Memory Care: Buy or Build?
Investors in seniors housing have been flocking to the memory care market, as the sector has experienced unprecedented growth since the Great Recession. They are attracted to its need-based demand, higher rents, private payors and apparent dearth in supply in a number of markets (though given the amount of construction in the last few years that is becoming less and less true). But those investors that are interested in getting into or expanding their holdings in this market are faced with a question: do they build memory care, or buy? That is the topic of our upcoming webinar this Thursday at 1PM aptly named, “Buying or Building Memory Care.” Our moderator Steve Monroe and panelists Clint... Read More »Post Acute Partners Grows Again in Upstate New York
Post Acute Partners continued its growth in upstate New York, acquiring another not-for-profit skilled nursing facility in the Rochester area. A few years after it closed the acquisition of Elderwood Senior Care and its 16 senior care facilities (nine skilled nursing facilities, five assisted living communities and two independent living communities) all located in New York, the NYC-based firm has acquired seven more facilities, five of them from not-for-profit owners in its bid to become the largest provider of post-acute care services in upstate. Post Acute Partners most recently purchased a 126-bed skilled nursing facility in Lockport for $10 million, or $79,365 per bed. Previously... Read More »In-Hospital Skilled Nursing Facility Sells in Scranton
A 22-bed in-hospital skilled nursing facility in Scranton, Pennsylvania traded hands in what was a unique transaction for a few reasons. First, its size of just 22 beds is far below the industry average. To put it in perspective, the average size of SNFs that sold in 2016, according to the soon-to-be-released 22nd Edition of The Senior Care Acquisition Report, was 122 beds. Second, the facility is located on the fifth floor of the 186-bed acute-care Regional Hospital of Scranton, which helps explain the SNFs small size. And third, a not-for-profit, Allied Services Integrated Health System, purchased the SNF from privately-owned Senior Health Care Solutions, a scenario we typically see... Read More »Brookdale Senior Living Buy-Out in Limbo
It has been far too quiet on the Brookdale Senior Living buy-out front, other than its share price continues to slide as some investors may be giving up on a major capital event or sale of the company at a price point that interests them. The shares are trading at their lowest levels since early January, which, counterintuitively, may make it easier to get a deal done, if that is what the Board wants. We are still sticking with our opinion that only “stupid money” would pay the $20 to $25 per share for the company that several analysts have been saying is the true sum-of-the-parts value, which is why the price needs to come down so that a buyer would be able to offer some sort of premium,... Read More »
HHC Finance Firing on All Cylinders
Housing and Healthcare Finance (HHC Finance) was busy in February, closing three HUD transactions for nearly $43.7 million in business. First, in Nassau County, New York, a 218-bed/95-unit assisted living community obtained a $23 million loan with an interest rate in the low 3s. Built in 1960, the building had operated as a long-term psychiatric care facility until it was purchased by the current owner in 2001. Over the next three years, the owner, which has owned and/or operated several senior care facilities in the New York City area, invested $12 million in renovations and converted the property to a low-income assisted living community. Now with the current HUD refinance, the borrower... Read More »High Price for Santa Barbara Memory Care Community
Location clearly commanded a premium for a just-sold memory care community in Santa Barbara, which sold for $18.6 million, or $465,000 per unit, despite still being in lease-up. Built in 2015 as the only asset of the local owner, this community has 44 beds in 40 units on a 0.65-acre lot in scenic Santa Barbara. It was just 82% occupied at the time of the sale, but was still valued approximately $240,000 per unit higher than the average for AL/MC communities in 2016 (included in the 22nd Edition of The Senior Care Acquisition Report, to be published this month). The high rents can help explain the property’s appeal, ranging between $7,600 and $8,000 per month for private units, and about... Read More »CareTrust REIT’s Illinois Skilled Nursing Expansion
Since its spin-off from The Ensign Group in June 2014, CareTrust REIT has been one of the most active buyers in both seniors housing and skilled nursing M&A markets. It has grown from its initial portfolio of 96 properties to 158 net-leased healthcare properties and three operated seniors housing properties in 21 states. The acquisitions have also been located across the country. Just last month, the REIT acquired two memory care communities in the Milwaukee area of Wisconsin for $26.1 million, or $296,591 per unit. Now, CareTrust is purchasing a portfolio of five skilled nursing facilities, with 455 total beds, in Illinois for $29.2 million, or $64,176 per bed, with a 14.4% cap rate.... Read More »
Kindred Healthcare and Others Facing Labor Headwinds
Earnings season is almost over, and companies such as Kindred Healthcare, Genesis HealthCare and Brookdale Senior Living share the labor headwinds problem. Earnings season is almost over, and if there was one word coming from companies like Kindred Healthcare, Genesis HealthCare and Brookdale Senior Living, it was “headwinds.” Although there are different headwinds, one common denominator is labor, specifically its cost. A year ago, many companies were downplaying its significance. No longer. Genesis announced its earnings, and its stock dropped 16%. The Ensign Group announced, its stock also dropped 16%. Brookdale announced no news regarding a capital event and continuing occupancy... Read More »
The Senior Care Investors Have Spoken
Last week, we hosted a 90-minute webinar called “Seniors Housing M&A: The Numbers, the Deals and the 2017 Forecast” with panelists Arnold Whitman of Formation Capital, Bill Mulligan of Ziegler and Alan Plush of HealthTrust, and Steve Monroe moderating. The panel discussed our 2016 M&A statistics for the skilled nursing, assisted living and independent living M&A markets (to be published in the 22nd Edition of The Senior Care Acquisition Report this March), which saw new record-high prices for SNFs and ALFs. But those high prices contradict a growing sense of caution among investors, and lead us to wonder if we have passed the peak. Our listeners to the webinar certainly thought... Read More »
Another Propero Transaction for Arcadia Communities
Lancaster Pollard’s Propero Fund II was the financing source of choice once again for Arcadia Communities as it continues to grow its portfolio. Founded in 2008, Louisville, Kentucky-based Arcadia owns and/or operates three seniors housing and care communities in Kentucky and Michigan. Six months ago, the company obtained $12.1 million from Lancaster Pollard’s second Propero fund to develop a 79-unit community in Clarksville, Tennessee, which will include independent living, assisted living and memory care services. Now, Arcadia has another project in development, a 79-unit IL/AL/MC community in Bowling Green, Kentucky. Propero, which invests in seniors housing properties as the sole... Read More »Schedule a demo
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