Zenith on the rise
Zenith Capital is expanding its investment in the Seattle-area yet again, with a $23.5 million assisted living/memory care project in Covington, Washington. The company, which specializes in providing alternative financing for the senior housing industry, is partnering with Seniority, Inc., a wholly-owned subsidiary of ABHOW, which is itself currently affiliated with the be.group. The community’s 98 units will include 64 for assisted living and 34 for memory care. At a cost of $23.5 million, or $239,800 per unit, the project pretty much equals the average cost to build like-facilities in the region (at $238,600 per unit), which is pricier compared to the rest of the country. Having closed... Read More »Labor Costs and Senior Care
It seems that too many people are avoiding the discussion of what is going to happen to labor costs, and the future impact on cash flow. Unfortunately, most Labor Day weekends I am toiling away trying to finish the September issue of The SeniorCare Investor. Not this year. Labor Day was so late I was able to finish it up so you would have something to read for the weekend. Really. But then I got to thinking, about labor that is. I see all these acquisitions, and all these pro forma cash flows, and I wonder how labor is going to impact things in the next few years. It is the biggest line item, and the one that may see the most changes. I don’t profess to know how many employees in seniors... Read More »Upside in Oregon
Dan Mahoney and Tony Cassie of Marcus & Millichap handled the sale of two assisted living/memory care communities in Oregon, both with operational upside. First, Focus Healthcare Partners saw potential in a 58-unit community in downtown Portland, which they snapped up for $10.8 million, or $186,200 per unit. Built in 2007, the community was the last acquisition of Sunwest Management and has been owned by a TIC of 17 different investors ever since who were all very hands off, hiring a management company in the area to operate (the buyer, in fact, uses the same manager for its buildings in Oregon and Washington). There were a small number of Medicaid residents in the building. By making... Read More »Jacaranda Trace ready to grow
Cushman & Wakefield and Capital One teamed up together to recapitalize the luxury 492-unit Jacaranda Trace in Venice, Florida (near Sarasota). Located on 33 acres, the property features 436 independent living units, 20 assisted living units and 36 memory care units all built in stages between 1998 and 2015. The units are also split between entrance fee, rental and fee simple contracts. The owner, ROC Seniors Housing, in a joint venture with existing principals of Freedom Senior Management, plans to expand the property to include an additional 120 IL and AL apartments. The financing was arranged by Aaron Rosenzweig, Timothy Hosmer and Caryn Miller of Cushman & Wakefield’s Senior... Read More »Lancaster eyes M&A market
Looking to bolster its already comprehensive M&A services, Lancaster Pollard has hired Chad Elliott to lead its national efforts in sell-side and buy-side advisory services for seniors housing and care properties. Mr. Elliott comes to Lancaster Pollard with experience in M&A, investment banking and private equity from Metalmark Capital, Morgan Stanley Capital Partners and Goldman Sachs. He was also formerly a director of investment banking and capital markets for Recovery Centers for America, a health care startup focused on the mental health and substance abuse sector. With his bachelor’s degree in Economics from Princeton and his MBA from Harvard Business School, Mr. Elliott will... Read More »Ventas SNF spin-off gets in the game
Just a couple of weeks after Care Capital Properties officially was spun out from Ventas and began trading on the New York Stock Exchange, the newly formed post-acute/skilled nursing facility REIT announced its first acquisition, and it was a big one. With eight skilled nursing facilities and one assisted living community and 1,174 beds in the Shreveport, Louisiana market, the portfolio featured an average occupancy of 88% and a 47% quality mix. Also included in the portfolio was a rehab therapy company, four hospice agencies and an interest in an affiliated pharmacy provider. CCP will triple-net lease the portfolio to pursuant to a 15-year master lease containing annual rent escalations... Read More »Expansion project receives funding
A retirement community in Dallas, Oregon originally planned to expand its campus in 2007, but had to put in on hold during the Great Recession (bet that’s not the first time you’ve heard that). But now, the project is off the ground thanks in large part to a $27.6 million bond issue underwritten by Cain Brothers. Already with 45 independent living garden homes, 73 IL units, 65 assisted living units, 20 memory care units and 121 skilled nursing beds, the community, sponsored by the not-for-profit Mennonite Retirement Community, Inc. and operated by Life Care Services, was looking to add 40 new lodge-style IL apartments, a 21,000 square foot clubhouse and various new amenities. The proceeds... Read More »New joint venture debuts
Contemporary Healthcare Capital and Community & Southern Bank announced the first joint closing under their strategic alliance and “uni-tranche” program with a $10.5 million loan for a Pacific Northwest-based seniors housing operator to acquire a 95-unit/116-bed assisted living/memory care community in Ashland, Oregon. The combined loans were valued at about 85% loan-to-cost, translating to an approximate purchase price of $12.1 million, or $127,400 per unit. The borrower also plans to use proceeds of the loan to invest $575,000 in capital improvements, provide initial working capital and pay associated closing costs. The strategic alliance will provide enhanced leveraged financing... Read More »Seniors Housing And Dynamic Pricing
There may be a move to adopt the concept of dynamic pricing in seniors housing, but it comes with its own perils. I may be a bit of a contrarian on this one, but I have to admit I am not too wild about the concept of dynamic pricing for seniors housing. I know it works well with hotels, airlines and multifamily, but all three are very different from seniors housing. I am all for more transparency with pricing, such as posting prices online, but dynamic pricing with weekly price changes based on changing local dynamics doesn’t do it for me. Marketing the seniors housing product is a relationship sale over several months, not instantaneous like a plane ticket. This is a lifestyle decision... Read More »NHI making headlines
National Health Investors (NYSE: NHI) made plenty of news this month, starting with the unexpected announcement that CEO Justin Hutchens was stepping down to become the CIO of HCP. The company also made three acquisitions this month, totaling $33.5 million. First, in a sale/leaseback transaction, NHI acquired a 42-unit independent/assisted living community in Roscommon, Michigan for $6 million, or $142,900 per unit, with a 9.2% cap rate. Occupancy was 100% at the time of the sale, and in the past three years has never been below 90%. The seller, The Brook Retirement Communities, is leasing the property back from NHI for 10 years at an initial lease rate of 7.75%, representing an 8.6%... Read More »Schedule a demo
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