group. The 74-unit/80-bed to-be-built community is being developed by Principal Senior Living Group and will feature the “Benton House” brand name. Grandbridge originated a $10.66 million loan through BB&T Bank on behalf of the community. Read More »Hospital system buys vacant skilled nursing facility
We have written about the dilemma faced by many 40-plus year-old skilled nursing facilities, that cannot compete with those newer all-Medicare facilities with all the bells and whistles (think Mainstreet). Should they convert to low-income assisted living facilities, for which there is and certainly will be a need? Or will the space be repurposed for something other than senior care? For Steve Thomes of Blueprint Healthcare Real Estate Advisors and his most recent transaction, it was the latter. Mr. Thomes sold a vacant 82-bed skilled nursing facility in Melrose, Massachusetts for $3.6 million, or $43,902 per bed. But instead of being closed due to survey issues, lawsuits, physical... Read More »
Senior care campus gets HUD and Fannie Mae financing
One size didn’t fit all at a senior care campus in Boise, Idaho when it decided to refinance its existing debt through two lending agencies: HUD and Fannie Mae. The property, which comprised a skilled nursing facility and an independent/assisted living community, had a single existing mortgage, but required two different lenders to fund two separate loans. So Walker & Dunlop secured a 10-year $20.8 million Fannie Mae loan for the seniors housing community, which was built in 1992 with 142 independent living and 51 assisted living units. Then, for the skilled nursing facility, Walker & Dunlop arranged a $9 million HUD mortgage with a 35-year term. Built in 1986, the facility... Read More »
Struggling skilled nursing facilities sell in Texas
We have seen a number of skilled nursing facilities sold this month that have seen better days, or at least hope to. The theme continued at the start of February, two SNF transactions in Texas were announced in succession involving struggling facilities. First up, The Ensign Group purchased a facility in San Antonio that was just 34% occupied. The campus, which features 124 skilled nursing and 17 assisted living beds, is subject to a long-term ground lease. There is some promise however, as the facility is adjacent to a 400-unit independent living community, a population for which it hopes to provide care and services. Ensign acquired both the real estate and operations, which it added to... Read More »CareTrust REIT’s Wisconsin senior care strategy
CareTrust REIT just doubled down on its Wisconsin senior care strategy. Almost a year after acquiring an assisted living community in West Allis, Wisconsin from Priority Life Care (and then leasing it back), CareTrust is acquiring two more memory care communities in the Milwaukee MSA for approximately $26.1 million, or $296,591 per unit. The communities were well occupied (both at 97%) and relatively recently built (one property was built in 1997 and 2011 and the other was in 2013). Added to a master lease with Premier Senior Living for the remaining initial term of 14 years (with two five-year renewal options and CPI-based rent escalators), the communities are expected to generate annual... Read More »Schedule a demo
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