Mainstreet breaks ground in Fort Worth
Construction has recently started on Mainstreet’s latest transitional care facility. The Next Generation® property, which will cost $19.3 million, or $205,300 per bed, to build, will feature 94 beds of both transitional care (short-stay rehab and therapy) and assisted living. Typical Mainstreet properties feature a 70-30 skilled nursing-to-assisted living breakdown, so we have to assume the same for the newest San Antonio property. The project is expected to be finished by October 2016 and marks the entrance of Mainstreet in the state of Texas. Dover Construction Company is the contractor for the project, while Evansville, Indiana-based Old National Bank provided construction... Read More »Immigration and Seniors Housing Labor Woes
Bringing in low-skill, low-wage immigrants for seniors housing may not be the answer. There have been calls to ease immigration in order to bring caregivers into the U.S. to fill low-skill jobs in seniors housing. As you know, this is a need that will be growing for the next 30 years or more, so the demand for labor is not the issue. But here’s the flip side of this. There are about 6 million workers in the U.S. with part-time jobs looking for full-time jobs. There are also, by one count, at least 600,000 people who have stopped looking for jobs. But that seems low to me. The point is, there are plenty of people who want full-time work in this country. And there are plenty of people who... Read More »Construct with HUD
With all the construction going on today in the seniors housing and care industry, how are these developers financing their projects? Once you get past the longer lines and list of regulations, HUD has a few attractive options. Walker & Dunlop is one lender that has worked with HUD a good amount recently to fund new construction and expansion projects for borrowers across the country. One such example is a $5 million construction/permanent loan through HUD’s 232 program for TDK Companies to build a 36-unit assisted living/memory care community on its existing 82-unit AL campus is Murfreesboro, Tennessee. Primarily a build-and-hold multifamily developer, TDK forayed into the seniors... Read More »Average SNF cap rate falls below 12%
Although in the four quarters ending Q3:15 the average assisted living cap rate rose slightly (5 basis points) and the average independent living fell by just 20 basis points, we saw a much bigger shift in the average skilled nursing facility cap rate, which fell 60 basis points from 12.4% in 2014 to 11.8% in the four quarters ending Q3:15. That is the lowest average SNF cap rate we have seen in any four-quarter period. Conversely, and understandably, the average price per bed for SNF transactions increased by $3,300, for a 4.3% change. So as the quality of facilities sold increases, driven largely by a higher Medicare census, or at least potential for it, and cost of borrowing remains... Read More »Slumping Ventas
Investors did not like what they heard about Ventas for the third quarter, despite an earnings beat. So, when we first heard that Ventas was announcing that third quarter earnings were going to exceed estimates, we thought, ho-hum, so what else is new, they always beat estimates. The press release was glowing about all the accomplishments during the quarter. They revised guidelines for the full year slightly upward. I didn’t get a chance to listen in live to the earnings call, but I did notice how the share price dropped by 5%. What, on an earnings beat? And then it dropped a little more. It was the revenue miss and concerns about growth that sent investors to the exits. Since then, there... Read More »HUD’s top lenders
We will be profiling the top 10 HUD LEAN lenders in the coming issue of The SeniorCare Investor, but here is a little snapshot. We already mentioned last week that Lancaster Pollard finished well ahead of the pack, with 65 transactions totaling $531 million. Coming in second place, dollar-wise, was Housing & Healthcare Finance. The Chevy Chase, Maryland-based firm closed 22 transactions, for a total of $264.2 million. Loan sizes ranged from as low as $3.96 million up to $28.78 million. Coming in third was Capital Funding, which actually closed 28 loans (second place) totaling $257.8 million. Good job to all. Read More »Sell on top, or near it
Despite many believing we have already reached the peak, pricing-wise, in the seniors housing M&A market, it is still a very good time to sell. That is at least what SRP Medical was banking on when it sold its newly built 108-unit assisted living/memory care community to a joint venture between Harrison Street Real Estate Capital and Bridgewood Property Company. Opened in 2013, the community features 60 AL units and 48 MC units and is located near The Woodlands, Texas, in the town of Spring, an area which has seen plenty of seniors housing construction recently. A change in operators a year after opening caused some marketing issues, which contributed to bringing occupancy down to 50%.... Read More »Constructing in Chicagoland
Aron Will of CBRE National Senior Housing arranged a pair of construction loans on behalf of a joint venture between Pathway Senior Living and Virtus Real Estate Capital to build two senior living communities. First, the joint venture will build a $34.4 million community in Westmont, Illinois with 75 assisted living units and 34 memory care units to be financed with a $24.075 million loan. And second is a $26.2 million project with 120 assisted living units in Lake Zurich, Illinois funded by $18.313 million in construction financing. Both floating rate loans feature four-year terms with 36 months of interest only and were placed with a regional bank. Pathway will manage the two properties... Read More »Contemporary funds pair of acquisitions
In the last couple of months, Contemporary Healthcare Capital closed a couple of loans totaling $8.5 million. First, the lender provided a $1.5 million senior mortgage loan to a Colorado-based seniors housing and long-term care operator for the acquisition of a 103-bed skilled nursing/assisted living facility in Elkhart, Kansas. Second, Contemporary provided a $7.0 million mezzanine loan to a New York-based long-term care operator to acquire a 302-bed skilled nursing facility, with a dialysis center, in Flushing Queens. Both financings helped fund the acquisitions and closing costs, as well as working capital for the facilities. Read More »HUD Rankings
So another fiscal year goes for HUD, and once again, Lancaster Pollard topped the list as the most prolific lender in the LEAN program. In 12 months ending September 30, 2015, both number of loans (291) and total dollar volume ($2.7 billion) fell off from 2014’s total of 484 loans and $4.2 billion of dollar volume. In turn, Lancaster Pollard’s total dropped as well. The Columbus, Ohio-based firm closed 65 loans totaling $531 million, or 22.3% of the total loans and 19.7% of the total loan amount, compared to 88 loans and $718 million of dollar volume in 2014. The next largest lender closed 22 loans and $264 million of dollar volume, a steep drop off. Lancaster Pollard has actually been the... Read More »Schedule a demo
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