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 »Independent living price continues decline
The average price per unit paid for independent living communities fell to a level not seen since the four quarters ending Q3:13. In the four-quarter period ending September 30, 2015, buyers paid on average $188,200 per unit for independent living. That is a 24% decline from the heights of the calendar year 2014, when the average price paid was $246,800 per unit. In fact, every four-quarter period since then has fallen from that mark. This sharp drop off may be explained by a decline in both portfolio sales, which typically sell for a premium, and in high quality properties, which was the biggest driver behind the 2014 record. Read More »The Assisted Living ;A Market
Cap rates are low, values are high, but the mix of buyers and sellers in the assisted living acquisition market is changing. How will that impact values going forward? The assisted living acquisition market has been vibrant for the past several years, with demand so high for some properties even the brokers representing the sellers have been surprised on occasion. But something has changed since last year, and there is some disagreement over whether we have reached a peak in the market, or not. A lot of that hinges on what happens to cap rates, and that will be influenced by what the Federal Reserve does. It is now looking like a rate hike may not be coming until next year. If that’s the... Read More »Lancaster Pollard stakes its place out West
Ever-expanding, Lancaster Pollard is opening a new office in Denver, Colorado to oversee the structuring and funding of health care project financings for hospitals and senior living providers in Colorado, Wyoming, Montana and Idaho. Joining the firm to lead this new venture is Rob McAdams, who has been involved in investment sales and debt and equity structuring for the hotel and hospitality industry since 2005, most recently serving as partner at U.S. Hotel Advisors in Denver. The firm also made news with the placement of a $1.8 million bridge loan for a 118-unit assisted living community in Reno, Nevada. After being acquired in 2013, the community improved operations significantly. Now,... Read More »Average AL price deflates
Have we already seen the mountaintop when it comes to the average price per unit for assisted living sales? After four straight four-quarter periods of an average AL price per unit above $188,500 (topping out at $191,300 per unit in the four quarters ending Q3:14), that average has fallen to $183,600 per unit in the four quarters ending Q3:15. Now, to put that in perspective, the next highest yearly average was in 2012 with $164,000 per unit, so we have by no means plummeted from the peak (no bubble has burst either). But what may be true is that prices may have started falling back to earth a bit, and perhaps the highest quality portfolio sales have, for the most part, already taken... Read More »Profitable pharmacy business sells big
We are switching gears slightly with the latest announcement from Mark Myers and Josh Jandris of Marcus & Millichap. The duo recently closed the sale of a privately owned, very profitable pharmacy company that services six New York skilled nursing facilities, five of which are in the Western part of the state and one in Long Island, with a total of 1,100 beds. Serving some of the best rated facilities in the Northeast, with good prospects to grow in the region, the pharmacy sold for $15 million. Gross revenue of the company is about $17 million, and EBITDA had historically been about $2 million, representing a price/EBITDA multiple of 7.5x. Read More »New EB-5 developer hits the ground running in California
Al Rattan, a real estate developer with over 30 years of experience building residential, commercial, industrial, office, health care and senior care properties, is jumping back into the seniors housing market with his company, Continental East Development (CED). Founded in 2009, CED has already developed a number of retail, office, and medical properties, but started to take a look at seniors housing in 2011. Having already developed and operated an independent/assisted living community in Anaheim Hills, California (before selling it at full occupancy), Mr. Rattan plans to utilize large amounts of EB-5 equity (up to 60% of the development cost) raised through his USA Continental Regional... Read More »Private investor sees potential
A pair of skilled nursing facilities in Texas that pulled in more than $12.5 million in total revenue but only retained approximately $500,000 in EBITDA (an operating margin of just 4%) presented an appetizing turnaround opportunity to buyers when it was put on the market. Owned by a public REIT and leased to a third party operator with which the REIT had a larger relationship, the properties included a 160-bed facility in Houston and a 149-bed facility in Mesquite. In addition to their low occupancy (collectively at 75%) and quality mix (at just 15%), the facilities also had age going against them, with the Houston facility built in 1970 and the Mesquite facility in 1977. However, to a... Read More »Schedule a demo
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