Berkadia originates $366 million financing
Working with both Fannie Mae and Freddie Mac, Berkadia arranged two loans totaling $366.7 million for Brookdale Senior Living to refinance 39 of its seniors housing properties in two separate portfolios. The first portfolio, including 21 properties with 1,924 units and an average occupancy of 91%, is made up of 5.7% IL, 15.9% MC and 78.4% AL units. It was refinanced with a $226.4 million, 10-year loan through Fannie Mae arranged by Managing Directors Heidi Brunet and Christopher Fenton of Berkadia. The loan come to $117,700 per unit. The pair also closed a $140.3 million (or $117,900 per unit), seven-year loan through Freddie Mac for a portfolio of 18 properties, which consists of 1,190... Read More »Being Large In Seniors Housing
Size isn’t all its cracked up to be, and it does matter whether you own or operate the real estate. We always hear that size matters, but it can also work against you. While no one has claimed to be able to define the optimal size of a seniors housing company, I have yet to hear anyway say that they would be comfortable running a company with more than 500 properties. Most would say that 250 would be tops, with many of them even much smaller. I am talking about owning and operating, with the emphasis on operating. For REITs, I don’t know if there is a real number where their efficiencies get maxed out. They are not hiring the staff and serving the food. And they are not trying to... Read More »When it rains, it pours
The announcements keep coming from Lancaster Pollard, with the firm announcing two transactions (and three loans) plus a new addition to its M&A group just in the last few days. First, Mike Ashley led the way in obtaining funding for a local nonprofit to refinance and renovate its senior living facility in Higginsville, Missouri. With Life Care Services managing the facility since 1995, the nonprofit plans to increase the number of skilled nursing beds by 16 private rooms in a new wing, in addition to making other improvements to the building. Following the $5.4 million renovation, the community will feature 145 IL units, 26 AL units and 56 SNF beds. Lancaster Pollard worked with local... Read More »Stayin’ Alive
A North Carolina skilled nursing facility that was built in 1994 but voluntarily closed in 2012 was purchased for $6.05 million, or $43,200 per bed. Owned by a regional owner/operator based out of the Southeast, the facility features 133 skilled nursing beds and seven assisted living beds. After closing the facility, the owner still kept the license and CON active, which was probably the motivation behind the acquisition, as the buyer, a North Carolina-based skilled nursing operator, will either invest capital to upgrade/reopen or build a new facility within the county. Patrick Burke of Senior Living Investment Brokerage handled the transaction. Read More »Build in Broken Arrow
At the beginning of this year, we wrote about the rise of seniors housing construction in the Tulsa, Oklahoma area, with four projects scheduled to open in the second half of 2015, representing a total investment of over $35 million. Indeed, according to NIC MAP data, the construction vs. inventory ratio for assisted living in the MSA is over 30%, one of the highest for any MSA in the country. Well, we have to add one more to the books, as Prevarian Senior Living just broke ground on a 105-unit assisted living/memory care community in Broken Arrow, Oklahoma. Prevarian, a private equity investor, is partnering with an affiliate of St. John Medical Center Hospital, on whose campus the... Read More »Healthcare REIT Stocks Surge
After the Federal Reserve announced it would not raise interest rates, at least not this month, healthcare REIT stocks surged on the news much more than the market as a whole. While the major stock indices were up between 0.5% and 1.0% in the first hour after the news, the healthcare REIT stocks increased from about 1.5% all the way to 6.0% for newly spun-off Care Capital Properties. We know Ray Lewis must have breathed a sigh of relief. This was a bit of a reprieve for the badly battered healthcare REITs, which suffered exaggerated declines during the past month or two. But rates will be increased, at some point. Read More »Hunt and Healthcare
Entering the senior living/healthcare lending market, Hunt Mortgage Group closed its first transaction in that sector with an $8.85 million refinance loan for a 50-bed memory care community in Rockwall, Texas through its new balance sheet lending platform launched earlier this year. Jim Neil, Director of Healthcare Lending at Hunt, was the originator while Jenifer Williams led the underwriting team on the transaction. On the receiving end of this loan was The LaSalle Group, the developer of the prolific Autumn Leaves® brand of assisted living/memory care with 27 existing communities and 15 under construction. Its community in Rockwall opened in 2011 and stabilized by mid-2013. But when a... Read More »Seniors Housing: Build or Buy?
In this strong seniors housing acquisition market, when does it make sense to build a brand new community or buy an “A” quality community? Based on seniors housing construction projects since 2013 (which includes independent, assisted living and memory care, or some combination of the three), the average cost to build a new project is approximately $209,000 per unit. New construction, of course, comes with certain benefits. You will have a brand-new community with all the bells and whistles that can help attract attention. But you then have to fill it up, staff it and deal with the increasingly potential risk of a competitor opening up down the street. And to buy a stabilized, “A” level... Read More »CBRE helps refinance successful community
A 100-unit independent living community well located in Carmichael, California with a strong occupancy history was recently refinanced with the help of CBRE. Aron Will of CBRE National Senior Housing and Kevin Randles of CBRE’s Debt and Structured Finance office arranged a $12 million fixed-rate loan from Fannie Mae. CBRE Multifamily Capital originated the loan on behalf of the borrower, Ray Stone, Inc., which operates five other communities with over 800 units in California and has operated the Carmichael community since its opening in 2003. Occupancy has ranged from 95% to 99% in the last few years, with rents starting at $1,500 a month and going up to about $4,000 a month. The refinance... Read More »Seniors Housing And The Flu
This past flu season has been blamed for many of the current seniors housing occupancy problems, but it has been bad for three years. When looking at the decline in seniors housing occupancy over the first two quarters of this year, much was made of the unusually severe flu season. While we are sure some companies and individual communities were hit particularly hard by this past winter’s flu, Barclays came out with an industry report which included a very interesting graph. It depicted the percentage of visits for influenza-like illnesses reported by the U.S. Outpatient influenza-like illness Surveillance Network. Yeah, I had never heard of that one either. Anyway, it did show that there... Read More »Schedule a demo
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