Minnesota SNF/ALF
In another sale involving skilled nursing beds and assisted living, Ray Giannini of Marcus & Millichap sold a nursing facility in Duluth, Minnesota for $10.0 million, or about $53,000 per bed. Occupancy was solid and there were more than 180 total beds involved in the sale. Read More »
California SNF/ALF Sells
Krone Weidler of Weidler Integrated Healthcare Investment Properties, in affiliation with Marcus & Millichap, sold a skilled nursing and assisted living facility in California to a local private equity investor. Built in 1991, the property has 120 skilled nursing beds and 85 assisted living beds with occupancy that has been around 94%. The sales price was $15.6 million, or $76,100 per bed, and the buyer may have to turn the operations around a bit. Read More »
Opportunity Comes Knocking
Ken Carriero and Damien Carriero of Colliers International’s National Seniors Housing Group recently sold an 88-unit assisted living community in Florida for $4.25 million, or $48,300 per unit. The community was built in 1987 and is licensed for 135 beds. In the past, occupancy had been stabilized at just under 90%, but had declined to 46% as a result of the seller’s illness. The cap rate came in at 7.7%, and we are sure that the buyer, New York-based Center Management Group, will be able to ramp up occupancy again. Read More »Better in the long-run
Private equity group Valstone Partners is not looking back with the sale of its 42-unit assisted living/memory care community in Newport, Tennessee, barely a half year after acquiring the community as part of a portfolio transaction in December 2015. Built in 2000, the Brookdale Senior Living-operated community features 32 assisted living and 10 memory care units. It was operating decently with a 20% margin on approximately $1.62 million of revenues, with a 95% occupancy. But, the community’s size and location (rural eastern Tennessee) did not align with Valstone’s long-term strategy, prompting the sale. Mainstay Financial Group, a growing regional owner/operator, paid $3.9 million, or... Read More »
Pillar and Petersen
One of the largest owners and operators of skilled nursing facilities in Illinois, Petersen Health Care, recently went to Pillar, affiliated with Guggenheim Partners, to refinance three of its properties in the state. Evan Hom, Managing Director of Pillar’s New York office, originated a $5.44 million HUD refinance for an 90-bed facility in South Elgin, $2.28 million for a 77-bed facility in Jonesboro, and $2.16 million for a 62-bed facility in Macomb. All of the properties were built from 1967 to 1970, were well occupied at the time, and received fixed-rate, 30-year loans. Read More »Three more Popular closings
Popular Community Bank, a subsidiary of Popular, Inc. (NASDAQ: BPOP), was busy this month, closing a couple of term loans along with five separate credit facilities. Ken Mitchell, who leads the National Healthcare Financing Division of Popular, closed both an $18 million loan and a $13 million loan for Grand Healthcare System to exercise purchase options on a 179-bed skilled nursing facility in Queens, New York and a 122-bed skilled nursing facility in the Hudson Valley area of New York. Grand had been operating the facilities since 2014, both of which occupancy above 95% and strong quality mixes. Plus, the Queens facility recently opened a 14-bed unit to serve stroke patients. As for the... Read More »
Valuations Remain High Across Senior Care Spectrum
Average prices for the four quarters ended June 30 dipped a little but most remain higher than calendar year 2015. Cap rates are slowly rising. Earlier this month, we reported that the seniors housing and care M&A market, based on the number of transactions announced in the second quarter, as well as the first six months of 2016, was ahead of last year, but not by a large margin. It was the dollar amount of those transactions, however, that has declined because of the dearth of the large sales. Now we have come out with our rolling four quarters data, and the results are not surprising. The conclusion is that based on valuations, the market remains relatively strong. In the skilled... Read More »Lower Expenses, Higher Prices
One would assume that as a skilled nursing facility’s profitability increased, so should its price. And that was indeed the case in 2015, with a perfect correlation between the average price per bed and the expense rate. Facilities with an expense ratio of 90% and over sold in 2015 for an average of $46,000 per bed, while those with expense ratios between 85% and 89% sold for $75,000 per bed on average. The high end of the market, meaning those facilities with expense ratios under 85%, not surprisingly sold for the highest price, averaging $128,100 per bed in 2015. Clearly, well-operating skilled nursing facilities are very attractive to investors in search of a high return, at least when... Read More »LTC Expands with Thrive
LTC Properties (NYSE: LTC) expanded its relationship with Thrive Senior Living, acquiring and then leasing another property to the Atlanta-based operator for $14.3 million, or $204,286 per unit. Receiving its Certificate of Occupancy in May 2016, the community in Athens, Georgia was actually developed by a joint venture between Thrive, Paragon Real Estate and Summit Healthcare REIT. It features 50 assisted living and 20 memory care all-private pay units, and was added to an existing master lease agreement at an initial incremental yield of 8.0%. This expands LTC’s relationship with Thrive to three communities, with two additional development projects expected to open by the end of... Read More »
Two year turnover for CNL
Following up on Five Star Quality Care’s (NYSE: FVE) sale of seven of its 33 owned senior living communities for $112.4 million, the company put some of those funds to work in acquiring a 163-unit senior living community in Vestavia Hills, Alabama. Built in 1994 with an addition in 1997, the community has 90 independent living, 49 assisted living and 24 memory care units. The seller, CNL Lifestyle Properties, bought the property in January 2014 for $18.5 million, or $113,500 per unit, and then leased it back to an affiliate of Solomon Senior Living and Trinity Lifestyles Management. But Five Star will take over operations, in addition to changing the community’s name to Morningside... Read More »Schedule a demo
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