Net-worth nets results
A high net-worth healthcare real estate investor saw quite the value-add opportunity in a portfolio of five assisted living communities located throughout Central Florida. The properties were perhaps fated to change hands, as they were acquired by the seller (a publicly traded REIT) as part of a large merger a few years ago, but were not seen as “core” communities. There is some work to be done too. Built from the mid-1980s to the early-1990s, the buildings need some capex. And despite a stable occupancy in the mid- to high-80s, a significant portion of the census was Medicaid payors. Under management of a national operator (which had been in place for a short time before the REIT took... Read More »
How does Harborview do it?
Harborview Capital Partners has been knocking it out of the park recently, as many of you will read in the December issue of The SeniorCare Investor, which is landing on desks early next week. The firm has closed a significant amount of business since November 1, and the transactions just keep on coming. Eli Kutner originated a $30 million bridge-to-HUD refinance of a 133-bed skilled nursing facility in West Hollywood, California, which also provided net cash-out proceeds to the borrower in excess of $12 million. The loan came with a LIBOR+2.86 interest rate, two-year term with one-year extension options, 24 months of interest-only payments, and a 25-year amortization. Ephraim Kutner and... Read More »
Genesis HealthCare, Kindred and Brookdale Working With REITs
It was not easy, but Genesis HealthCare, Kindred Healthcare and Brookdale Senior Living have worked with their REITs to strengthen all concerned. In reviewing the events of the year, I think perhaps the most important ones involve Genesis HealthCare, Kindred Healthcare and Brookdale Senior Living. And, of course, the REITs with close ties to them. With regard to Genesis, I know it took some brass ones for Welltower to work through their various leases with Genesis and sell a large number of the properties. But the important aspect was the reduction of the rents and the smaller annual escalators that will keep Genesis on an upward track. Investors liked it, boosting the share price by 37%... Read More »
No Worries in Missouri
The trio of Ben Firestone, Michael Segal and Josh Salzman, Esq. from Blueprint Healthcare Real Estate Advisors sold three rural skilled nursing facilities in the southeast corner of Missouri on behalf of a public REIT owner. The facilities were the only three in the state to be managed by the Texas-based tenant. So management could perhaps be tightened by an in-state operator, as the portfolio’s census had fallen in recent years to below 50% in the six months ended March 2016, annualized. Cash flow was also negative at two of the facilities, and not trending well. The age of the buildings did not help matters, with one facility built in 1967, although the other two in the early-1990s. But... Read More »
Give and Receive
A relatively new assisted living community in Vancouver, Washington was already under control of a Receiver when it was sold to a regional operator for $7.5 million, or $156,250 per unit, with an 8.7% cap rate. Built in 2013 by Oregon-based Elite Care, the 48-unit community was just 73% occupied by 2016. And even though it was operating at a 22% margin on approximately $3 million of revenues, the community was placed under receivership and slotted for sale. The new owner plans to invest in capital and cosmetic improvements, as well as convert some employee apartments to senior living units. Matthew Alley, Jeff Binder and Jason Punzel of Senior Living Investment Brokerage represented the... Read More »A New Horizon?
Michigan has been in the news a lot lately as the home of political upsets and recounts. But it’s also the home of Mike Garbers and Cody Tremper’s (of Greystone Real Estate Advisors) latest transaction. The duo represented a publicly traded REIT in the sale of its 298-unit independent living community in Southfield, Michigan to a private equity firm. Built in 1998 on seven acres, the Brookdale Senior Living-operated community features a host of amenities, including a greenhouse, gazebo, library, restaurant-style dining and a beauty/barber shop, but it has significant capex needs. That perhaps explains the relatively low purchase price of $12.5 million, or about $42,000 per unit. For some... Read More »Purchase from Pardoll
The tenant of a 64-bed skilled nursing facility in Jackson, Tennessee made the move to acquire the building from another private individual, at a cost of $3.25 million, or $50,781 per bed. Built in 1955 with an addition in 1989, this facility was 87% occupied and operated at a 14% margin with Grace Management in charge of day-to-day operations. Mike Pardoll of Marcus & Millichap handled the transaction. Read More »Priority portfolio
CareTrust REIT picked up a portfolio of skilled nursing facilities in the Dallas-Fort Worth area, adding a new tenant relationship in the process. Priority Management Group will take over operations, under a master lease agreement with CareTrust, at four recently built (or recently renovated) skilled nursing facilities that total 540 skilled nursing beds and 28 assisted living units. The portfolio is expected to generate first-year annual cash rent of $8.6 million, resulting in an initial cash yield of 8.9% on the $95.9 million, or $168,838 per bed, purchase price. We should note that the average price per bed for skilled nursing facilities in the four quarters ended September 30, 2016 is... Read More »Bensalem Blues
There is some work to be done for the new owner of an entrance-fee CCRC in Bensalem, Pennsylvania. Juniper Communities (headed by CEO Lynne Katzmann) purchased the community for $13.65 million, or $38,343 per unit, which is well off its 2005 (yes, 2005) price of $17.35 million, or $48,464 per unit. Back then, the unit breakdown was very similar to today’s, which is currently 279 independent living units, 60 assisted living units and 17 skilled nursing beds. Plus it was operating at a 16% margin with a 95% occupancy rate. While the community’s current operations were not disclosed, we have to assume they have fallen off some given the 21% decline in price. Built in 1981 with expansions in... Read More »
HHS and CMS Appointments
It could be a turbulent year for SNF valuations in 2017. After the election….that one….we thought we might be in for a wild ride with the unpredictable Donald Trump taking over. Healthcare M&A, which had slowed down a bit this year, seemed to be picking up, and interest in our products spiked after the election, which is always a telltale sign. But with yesterday’s announcements of the new heads of HHS and CMS, the ride could get a little wilder. By naming Tom Price to run Health and Human Services, one of the more anti-ObamaCare members of Congress and a physician to boot, you know what is going to happen. And apparently, he has been opposed to the rush to value-based Medicare... Read More »Schedule a demo
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