Shutting down SNFs
In an unusual move, a large California owner has asked the state to allow it to close three of his SNFs in one county. My friend Steve Moran had an interesting blog post yesterday about the largest skilled nursing facility owner in California. Apparently, he owns five of the six nursing facilities in a somewhat remote county, and has asked the state for permission to close three of them in Eureka. Now, it could be a ploy to receive higher reimbursement at these Medicaid facilities, as there has been a public outcry to not close them. But with 75% occupancy, and staffing shortages so bad that he has to import temporary staff from out of the area, it would be difficult for anyone to cover... Read More »Expanding Through Decreased Acuity
An acute-care operator based in New York is not only expanding its geographic reach, but also its acuity offerings. The company already owns several post-acute/senior care assets in New York, but is launching into the Midwest with the acquisition of a 200+-unit/bed senior care campus in the Toledo, Ohio area for an undisclosed price. Built in many stages from 1963 to 2006, the property mainly consists of skilled nursing beds, with a significant number of long-term acute care (LTAC) beds, as well as assisted living and independent living units. For over 30 years, a second-generation family member owned and operated the facilities, but they are leaving to focus on their existing assisted... Read More »
Build with HUD
The owner of a skilled nursing facility in Gibonsburg, Ohio is planning an addition to its 99-bed property, but also wanted to refinance its existing debt. So, they went to Cambridge Realty Capital Companies, which provided a $5.266 million HUD loan. That financing included both a six-month construction loan and a 34-1/2-year fully-amortizing permanent loan, with a blended interest rate. Read More »WMD’s in Williamsburg!
What would you pay for an empty assisted living/memory care community? What about a nearly-finished 48-unit memory care community in Williamsburg, Virginia whose previous owner filed for bankruptcy? Well, Jacksonville, Florida-based investment bank/brokerage firm WM Dougherty & Co. (WMD) purchased that unfinished site for $7.5 million, and has plans to invest another $2 million to finish the community. All in, the WMD will end up paying nearly $200,000 per unit for a brand-new, but empty, memory care community. That may seem high, given that according to the 2016 Senior Care Acquisition Report, assisted living/memory care communities sold on average for $207,400 per unit, compared with... Read More »
Setting Records in the Bronx
You almost never see a single senior care property sell for over $100 million. In fact, only two had ever been recorded with a higher price: a 423-unit/bed CCRC for $165 million in 2007, and a 499-bed skilled nursing facility for $105.5 million in 2015. Now, there is a third. Joshua Jandris, Charles Hilding and Mark Myers of Marcus & Millichap closed the sale of a 744-bed skilled nursing facility in Bronx, New York, for a whopping $110 million, or $147,850 per bed, making it the second-largest single-property sale (and the largest stand-alone skilled nursing facility sale) ever. Located on a 2.46-acre parcel, the facility is spread out among three connected buildings that were built in... Read More »Sacramento sale
A joint venture between Harbert Seniors Housing Fund I, LP, Aviva Investors Americas LLC, and Senior Resource Group, LLC, recently acquired an independent/assisted living portfolio of three communities in Sacramento, California. Consisting of 257 total units, the communities were 95% occupied and located in a high barrier-to-entry market. Two of the properties are adjacent to each other, creating a continuum of care campus. The local owner/operator seller transitioned management over to Senior Resource Group, which already operates 17 communities in the state. Read More »
Investor group expands in Michigan
The owner/operator of a senior living community in Saginaw, Michigan is set to open a second location next month in nearby Hampton Township, at a cost of $13 million, or around $185,000 per unit. Founded by K. Rumi Shahzad and a team of 19 local investor/doctors, the Saginaw community has already expanded to include a 60-unit independent living community, and has a $15 million addition planned for its assisted living portion. So there is an apparent need. The investor group’s move into Hampton Township seems to be well founded, with 40% of the AL/MC units already preleased. In addition, there are plans to add independent living. Monthly rents at the new community are on the high side,... Read More »
Reflections on NIC Conference
Change is coming, and while some people will be prepared for it, others will struggle. With a record turnout at last week’s NIC Conference, we wanted to see what the mood was, and whether there was any primary theme. The mood was decent, perhaps not as upbeat as in years past, but it really depended on whom you asked. The old-timers are a bit nervous, the newcomers more bullish. On the skilled nursing side, going from fee for service payments to bundled payments and ACOs is going to be more painful than many believe it will be, and could result in many small providers hanging it up and selling. It will not cause the value disruption that came after the PPS change to Medicare in the late... Read More »
An Affinity for HUD
Affinity Living Group’s latest acquisition of two senior living communities in North Carolina was met with more complications than usual. Already with a senior lender on board, Affinity had to find supplemental debt that not only satisfied their own requirements, but also those of the senior lender and of a future HUD refinance. So, HJ Sims provided a $2.475 million mezzanine loan under its “HUD Plus” program, which allows a borrower to leverage up to 92.5% of the market value of a project with HUD-approved secondary financing. Sims funded the subordinate loan by placing $2.475 million of corporate taxable bonds. The communities included a total of 176 assisted living units and 40 memory... Read More »
Leaving with Grace
While attending the NIC conference in Washington, D.C. last week, I learned that Gene and Mari Jo Grace of Grace Management are retiring after nearly 33 years in the seniors housing and care business. I have known them for most of that 33 years, and I feel like the industry is losing not only two very top-notch professionals, but two friends. The respect they command, and the friendship they have shown to so many over the years is unparalleled, not to mention the depth of their industry knowledge and history. They have seen it all. Two years ago, they sold their company to Chicago Pacific Founders (CPF) but continued on in their roles. In those two years, with the help of John Rijos and... Read More »Schedule a demo
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