September’s top HUD lender
Our top HUD lender of the month was Housing & Healthcare Finance (HHC Finance), with over $120 million of closings in September alone. Included in that total were five 232/223(f) refinances: a $27 million loan for a 195-unit assisted living community in Yonkers, New York, $33 million to refinance a 332-bed skilled nursing facility in Philadelphia, a $6 million loan for a 120-bed skilled nursing facility in New Jersey (New York City MSA), $3.8 million for an 84-bed skilled nursing facility in South Carolina and a $6.2 million refinance of a 67-bed skilled nursing facility in central New Jersey. In addition, HHC Finance closed $46 million of rate modifications for two existing... Read More »
Green House Sale
Brad Clousing of Senior Living Investment Brokerage sold a type of skilled nursing campus that does not come on the market very often. Typical of the Green House configuration, the campus consists of 12 separate cottages with 12 private rooms in each cottage, making for a more home-like environment. Occupancy was at 90%, but the property, located in Greer, South Carolina was operating at a loss on $15.2 million of revenues. The seller was a not-for-profit hospital system, and the price was $10.1 million, or $70,100 per bed, reflecting the age (under 10 years) the cash flow potential. Read More »
A Popular transaction
Popular Community Bank, a subsidiary of Popular, Inc. (NASDAQ: BPOP), provided financing to assist Centers Health Care in acquiring a formerly struggling 405-bed skilled nursing facility in Bronx, New York. Centers had been operating the facility under receivership since 2013, when it was losing money under not-for-profit ownership. Now the facility is profitable, and Centers added a new 70-bed New York State Assisted Living Program unit, which is eligible for Medicaid reimbursement. To fund the acquisition, Andrew Boland of Popular closed a $46.6 million acquisition mortgage and a $5 million leasehold improvement line of credit. Read More »CMS rules against SNFs
The skilled nursing sector does not need any more bad news, but it received some this week. The Centers for Medicare and Medicaid has issued a new rule that will prohibit SNFs that receive Medicare or Medicaid payments (so that would be the overwhelming majority) from requiring residents to resolve any disputes through a formal arbitration process as opposed to the court system. Obviously, the trial lawyers are celebrating because arbitration usually is less costly for providers, not to mention it is a faster process. Patient rights advocates prefer the judicial system because they want poor quality of care exposed for what it is, and they also believe patients are not properly compensated... Read More »
Recapitalizing with KeyBank
Grant Saunders, Sarah Belmont and Charlie Shoop of KeyBank Real Estate Capital all went to work to recapitalize a portfolio of eight seniors housing and care properties owned by Sentio Healthcare Properties, Inc. First, Saunders and Belmont helped the Orlando-based public, non-traded REIT refinance five of its properties, located in Texas, Florida, New Jersey and Louisiana, with a $62 million balance sheet term loan from KeyBank. Those properties are a combination of independent living, assisted living, memory care and skilled nursing facilities. As for the three remaining properties (assisted living and memory care communities) located in Ohio, Maryland and Florida, Mr. Shoop arranged... Read More »Capital Funding Locks in Acquisition Financing
We know how long skilled nursing acquisitions can take in the state of New York. That didn’t stop Maximus Healthcare LLC from acquiring Briody’s Health Care, an 82-bed skilled nursing facility in Lockport, New York (just outside of Rochester). It was first announced back in May 2015 that Maximus intended to acquire the facility, which had been owned by the Briody family for three generations. But the family’s presence at the facility will still be felt, with the existing administrator, Ann Briody Petock, electing to stay on. To finance the acquisition, Craig Casagrande of Capital Funding Group originated a $6.683 million bridge loan. Maximus also has plans to modernize the facility’s... Read More »A new public REIT
We have a new publicly traded healthcare REIT. MedEquities Realty Trust priced its 19.9 million share IPO at $12.00 per share, which was at the low end of the potential range of $12.00 to $14.00 per share. It opened at a slight discount of $11.50 per share yesterday in a day that the overall market tanked. The company invests in skilled nursing facilities, hospitals, LTACs and other healthcare real estate properties. It may be small now, but we are sure it will be out there scouting new acquisitions. The new shareholders are counting on it. FBR, J.P. Morgan, Citigroup, KeyBanc Capital Markets, Raymond James and RBC Capital Markets served as joint book-running managers Read More »
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 »Schedule a demo
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