A class of its own
A former school building in Liberty, Missouri, that converted to residential care-II (effectively low-acuity assisted living) sold to a growing skilled nursing operator and large mental health operator in the Midwest, with the help of Patrick Byrne of Senior Living Investment Brokerage. The building was originally built in 1962, and after it was licensed for RCF-II, it also provided mental health services for a younger population. Amenities like a basketball court and plenty of common space better equipped it to care for younger residents, and as many mental health facilities in the state closed, its census steadily increased. While the building features 206 beds, its functional capacity... Read More »BMO closes over $80 million
Two active investors in the seniors housing M&A market worked with BMO Harris Bank’s Commercial Real Estate Healthcare group to close acquisition financing for two of their latest purchases. First up, Kayne Anderson received $34.6 million in financing to acquire and expand a 135-unit senior living community in Melbourne, Florida. The property was built in 2012 to feature 47 independent living, 54 assisted living and 34 memory care units. It was 97% occupied, and sold for $45.5 million, or $337,037 per unit. And second, BMO closed over $40 million of acquisition financing for ROC Seniors Housing Fund Manager to acquire two just-built assisted living/memory care communities in New York.... Read More »
Bed Sores and Advertising
Law firm advertising may be hitting a new low. I like to watch the news when I eat breakfast, and I must say, Brookdale Senior Living has been bombarding the airwaves with their folksy ads with real employees. Every morning, at least one ad. But the past two mornings, I had the unpleasant experience of seeing a completely different sort of ad, and something I had only seen in Florida over the years. It was for a law firm, and it was asking whether you or a loved one had experienced any number of problems at a skilled nursing facility. An unexplained fall, bruising or weight loss? The worst of it was the phone number they wanted you to call. It was 1-800-bed-sore. Really? Bed sore? I know... Read More »
CommuniCare grows
CommuniCare Health Services is growing its portfolio yet again, purchasing nine skilled nursing facilities in Ohio and Maryland, after earlier this year acquiring six Maryland facilities and one in West Virginia. The seller was a publicly traded REIT. To finance the acquisition, Capital One served as sole lead arranger and administrative agent for a $61 million syndicated term loan and a $12 million syndicated revolving credit facility to affiliates of CommuniCare. The company seems to be priming itself to grow in the next year, as it received also in June a $13.7 million loan secured by the cash flow of seven of its skilled nursing facilities (and originated by Craig Casagrande of Capital... Read More »The price of empty beds
Not surprisingly, buyers generally pay more for an already stabilized facility, but did the rise in high-acuity sub-acute/transitional care, which can often still be profitable despite an occupancy in the low-80s, lead to a price increase in what we call “non-stabilized” facilities (defined as having an occupancy under 85%)? Well, not in the skilled nursing market. Stabilized facilities saw a slight increase year-over-year, from $94,100 per bed in 2014 to $96,500 per bed in 2015. However, we saw a decrease in the average per-bed price for non-stabilized facilities, from $63,900 in 2014 to $54,300 in 2015. So, the spread between stabilized and non-stabilized grew from $30,200 in 2014 to... Read More »
Build or buy…or both
Employing a two-pronged growth strategy, The MacIntosh Company is adding its sixth and seventh properties though both acquisition and development opportunities. First, the company acquired a 100-bed skilled nursing facility in Columbus for an undisclosed price. Built in 1984, the facility had been under family ownership since 1992 and featured separate wings for Alzheimer’s care and hospice services. Plus, there is additional land included within the purchase for future expansion projects. Chad Elliott and Steve Kennedy of Lancaster Pollard’s M&A group served as the sell-side advisor on the sale, while Chris Mauger and Brendan Healy of Lancaster Pollard Finance Company led the way in... Read More »CCRC in the Sooner State
A CCRC in Stillwater, Oklahoma is full steam ahead, having just received approximately $111 million in tax-exempt fixed-rate bond financing from Ziegler. The project has been 20 years in the making in the local community, which is home to Oklahoma State University and many of its retired faculty, staff and alumni. Located on 55 acres, the 380,000-square foot building will feature 114 independent living units, 23 IL villas, 48 assisted living units, 20 memory care units and 40 skilled nursing beds. Sponsored by Epworth Living, it broke ground in the summer of 2015, and was already 70% presold at the time of pricing the bond issuance. The Series 2016 bonds will be used to fund the... Read More »
A couple more closings for Cambridge
A month after refinancing two skilled nursing facilities in the Chicago area owned and operated by Alden Management Services, Cambridge Realty Capital Companies did it again, but for two other facilities. The first, a 217-bed facility in Hoffman Estates, Illinois, received a $9.155 million HUD loan with a 29-3/4-year term. A 207-bed facility in Bloomingdale, Illinois was the second, and received an $8.35 million HUD loan with the same 29-3/4-year term. Cambridge Realty Capital Ltd. underwrote both transactions. Read More »Buyers pass on premium pricing
We discussed earlier this week the two different assisted living markets, separated by “A” and “B” properties, but the difference was even starker in the independent living market. In 2014, a record year by all accounts for independent living, “A” properties sold on average for $277,900 per unit (boosted by a number of very high quality communities), while “B” properties averaged $155,200 per unit, a difference of $122,700. In 2015, the difference jumped to $170,400, with “A” properties selling on average for $243,300 per unit and “B” properties for just $72,900 per unit, which is low even compared to 2013’s average of $99,600 per unit. What accounted for this shift? In 2014, investors... Read More »
Buying and Selling CCRCs and IL Communities
Independent living is riding high and CCRCs have successfully emerged from the Great Recession. We know the independent living acquisition market has been hot, setting records in the past two years. And we know that occupancy levels are among the highest in the seniors housing sector, perhaps because there has not been a lot of new IL development, as least compared with assisted living and memory care. But CCRCs, or Life Plan Communities as some people would prefer to call them, have been making a strong comeback from the Great Recession and housing crisis. Who is buying these CCRCs and how are they valuing them? And how is the acquisition of a CCRC different from that of an independent... Read More »Schedule a demo
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