MidCap acquires HUD lender Pineview
With HUD transaction volume expected to rise in the senior care industry, following the recent debt-seasoning requirement (among other) changes, it’s no wonder MidCap Financial wants to establish a presence there in acquiring Pineview Capital Group, an experienced Denver-based HUD lender. With the benefit of its balance sheet, MidCap already boasts an array of services, including life sciences loans, first mortgage financing and mezzanine debt, ranging in size from $5 million to $100 million. This is also an opportunity to expand Pineview’s lending capabilities to a larger client base. The goal of the transaction is for both teams to become the single point of contact for borrowers through... Read More »
The two Assisted Living markets
We first separated out the “A” properties from the “B” properties in 2012, based on the properties’ age, size and location. While there will likely be some “A” communities mixed in with the “B” communities (and the other way around), it all evens out. And when looking at the numbers, these are clearly two different markets. In 2015, “A” properties sold for an average of $248,500 per unit, while “B” properties sold for an average of $138,300 per unit, a difference of $110,200. That means that “A” properties were worth almost double the value of “B” properties. The previous year (2014) the difference was amplified even more. “A” properties in 2014 sold for an average of $244,800 per unit and... Read More »
Blueprint in Brookings
The team at Blueprint Healthcare Real Estate Advisors, including Ben Firestone, Jacob Gehl and Trent Gherardini, worked on behalf of a national owner-operator to strategically divest one of its non-core assets. The property being sold is a 36-unit assisted living community in the coastal town of Brookings, Oregon (near the California border). Built 20 years ago, the all-private pay community was struggling a bit with census but could probably benefit from a little more attention, which should come from its new owner, an Oregon-based regional operator/developer familiar with the local market. The buyer also plans on converting the community to higher levels of care, including memory care... Read More »
Green Court buys Arbour Square
A fund sponsored by Green Courte Partners bought Arbour Square of Harleysville, a 276-unit independent living community located about 35 miles north of downtown Philadelphia. The first phase of the property was built in the affluent, high barrier-to-entry market in 2006 (with 151 units), while the remaining 125 units were added in 2014. The newest units were already coming out of lease-up by the time acquisition financing was originated for Green Courte. Through Freddie Mac’s seller servicer direct lending program, Aron Will of CBRE secured a $39.9 million fixed-rate loan with a 10-year term and 72 months of interest-only payments. Heritage Senior Living stayed on to operate the... Read More »
Dialed in
Mark Myers, Joshua Jandris, and Matthew Andriano of Marcus & Millichap arranged the sale of a 188-unit senior living community in Crest Hill, Illinois, about 40 miles southwest of Chicago. The property, consisting of 112 assisted living/memory care units and 76 independent living units, was acquired by a joint venture between Dial Retirement Communities and a private equity fund. The sellers were two entities controlled by Greg and Renee Wolf, a couple who had developed the facility over the past 15 years. Dial will take over operations and add new programming in the process. The purchase price was not disclosed. Read More »
Controversy Among The REITs
Opinions and controversy are all part of the game, but sometimes it can go too far. Some people think I speak my mind a little too frequently, but after 30 years in the seniors housing and care sector, it is hard not to have a lot of opinions. I have always thought that with so much news out there, and so much rehashed news, people want to hear what someone really thinks. It may not be popular, but if it based on experience and a lot of thought, well, then maybe it is worth something. Controversial? Sometimes, at least I hope so. But perhaps not as controversial as the current spat among some healthcare REITs about their decisions to spin off their skilled nursing portfolios, or not. For... Read More »
Five years on…
A 94-unit senior living community in Covington, Louisiana changed hands five years after its last sale, more than doubling in value in the time. Granted, the community added a 24-unit memory care wing in 2014, which helped push the value. Nevertheless, after purchasing the community for $11 million, or $142,857 per unit, Arcadia Communities brought occupancy up from 91% to 99% in five years (even with the expansion) and nearly doubled the EBITDA. Now, the regional operator is selling the community to a national private equity firm for $22.2 million, or $236,170 per unit, with a 7% cap rate. Evans Senior Investments handled the transaction. Read More »
Garbers of Greystone
With some of the largest units in the region, a 211-unit assisted living/memory care community in Bedford, Ohio sold to Pritok Capital for $6.5 million, or $30,805 per unit. The community was not purpose-built for assisted living, which caused some operational challenges and thus resulted in a lower price. But, the 198 AL units average 564 square feet and the 13 MC units average 664 square feet (on the high side for the region). The community was built in 1988 and sits on 20 acres in the Cleveland area. Mike Garbers of Greystone Real Estate Advisors represented the seller, a public healthcare REIT, in the transaction, for which Joel Gordon of MB Financial served as lender. Read More »Bucking the trend
Certainly one of the oddities of the over 70 statistics we provide in The Senior Care Acquisition Report was the relationship between the seniors housing (independent living, assisted living and memory care) cap rate and the 10-year treasury rate. One would expect that in a strong economy, the seniors housing cap rate would fall, while the 10-year treasury rate would rise, making the spread between the two smaller, and vice versa for a weak economy. However, as the seniors housing market has improved and cap rates have accordingly dropped from 7.7% in 2014 to 7.6% in 2015, the average 10-year treasury rate fell 40 basis points to 2.1%. The spread between the two rates thus increased from... Read More »
Pay up for profit potential
For the first time in five years, there wasn’t a perfect correlation between the average cap rate and the average price per unit in seniors housing (which includes independent living, assisted living and memory care), but it was close, according to the 21st Edition of The Senior Care Acquisition Report. This was an interesting year, however, where we saw a decrease in the average price paid per unit, and a decrease in the average cap rate. Accordingly, there were some interesting results. First, the two lowest cap rates both experienced decreases in their average price paid per unit (from $310,000 to $242,000 for 6% and $222,000 to $186,800 for 7%). Then there was an increase in the... Read More »Schedule a demo
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