HFF in Port St. Lucie
We wrote earlier this week of Watercrest Senior Living Group’s latest development activity, with more than $80 million in its immediate pipeline across the state of Florida. Its largest project, a 128-unit senior living community in Port St. Lucie set to open in the fall of 2017, recently received construction financing with the help of Holliday Fenoglio Fowler, L.P. (HFF). The $32 million, or $250,000 per unit, development should feature 102 assisted living and 26 memory care units on its 5.3-acre campus located about 50 miles north of West Palm Beach. HFF arranged $11.15 million in joint venture equity capital from a third party, in addition to securing a $21 million construction loan... Read More »
Seattle calls, again
Washington D.C.-based Capitol Seniors Housing has been quite active in Washington State, announcing its fourth acquisition there in less than a year. The private equity firm acquired some 368 units of assisted and independent living across four communities located in the Seattle area. These properties were built from 1989 to 2005, with various additions in that time, and Capitol Seniors Housing plans to make significant capital investments at the communities while converting a number of units to assisted living and memory care. MBK Senior Living will manage. The purchase price came to $78 million, or $211,957 per unit, and Jason Punzel of Senior Living Investment Brokerage handled the... Read More »Summer of the Big Deal
We had been talking about how 2016 was the “year of the small deal,” with near-record transaction levels but few mega deals. That changed at the end of July and certainly at the start of August, when several large deals were announced. Welltower caused the biggest stir in acquiring 19 seniors housing properties operated by Vintage Senior Living for a total of $1.15 billion, making it the largest long-term care transaction in 2016 by more than double (Welltower’s February acquisition of the Aston Gardens portfolio for $569 million came in second). The portfolio, which includes independent living, assisted living and memory care, is concentrated in high income markets in Southern and... Read More »Blueprint heats up
There’s no such thing as a summer lull for Blueprint Healthcare Real Estate Advisors, as the firm closed five transactions (two seniors housing and three skilled nursing) in the past month. First up, Chris Hyldahl, with Gideon Orion supporting, sold a California skilled nursing facility that could certainly add in value. Built in 1963 with an addition in 1970, the building consists of 3 private rooms, 15 two-bedroom units and 22 three-bed wards, for a total of 99 beds, only 95 of which are operational. The facility currently operates at just a 4% margin on approximately $5.7 million of revenues, with an occupancy rate of 88% and a quality mix of 20%. So this transaction represents a good... Read More »
Greystone goes to Freddie Mac
Greystone provided more than $49.4 million in Freddie Mac loans to refinance two assisted living/memory care communities in Carmichael, California and Denver, Colorado. First, Oakmont Senior Living received a $25.15 million loan, with a 10-year fixed rate and 30-year amortization, for its newly constructed 71-unit AL/MC community in Carmichael. Then, Spectrum Retirement Communities obtained a $24.25 million loan to refinance its 97-unit AL/MC community in Denver. The Freddie Mac Capital Markets Execution loan carried a seven-year term and three years of interest-only. Scott Kavel and Cary Tremper led the way for Greystone on these transactions. Also from Greystone, Mike Garbers and Cody... Read More »What’s new with Watercrest
Watercrest Senior Living Group is unveiling its new concept in memory care, called Market Street Memory Care Residences, at a site currently under construction in Viera, Florida. The 47,000-square foot, 60-unit community is set to open in the fall of 2016, with two more 64-unit communities under the same concept opening in 2017 in Palm Coast and Tampa. The buildings are estimated to cost between $16 million and $17 million, or approximately $266,000 per unit, to develop. Financing has already been arranged for the Viera and Tampa properties, with EB-5 equity and commercial bank construction loans (Bank of Texas is providing the Viera one). As for Watercrest’s other projects, things are... Read More »
Big news from Brookdale
The “big” news in the seniors housing market was the announcement at the end of July that Brookdale Senior Living (NYSE: BKD) had entered into an agreement to sell 44 properties with 1,874 assisted living and 579 memory care units located in 12 states. The price is about $252.4 million, which comes to $102,900 per unit. Brookdale had previously announced plans to sell between 50 and 100 properties, and with this deal they are well on their way to accomplishing this goal. Since they would not be selling their best performing assets, it makes sense that the pricing would be well below the 2015 average price of $189,200 per unit, but it was also well below the lower quartile price of $141,000... Read More »Capital Funding’s closings
Capital Funding Group closed a couple of transactions recently for SNFs up and down the East Coast. Starting in New York, the lender provided a $19.1 million bridge-to-HUD loan for a borrower to acquire a 167-bed skilled nursing facility. The loan covered over 90% of the $20.87 million, or $125,000 per bed, purchase price. Craig Casagrande originated the transaction, which was funded through a combination of senior and mezzanine debt and included a turnaround component based on projected improvements to the facility’s performance. Plus, Chip Woelper originated a $3 million working capital loan for the borrower to finance operations. In a separate transaction, Capital Funding served as sole... Read More »King Cash
When it comes to value, it all comes down to cash flow. For the fourth year in a row, according to the 21st Edition of The Senior Care Acquisition Report, there has been a record level of net operating income per bed purchased in the skilled nursing market. This has been the primary driver of the steady rise in the average price per bed since 2011. At the last market peak in 2007, the average NOI per bed sold was $6,700 and the average price per bed was $55,200. From 2007 until 2015, the average NOI grew to $9,600 per bed, for an increase of 43%, while the average price per bed increased to $85,900, representing a 55% increase. Most nursing facilities have been trying to increase their... Read More »
Five Star and Senior Star… Again
Oh boy, here we go again. Bill and Bob Thomas have sent another letter to shareholders of Five Star Quality Care, of which they own about 3.4 million shares, or 6.8% of the company. As shareholders, they are glad that management realized that they had some valuable assets, the full value of which is not reflected in the share value. It rarely is. But, as we pointed out a few months ago when Five Star sold a few assets for a big price, and a big gain, with seven properties worth more than the market cap of the entire company, they are also subjecting themselves to a big lease payment liability, which will cut into cash flow. As shareholders, this is not making the Thomas brothers happy.... Read More »Schedule a demo
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