ALF with upside sells
A 60-unit assisted living community in Columbus, Georgia that was not fulfilling its revenue potential sold to a private investment group for $4.85 million, or $80,800 per unit. Built and owned by the not-for-profit St. Francis Hospital since 1999, the community had historically struggled with occupancy, until in 2006, it leased a wing of 14 units on the second floor to VistaCare, Inc., an unaffiliated hospice company. That move helped bring occupancy up to 97%, but at the same time it was tough to turn a profit, with an average rent received from VistaCare of $2,150 per unit per month based on a base rent plus a PPD reimbursement. At the time of the sale, the community was operating at... Read More »California CCRC in the works
Life Care Services (LCS), together with local companies Villaggio Communities, John Madonna Construction and RRM Design Group, announced plans to build a 350-unit entrance fee CCRC in San Luis Obispo, California (located about halfway between Los Angeles and San Francisco) as part of a $500 million mixed-use project that would cater to seniors. In addition to the CCRC, which would be the first in its county, the project will include between 150,000 and 350,000 square feet of commercial retail space, 200 apartments and 60-100 single-family detached homes. Villaggio Communities, a seniors housing developer, is in the process of acquiring 111 acres from John Madonna Construction. The proposed... Read More »Market Turmoil And The Senior Care Market
With stock prices plunging, the impact on the senior care market will be mixed. Well, it’s been a rather interesting past week or so, with more volatility likely in the days ahead. But what does it all really mean, at least for the senior care market? Other than share prices tanking for the few remaining publicly traded providers, as well as the REITs which, at least until recently, were supposed to trade more like bonds, the one takeaway can be summed up in a word: caution. But we had sort of sensed this about two months ago, given the nature of the transactions in the market. But will a sense of caution curtail the vast development pipelines that we hear about? Too early to tell, and... Read More »Sold before reaching the mountaintop
An assisted living community with an improving census and reputation sold to a regional operator before fully realizing its potential. As rough starts go, this community in East Stroudsburg, Pennsylvania may take the cake. Built in 1984 as a skilled nursing facility, it never opened as such because the developer defaulted on the bond financing the project. A Lutheran senior housing group then bought it and operated it as an assisted living community until January 2013, when a group of doctors bought the community with just 12 residents occupying it. After remodeling the third floor to add 29 memory care units and an adult day care program, the doctors brought the census up to 66 residents... Read More »Bank Leumi refinances in Florida
Hely Santeliz of Bank Leumi’s Florida region led the way in structuring two refinancings for senior living properties in Florida totaling $43.7 million. In the first transaction, Bank Leumi structured a $54 million refinancing with it providing $27 million and a regional bank providing the other half for a retirement campus with independent/assisted living and memory care units in Central Florida. And staying in the area, Hely Santeliz also arranged $16.7 million in two credit facilities for Plantation Oaks Senior Living Management, a Florida-based seniors housing owner/operator. The first credit facility was secured by a first mortgage on an existing 67-unit AL/MC community and was... Read More »In Indiana
Life Care Services (LCS) recently announced it was breaking ground on the Clarendale of Schererville in Schererville, Indiana, the third “Clarendale” property for LCS and construction partner Ryan Companies. The community will feature 177 units of independent living, assisted living and memory care at a cost of $40 million, or $226,000 per unit, to build. The two other “Clarendale” properties are located in Illinois: a 186-unit community in Algonquin and a 156-unit community in Mokena. While the newest property will be ready to open in spring 2017, it will not be short on company. There has been plenty of building going on in the state of Indiana, particularly in the Gary and Indianapolis... Read More »Go with Propero
For operators looking to own their own facilities while minimizing the amount of capital committed to construction, Lancaster Pollard offers a program that may help them do just that. Launched in 2012 and led by Craig Jones, LP’s Propero™ Senior Housing Equity Fund has provided a total of $88 million in gross investments spanning across the acuity spectrum, from IL/AL to memory care to skilled nursing. The way it works is the Fund invests in seniors housing properties as the sole owner and then triple-net leases them to an operator. The operator, therefore, doesn’t have to invest as much equity in the project or acquisition and can then choose from a predetermined purchase option schedule... Read More »Struggling facility sells…under $12,000 a bed
It’s not often we see a senior care facility sell for under $15,000 per bed, especially when that facility is majority AL, with a smaller SNF component. It’s also rare to see a facility with a combined occupancy of 82% and a 20% Medicare census at the SNF. Nevertheless, a facility just like that in Corona, California sold for $2.5 million, or $11,200 per bed. Just how could a facility with adequate occupancy and a decent Medicare census sell for so low a price? Well, that was what the operations went for without the real estate…yet. The owner, who previously owned a number of other SNFs in the area but has since lost them all to bankruptcy, had a history of hiring friends and family at... Read More »A lot of building, but what’s the cost?
Taking a look at the NIC MAP® Construction Monitor as of Q2:15, which examines seniors housing construction in the Top 99 MSAs, we noticed on the AL side there were 22 MSAs with a construction vs. inventory ratio above 10%. If that doesn’t show a frothy development market, then what does? But, what is the cost to build in some of those MSAs? The Sarasota market, which has gotten a good amount of attention for its development pace, has eight assisted living properties under construction, and 893 units, representing a construction vs. inventory ratio of 30.7%. According to our data, which tracks senior living construction projects since 2013, majority-AL communities in the Sarasota market... Read More »Excessive Use Of Ultra-High Therapy in SNFs
A recent story highlighted the dramatic rise in ultra-high therapy use in SNFs, but are there legitimate reasons for it? Two days ago, The Wall Street Journal had a front page story about the sudden increase in the percentage of patient days in skilled nursing facilities using “ultra-high” therapy, which is a maximum of 720 minutes per week. Apparently, in 2002, nursing facilities gave ultra-high therapy to patients on 7% of the days they billed to Medicare, but this increased to 54% of patient days by 2013, with the percentage increasing every year. The gist of the story was that providers have been gaming the system to get the highest reimbursement. I had hoped we were getting beyond... Read More »Schedule a demo
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