The cost of opportunity
A regional owner/operator in California saw a value-add opportunity when it acquired a 119-unit assisted living/memory care community owned by a large real estate investment company in San Bernadino County. Built over 25 years ago, the community was just 67% occupied at the time of closing. It sold for $15.5 million, or $130,252 per unit, which is about $68,000 less than the average price for assisted living communities in the four quarters ended September 30, 2016, and probably even lower than the average price for California properties. So there is certainly an opportunity to add value, but the work has to be done. Jim Hazzard and Nick Stahler of The JCH Group handled the... Read More »
Kindred Healthcare Plunges
Exiting the SNF business, Kindred’s decision is just part of a national transformation of the sector that started a year ago. And I thought last week was a tough one. When Kindred Healthcare released its third quarter earnings on Monday night, I knew it would open significantly down, but 33% down? The company has decided to exit the skilled nursing sector – sound familiar? This was a bit surprising because even though they had already gone from 300 SNFs to around 92 today, I assumed the remaining facilities were the best ones, and in the markets close to its LTACs, rehab hospitals and home health services. That was the entire theory around being the post-acute provider of choice in... Read More »
Detroit Dealmaking
Green Courte Partners, a Chicago-based private equity firm, has been one active acquirer in the independent living market, when few other buyers have been investing in the sector. Even though the IL market has been a huge factor in pushing average seniors housing prices to record-highs average (peaking at an average of $248,300 per unit in the four quarters ended March 31, 2016), its share of M&A has been shrinking in the last couple of years. Nevertheless, Green Courte has acquired five IL properties in the last year. Its most recent transaction involved a portfolio of three IL communities located in the Detroit MSA, which it purchased for an undisclosed price. All totaling 371 units,... Read More »
Insured success
Fortegra Financial Corporation, an affiliate of Tiptree Financial Inc., is a specialized insurance and insurance services company that is dipping its toes in the seniors housing market. That is not to say Tiptree is a debutante to the industry, with its wholly owned subsidiary Care Investment Trust making five acquisitions for 17 properties since 2013. For Fortegra, the company is acquiring a 77-unit senior living community with independent/assisted living and memory care services in Baton Rouge, Louisiana. The stabilized property was owned by a regional operator which is exiting the industry with this sale. Fortegra is paying $11.5 million, or $149,351 per unit, for the community and is... Read More »2016 HUD Rankings
We reported a few weeks ago that Lancaster Pollard was the most active HUD 232 LEAN lender with 60 transactions with a total value of $554.4 million, but KeyBank was close behind at 54 loans worth $521.8 million. In third place was Housing & Healthcare Finance with 28 deals and $355.9 million. HHC also closed the largest loan of the fiscal year, an $80.7 million loan on a 520-bed skilled nursing facility in New York. Berkadia Commercial Mortgage came next with 26 deals worth $180.5 million and Capital Funding followed them with 21 financings worth $261.0 million, including the second-largest closing of the year: a $43.4 million loan for a 314-bed skilled nursing facility in New York.... Read More »
Blueprint’s Mass of deals
Continuing Blueprint Healthcare Real Estate Advisors’ active 2016, Steve Thomes and Chris Hyldahl were the lead advisors in the sale of a 123-bed skilled nursing facility in New Bedford, Massachusetts, owned by a New York-based national owner, for $4 million, or $32,520 per bed. Occupancy could be improved from 79%, but that will be the job of a regional owner/operator with a significant presence in eastern Massachusetts. But wait, there’s more…in Massachusetts. Mr. Thomes, with the assistance of Michael Segal and Ben Firestone, sold an 87-bed skilled nursing facility to a regional owner/operator that is growing its Massachusetts portfolio. Really operating at 78 beds, the facility was 83%... Read More »A RED refinance
RED Capital Group worked with Kensington Senior Living to refinance its 75-unit assisted living/memory care in the high-barrier to entry market of Los Angeles County. The community opened in 2014 and leased up not long after that. RED originally arranged a balance sheet construction loan, which was paid off with the current $29 million Fannie Mae refinance. Read More »HHC’s bridge to success
Since its launch in the Fall of 2015, Housing & Healthcare Finance’s (HHC) bridge lending program has brought in a lot of business so far in the last year, with the lender brokering 13 transactions and over $250 million in loan volume. Included in those closings were mostly skilled nursing facilities, except for a 183-unit CCRC in Cincinnati, Ohio, a SNF/assisted living community in Sacramento, and a SNF/ALF portfolio in Arkansas. The largest transaction totaled $60 million, while the smallest was approximately $4.2 million. Apart from brokering these transactions, HHC also provides bridge loans through its partner, Congressional Bank. The program is led by Isaac Haas and Neil Gamss,... Read More »
Brookdale Senior Living Disappoints Again
Brookdale Senior Living’s stock price plunged 20% on disappointing third quarter news….and forecasts. My, my, my. Brookdale Senior Living just doesn’t seem to be able to get a break. Despite having a 40 basis point increase in same-community occupancy from the second quarter, which beat the market as a whole, problems continue. They are seeing new properties having a big impact on their secondary market properties, they revised downward full year 2016 forecasts, former employees are soliciting staff and customer leads, and Dan Decker has decided to become even more involved, becoming Executive Chairman as opposed to Chairman of the Board. On top of all of this, they are forming... Read More »Blackstone and Brookdale
The beginning of November brought with it a lot of big news. Sorting through the mess that was the Brookdale Senior Living earnings announcement, which caused quite the buzz in the industry, we also noted the year’s second-largest transaction was announced. Private equity firm Blackstone Real Estate Partners is acquiring 64 Brookdale-operated seniors housing properties from HCP, Inc. for $1.125 billion, or about $188,500 per unit. That was for 100% of the ownership, but Brookdale will pay Blackstone $170 million for a 15% ownership interest in the joint venture, in addition to operating the portfolio on behalf of the joint venture. Occupancy across the portfolio averaged 85%, and the... Read More »Schedule a demo
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