A Punzel pair
Jason Punzel of Senior Living Investment Brokerage must be racking up airline miles, having crisscrossed the country to close a pair of deals on the West Coast then in the Heartland. In Oroville, California, Mr. Punzel sold a 36-unit memory care community, which was built in 2002 and underwent a renovation/expansion in 2008, for $5.95 million, or $165,278 per unit, with a 9.0% cap rate. There is an additional 2.5 acres available for expansion, but the local owner/operator seller was retiring from the business. Another local owner/operator, with two other facilities in the area, stepped in as the buyer. Mr. Punzel also sold two assisted living communities in South Dakota for $1.978 million,... Read More »
Welltower Building A Manhattan Tower
Welltower and Hines will be developing Welltower’s first urban high rise senior care community in Manhattan. I, for one, can’t wait to take a tour of Hines and Welltower’s high rise assisted living and memory care development right in the middle of midtown Manhattan. And while I’m at it, I could visit Maplewood Senior Living’s similar development a little more than a mile north on the Upper East side of Manhattan. The Welltower community will be 15 stories tall, which is unusual for seniors housing, but not for me. The CCRC I am most familiar with from personal experience has 25 stories and is located in Florida in a considerably less urban environment. Height was never an issue,... Read More »
Walker & Dunlop & HUD
With the recent changes to HUD’s LEAN program, we wondered how long it would take to see a real impact on transaction volume with the agency. Well, Walker & Dunlop may not have closed an actual HUD transaction, but it did position itself well to do so in the future. For approximately $45 million, the company acquired the commercial mortgage servicing rights associated with a $3.8 billion servicing portfolio from Oppenheimer Multifamily Housing & Healthcare Finance, Inc., a subsidiary of Oppenheimer Holdings Inc. The portfolio consists of over 480 multifamily and healthcare HUD loans, and makes Walker & Dunlop the largest HUD multifamily/healthcare servicer in the country. The... Read More »
A graceful exit
Grace Healthcare has made a clean break from both the Arizona and California markets, selling three skilled nursing facilities for a combined $14.7 million. There were two California facilities located about 10 miles from each other in the San Francisco area, which sold for $8.24 million, or $64,600 per bed. Sold to a California-based investor and leased to an operator with a California presence, they included a 50-year old 49-bed facility that offers dementia and rehabilitate care (with a 75% occupancy rate and 34% quality mix), and a 51-bed facility that was built in 1958 and underwent renovations in 2012 (with a 90% occupancy rate and 34% quality mix). Plus, Grace sold its 100-bed... Read More »
A Popular deal
Popular Community Bank, a subsidiary of Popular, Inc., closed a three-for-one financing for a Staten Island skilled nursing facility. The 372-bed facility includes a fully occupied 72-bed neuro-behavioral unit that is one of two in downstate New York. The operator, Centers Healthcare, acquired the then-300-bed facility in 2012 for $34 million, or $113,333 per bed, from St. Vincent Medical Center when the hospital was going through financial difficulties. Centers plans to add another 72 beds to its neuro-behavioral unit, for which Popular secured a $9 million leasehold improvement line of credit. In addition, the bank provided a $32 million mortgage to replace the facility’s existing... Read More »CareTrust’s buying spree continues
CareTrust REIT entered the Michigan market, acquiring four assisted living/memory care communities in the state for $30.8 million, or $163,830 per unit. The assisted living/memory care portfolio includes a 46-unit community in Clarkston, a just-built 40-unit community in Goodrich, a 62-unit community in Burton and a 40-unit community in Lapeer. Similar to previous transactions this year, CareTrust immediately leased the communities to an existing operating partner, this time the REIT amending a master lease with Premier Senior Living. The lease will generate approximately $2.7 million in annual rental revenue, but because of the brand-new Goodrich community, CareTrust gave Premier a... Read More »
NHI in the Nutmeg State
Just a week after announcing it exercised a purchase option on five assisted living/memory care communities from Bickford Senior Living, National Health Investors has made another large purchase, including two Connecticut CCRCs for $56.3 million, or $119,787 per unit/bed. Built in 1968 with a 2009 renovation, the 241-unit/bed community in Bridgeport features 186 independent living units, 26 assisted living units, 13 memory care units and 23 skilled nursing beds. The other community, built in 1991 in Southbury, has 155 IL units, 26 AL units, 14 MC units and 34 skilled nursing beds on a 56-acre property. Both properties were owned by funds managed by certain affiliates of East Lake Capital... Read More »2015: A Year of Extremes?
We have mentioned previously that 2014 saw an unusually large number of high-valued transactions, with the extreme top-end prices driving the average seniors housing prices to historic levels, as well as pushing down cap rates to new lows. But in 2015, while there were proportionally fewer of both the highest-priced deals and the lowest-priced deals (see our April 13 blog post), it was a year of extremes for cap rates. In 2014, the two ends of the market (cap rates above 9% or below 7%) made up 24% of the year’s transaction cap rates. In 2015, cap rates over 9% made up 15% of the total cap rates, and those under 7% accounted for 27%, combining for 42% of the market. Clearly, the boost in... Read More »
Brookdale Laser Focusing On The Future
With fewer distractions and increasing stability, a renewed focus on increasing cash flow and value. So, management at Brookdale Senior Living has got some religion. It has been on the road trying to sell their story to investors. And it appears that selling the bulk of their owned real estate is off the table, which I agree with. They will continue with selective dispositions, although not as many as I think they should, and they have basically put their landlords on notice that as leases come up for renewal, they want to negotiate the lease rates down for the underperformers, or they will walk. Also good news. In addition, they are under-promising with the expectation that they will over... Read More »
CFG’s latest transaction batch
As always, Capital Funding Group closed a number of various transactions in the past month. First, Craig Casagrande originated a $13.7 million loan secured by the cash flow of seven skilled nursing facilities operated by CommuniCare Family of Companies. The loan will be used for general corporate purposes to help strategically position itself for future opportunities. Next, Patrick McGovern originated two-part financing to facilitate the acquisition of two central-Michigan skilled nursing facilities, with 210 beds, affiliated with the not-for-profit University of Michigan Health System. The Peplinski Group was the buyer, receiving a bridge-to-HUD acquisition loan arranged by Capital... Read More »Schedule a demo
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