Home Healthcare Is Not The Answer
Costs are rising everywhere, putting increased pressure on seniors’ choices. So, what’s happening in the home healthcare world? On the one hand, you have CMS cutting Medicare payments, with MedPAC suggesting the cuts should be even higher. In addition, wages rates are rising, and home care workers in Washington state have won a $16 per hour wage in the future. On the other hand, new home healthcare startups are raising a lot of money, including $42 million earlier this month by California-based Honor, which is expanding into Texas. And then we read about a small home health provider in California who decided to get into the seniors housing business because home health has become too... Read More »
The REIT Recovery
Back in mid-February, it looked as if the world of healthcare REITs had collapsed, with no end in sight. Almost every healthcare REIT hit a new low in a span of a few days, but it has been a vastly different story in the six months since then. The average healthcare REIT stock has jumped in price by about 50% since mid-February, with a range between 27% (Care Capital Properties) and 78% (Sabra Health Care REIT). While that means the higher-yielding REITs have dropped down from double-digit yields, the range of dividend yields is still a healthy range of 4.1% to 8.5% (at least for investors). Price pressure will certainly pop up again if the Fed does increase rates next month, but no one is... Read More »
Love in Carrollton
A new independent living community is being developed in Carrollton, Texas, with the help of a $26.3 million HUD construction loan arranged by the team at Love Funding. Sitting on 5.5 acres in the Dallas-Fort Worth area, this community will feature 183 apartments and five stand-alone cottages, as well as a clubhouse and other amenities. The 40,000-member Prestonwood Baptist Church is also located across the street, which should provide a boost to occupancy. Laura Saull-Smith of Love secured the financing, which came with a 40-year term. An ownership group is behind the development, which includes principals Charlie Nicholas, Luke Harry, Steven Rumsey and Chris Willhite. Read More »Minnetonka mania
Three seniors housing developments are breaking ground this summer in the Minnetonka, Minnesota area. First, United Properties started construction on its 100-unit community, which will include 72 independent/assisted living units, 22 memory care units and six care units. Then, Oppidan Investment Company and Minnesota-based not-for-profit Ebenezer announced the expected September groundbreaking of their newest community, a 136,000-square foot, 105-unit community that will feature independent living, assisted living and memory care. Finally, The Waters plans to break ground in nearby Excelsior on its new 110-unit independent living community by the end of the year. We will see how these... Read More »
Development for Denver joint venture
A joint venture between three different parties enlisted the help of Aron Will from CBRE to help finance a to-be-built senior living community in Denver, Colorado. Blue Moon Capital Partners, MGL Partners and Leisure Care are set to break ground in September on a 163-unit independent living, assisted living and memory care community located near the heart of the Denver Tech Center. Mr. Will secured a $28.7 million, non-recourse floating rate loan, with a six-year term and 48 months of interest only, provided by a regional bank. The community is set to open in Spring 2017. Read More »
Propero: Part Two
For those owner/operators that wish to grow their portfolio by development, but also limit the capital needed to get the project started, there is an unconventional option. Launched in 2012, Lancaster Pollard’s first Propero Fund invests in seniors housing properties as the sole owner and then triple-net leases them to an operator, which will then choose from a predetermined purchase option schedule when to acquire the community at a price based on Propero’s investment basis rather than the current fair market value. The success of the product means Lancaster Pollard has moved on to its second Propero fund, which approximately doubles the size of the first in terms of equity commitments.... Read More »
HJ Sims’ successful partnership
HJ Sims announced that it has co-invested $15 million its Merrill Gardens’ recently formed investment fund RDM V, LLC, which will be the third Merrill fund in which Sims has participated. RDM V will acquire and develop new seniors housing and multifamily properties, which Merrill Gardens and its affiliates will manage. It currently has investments in three seniors housing properties and one multifamily, but has four other seniors housing communities lined up as potential investments. To fund the initial capital call of its 19% interest in RDM V, Sims placed $9.375 million of taxable bonds, and has committed to raising the additional capital as required. Read More »
No Summer Vacation From Deal Flow
August used to be the month for vacations, but for some, not this year. August is supposed to be a sleepy month. But as soon as I left on a summer vacation, the biggest deal of the year was announced, and we had a series of uneven earnings reports from the few remaining public companies. The large acquisition by Welltower was a bit of a surprise because we thought that deal had died late last year. And it did, a few times. And with a sub-6% in-place cap rate with occupancy for the portfolio so low, Welltower is obviously counting on a change in management to spruce up the cash flow. Great locations yes, but we thought the Big Three were taking a break from the high-priced portfolios. I... Read More »Meridian primes Continuum for HUD
Continuum Healthcare has been busy growing its portfolio and is now looking for permanent financing for the six of its skilled nursing facilities in New Jersey and Pennsylvania they acquired over the last three years. In the meantime, Meridian Capital Group has arranged $135.5 million in bridge financing for the facilities. The loan came with a four-year term, six months interest-only, under 15% recourse, and was provided by a balance sheet and mezzanine lender. Ari Adlerstein, Ari Dobkin and Josh Simpson of Meridian handled the transaction, and expect to take out the bridge financing with a HUD refinance in two years. Built between 1979 and 1999, the skilled nursing portfolio features 920... Read More »
A team effort
We wrote in the August issue of The SeniorCare Investor of Birchwood Health Care Properties’ acquisition of four skilled nursing facilities and a hospice care and home health company in Oklahoma, and that HJ Sims had financed a $5.25 million subordinate loan to fund the deal. Now, RED Capital Partners has just announced that it closed a $12.7 million balance sheet acquisition loan for Birchwood’s take-over of the 361-bed portfolio. The transaction was unique, in that the ancillary home health and hospice business provided credit support for the bridge-to-HUD loan. Read More »Schedule a demo
Gain access to the best healthcare and long-term care investment intelligence, data, and analysis.
