Three high-priced acquisitions in PA
In a sale-manageback transaction, a non-traded REIT purchased three senior living communities with 328 total units in Pennsylvania from Heritage Senior Living for $87.5 million, or $266,800 per unit. Compared to the average price paid for AL/IL communities of $198,800 in the trailing-12 months ending Q1:2015 (according a supplemental report for the Senior Care Acquisition Report), this represents a significant premium. The properties, located in York, Bethlehem and Harleysville, Pennsylvania, offered independent living, assisted living and memory care services, and were well occupied at the time of the sale. Mark Myers of Marcus & Millichap handled the transaction. Read More »RED Capital funds SNF acquisition
Investment360, a boutique healthcare investment group, plans to improve census and quality mix at a 440-bed skilled nursing facility it acquired, with the help of a $36.5 million bridge-to-HUD loan from RED Capital Partners. The facility has historically struggled, and Investment360 hopes that by bringing in Excelerate Healthcare to operate the facility as part of a long-term lease agreement, it can reposition the facility to meet a higher acuity population and become a market leader in the Syracuse, New York area. The loan came from RED’s balance sheet lending program at a very competitive spread. Read More »Assisted Living Occupancy Declines…Again
Second quarter occupancy trends are soft again, with construction starts strong. So, are people finally beginning to believe that the development boom we have been talking about is actually starting to impact census? We are talking about assisted living and memory care, because that is where the action has been. According to the second quarter NIC MAP data, assisted living occupancy has dropped again sequentially, and is down 45 basis points from a year ago. But worse, and more to the point, trailing 12-months assisted living construction starts as a percent of existing supply has been at 4.7% and 4.8% for the past two quarters, much higher than a year ago. And, more development pipelines... Read More »Seven sales in North Carolina
Mike Pardoll of Marcus & Millichap burst out of the gate in July, arranging the sale of seven senior care properties (six assisted living and one skilled nursing facility) in North Carolina in three separate transactions, totaling almost $43 million. The first was the sale by a not-for-profit foundation of five assisted living properties with 300 units (there are 60 units at each) for $22.3 million, or about $74,300 per unit. Meridian Senior Living was the buyer. Second, a group of private investors sold their 60-unit assisted living community in Wadesboro, North Carolina to Meridian Senior Living for $4 million, or $66,700 per unit. Finally, Mr. Pardoll, together with Mark Myers also... Read More »HJ Sims executes $22.5 million refinance
A CCRC in Annapolis, Maryland with a securitized $17 million mortgage that did not allow a prepayment (current balance was down to $15 million) secured a bank refinance with the help of HJ Sims. The CCRC already had a history with HJ Sims, having received a $48 million construction loan and $8.4 million of development capital from them in 2001 and the $17 million mortgage in 2005. Because this mortgage was due on January 1, 2016, the CCRC had to defease the existing mortgage by escrowing all future principal and interest payments, thereby creating negative arbitrage. Plus, the CCRC had been servicing an outstanding subordinate loan from the original developers ($300,000 of which was... Read More »Prices vs. Expenses
With the average price for independent living increasing at a faster pace than that of assisted living for 2014 sales, it makes sense that the spread between the expense ratio for IL and for AL would also widen. However, the change was bigger than expected. The expense ratio for IL decreased from 64.4% in 2013 to 61.0% in 2014, while for assisted living, the expense ratio actually increased by 260 basis points from 70.6% in 2013 to 73.2% in 2014, effectively doubling the basis point spread between AL and IL, from 620 basis points to 1,219 basis points. What could account for the higher average expense ratio for AL are the higher acuity levels and more memory care services. Read More »People on the Move
The former San Diego office of CBRE’s national senior housing group has departed and joined forces with DTZ. Executive Managing Director Dave Rothschild and Senior Managing Director Mary Christian, together with their team of Scott Belz, Mariflor Bernal and Tina Climon, will complement DTZ’s east coast efforts led by industry veteran Allen McMurtry in Tampa, Florida. This will double DTZ’s seniors housing team, which will be even larger when the merger with Cushman & Wakefield is completed. It should be a good fit with decades of experience from both offices, with the west coast team staying in San Diego. Good luck to all. Read More »Cain Bros. arranges two HUD loans
Cain Brothers Funding, the mortgage banking affiliate of Cain Brothers, arranged $31.5 million in HUD financing for two clients in California and New York. The first was a $13.67 million HUD mortgage loan for Eskaton Senior Living Communities to refinance a 105-bed non-profit assisted living community in Northern California. The proceeds of the loan retired existing bank debt and an interest rate swap, to replace it with a 35-year fully amortizing term and a fixed interest rate of 3.07%. The second loan was a $17.8 million HUD mortgage for Catholic Charities of Brooklyn and Queens to refinance existing commercial bank and tax-exempt bond indebtedness on a 200-bed skilled nursing facility... Read More »Arbor Commercial Funding adds Fannie Mae program
Already having been one of the Top 10 Fannie Mae DUS Multifamily lenders by volume for some time (with over $1.6 billion in transactions in 2014) and the Top Fannie Mae Small Loan Lender in 2014, Arbor Commercial Funding, a subsidiary of Arbor Commercial Mortgage, was just approved as a Fannie Mae Seniors Housing DUS Lender. Under the new program, which will be headed by COO, John Caulfield, Arbor will look to provide non-recourse financing from Fannie Mae for independent living, assisted living and memory care communities. With the program in its infancy, there have been no transactions yet, but the pipeline is building. Since fully developing their Seniors Housing and Healthcare Finance... Read More »Chartwell pays big bucks for Toronto community
Less than a week after completing the sale of its entire U.S. portfolio comprised of 5,025 suites in 35 communities, the net proceeds from which amounted to USD $333.0 million, Chartwell Retirement Residences decided to put that money to use in acquiring a high-end, 257-unit independent living community in Toronto, Ontario for $85 million, or $330,700 per unit (compared to the average price per unit for IL in the US in 2014 of $246,800). Located in four towers across from Toronto’s High Park, the community was built in 1985, but recently underwent a significant renovation to the units and common areas. The property also includes 66,880 square feet of commercial space that is 100% occupied.... Read More »Schedule a demo
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