Hats off to Vita
Already with three skilled nursing facilities in the state of New York, Vita Healthcare Group (which is based in New Jersey) has in the past seven months worked to grow its presence in the Mid-Atlantic region. Back in June 2015, the company purchased two facilities with 256 total beds in the towns of Columbia and Elizabeth, Pennsylvania for $18.3 million, or $71,445 per bed. Now, Vita has acquired a 140-bed facility in Hatboro (Philadelphia MSA) for an undisclosed price. Both transactions featured strikingly similar facilities. The Columbia and Elizabeth facilities were built in 1978 and 1968, respectively, and were 86% and 79% occupied, respectively. Meanwhile, the Hatboro facility was... Read More »Troubles Everywhere
This week can go down as one of the worst we have seen in the seniors housing and care market. Putting aside the nearly $10 billion drop in market value of the healthcare REITs and senior care companies, when analysts start asking HCP, Inc. whether they think HCR ManorCare, its $6 billion tenant (well, now closer to $5 billion), may have to file for bankruptcy protection, you know that things are out of whack. The problems at HCR ManorCare, among other things, sent HCP (and some of the other healthcare REITs) into a nosedive. At one point Thursday, HCP’s yield was just over 9.0%, something that is shocking to most people. Now, three of the healthcare REITs yield more than 10%, with a few... Read More »
Father/son tag team steps down
A father and son team is selling their only senior care asset, a 48-unit assisted living/memory care community in North Carolina, for $3.65 million, or $76,042 per unit. Built in 1984, the community features all double-occupancy rooms, with 64 adult care home beds and 32 special care beds. There is certainly room for improvement in operations. Occupancy was just 74% based on beds, with a 50% private pay census. Plus, due to several changes to Medicaid reimbursement (which actually prompted the sale), cash flow suffered, with the community pulling in just $106,000 on approximately $2 million of revenues. The buyer, a national operator with a strong presence in North Carolina, plans to... Read More »
Turn around…again
When Platinum Healthcare purchased a 197-unit CCRC in Cincinnati, Ohio in September 2014 for $3 million, the community had already posted a $1.5 million loss on $5.9 million of revenues in 2013. This was even after the previous owner, Deaconess Long-Term Care, invested $918,000 in capital improvements in the last two years of owning it. The CCRC was over 63% occupied (its skilled nursing was 87% occupied, while assisted and independent living were just under 50% occupied, both with high Medicaid censuses). Now, Platinum is selling the community, which still is just 62% occupied overall and losing over $1 million on approximately $6.1 million of 2014 revenues. The purchase price this time... Read More »Senior Care and REIT Stocks Collapse
Brookdale Senior Living and HCP, Inc. were the first to report on fourth quarter earnings, and investors did not like what they heard. I really don’t know what to say about the news that came out yesterday, other than it had a disastrous impact on the market. Investors were hoping for something positive out of Brookdale Senior Living’s earnings call, but what they got was that a sale of the company was off the table, they may do a stock buyback, and slow growth is what can be expected now. The reaction? The stock plunged by 25% in two hours. HCP, Inc. announced its fourth quarter results, which included announcing they were writing down their HCR ManorCare investment by $817 million, and... Read More »The Ensign Group funds its future
Already one of the more prolific buyers in the healthcare M&A market with 23 transactions in 2015 across the Long-Term Care, Home Health Care and “Other Services” sectors, The Ensign Group is positioning itself for another big year in M&A and increased its revolving credit facility by $100 million to an aggregate $250 million. The facility is supported by a lending consortium arranged by SunTrust Robinson Humphrey, Inc. and Wells Fargo Securities, LLC, and as much as $105 million of it has been drawn as of February 1, 2016. This new expansion also reduced the LIBOR-based interest rate by 50 basis points and extended the termination date for the revolving commitment to February 5,... Read More »Build it and sell it
Carmel, Indiana-based seniors housing developer Leo Brown Group sold two of its recently completed Indiana communities to an undisclosed private equity investment fund for $44.8 million, or $240,591 per unit. The price is a step up from a previous transaction from Leo Brown, when the developer sold a fully occupied, three-year old 140-unit senior living community in Fort Wayne, Indiana to Sabra Health Care REIT for $23.8 million, or $170,000. Included in the 2016 sale was an 81-unit community in Avon and a 105-unit community in Indianapolis. Both will continue to be operated by Traditions Management, an affiliate of Leo Brown. Cody Tremper of Greystone Real Estate Advisors handled the... Read More »
Soft landing for SNF
A not-for-profit owner/operator of skilled nursing and senior care facilities in New Jersey recently acquired a 120-bed facility in Somerset for $12 million, or $100,000 per bed. The buyer, Francis E. Parker Memorial Home Inc., already owns and operates three other skilled nursing facilities in New Brunswick, Monroe Township and Piscataway (the latter two also including memory care services), as well as an assisted living community in Highland Park. The seller was the not-for-profit Saint Peter Healthcare System, which has long had a relationship with Parker. That should make for a smooth transition. Read More »Big bucks back for SNFs
After a month during which we saw no publicly announced skilled nursing acquisition valued higher than $63,000 per bed (well below the average price of $79,900 per bed in the 12 months ending September 30, 2015), here comes two announced in quick succession early this month valued over $100,000 per bed. First, California-based REIT, LTC Properties, acquired a 126-bed facility in the Fort Worth-Dallas area for $16 million, or $126,984 per bed. What attributed to the high price? The facility was brand new, opening in mid-2015. LTC added the property to an existing master lease with an affiliate of Fundamental Administrative Services LLC at an incremental initial cash yield of 8.5% and annual... Read More »Refinancing with a TIF
When a 57-unit senior living community in Princeton, Minnesota looked to refinance their debt through HUD, but had an existing TIF (Tax Increment Financing) bank loan, which can be incompatible with HUD financing, the borrowers turned to Lancaster Pollard for a solution. The LP team, led by Quintin Harris, communicated to HUD that paying off the TIF loan, which was collateralized and serviced by the TIF development agreement, would benefit the senior living community because the cash flow received from the City of Princeton due the TIF Agreement would flow directly to the borrower. That cash flow could then be included in the project value. So Mr. Harris secured a $6 million loan, with a... Read More »Schedule a demo
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