The Dealmakers Forum E-Newsletter, September 25, 2013 - One Condo Retirement Community Is Making A Comeback, Interest Rates, Three Former Marcus & Millichap Brokers Have Formed a New Advisory Company Based in Chicago

 

Bringing You Senior Care M&A Deals and News
 

September 25, 2013 Issue:

 

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
One Condo Retirement Community Is Making A Comeback. Some developers had high hopes for condo retirement communities, but then the Great Recession hit and it has taken time to heal. Read More

 

Recent Senior Care M&A Deals

Home Health Care

Acquirer

Target

Price

Gentiva Health Services

Harden Healthcare

$408.8 million

Long-Term Care

Acquirer

Target

Price

Regal Lifestyle Communities Inc.

Four Retirement Homes

$61.8 million

Paragon Healthcare Group

Stockdale Residence and Rehabilitation Center

N/A

 

Deal of the Week

We have been expecting several large transactions to close out the last four months of a very busy M&A year, and they are just beginning to be disclosed. Assuming nothing is discovered in due diligence, CNL Healthcare Properties, Inc. should be closing on the purchase of 21 senior living communities, most of which are in Oregon (13) and Washington (4). The purchase price is $457.3 million, or $209,200 per unit, and there are 1,366 assisted living units, 664 independent living units and 156 memory care units. The closing will be in phases, starting in late October and finishing in December. The seller is Bonaventure Senior Living, and CNL is expected to split the portfolio among two or three new managers.... Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

Financing of the Week

You’ve got to love the strategy. Interest rates have spiked up since last May, reaching a peak on September 5 but declining since then by 15 basis points at the long end of the curve and 25 basis points for the benchmark 10-year Treasury. So why not hedge? That seems to be what Ventas is doing. The REIT is selling $500 million of three-year notes priced at 99.91% and an interest rate of 1.55%, equating to a 90 basis point spread over the three-year Treasury. In case rates keep rising, which at some point they will, Ventas is also selling $300 million of 30-year notes priced at 99.628% with an interest rate of 5.70%. That comes to a spread of about 200 basis points over the 30-year Treasury. So the REIT is locking in a relatively low cost of funds for the long term, and borrowing at an incredibly low cost for the short term. Not too shabby...Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

Stat of the Week

Much of the focus in the M&A market has been on assisted living and memory care. But the independent living market, at least for the “A” quality properties, has been quite strong. In the 2011 to 2012 period, the average price per unit for the A properties, according to 2013 Senior Care Acquisition Report, 18th Edition, was just under $200,000 per unit. This compares to just $103,300 per unit for the “B” properties. Part of the explanation rests with the difference in operating margin, with the A properties having an average margin of 37.1% compared with 27.6% for the B properties. There was also a significant difference in cap rates, with the A properties having an average of 7.2% in that two-year period, while the B properties were at 8.3%......Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

New Brokerage Firm

Three former Marcus & Millichap brokers have formed a new advisory company based in Chicago that will combine seniors housing and medical office buildings in their specialty practice. Managing directors and founders Jake Gehl, Ben Firestone and Chis Hyldahl plus three additional staff members have teamed up with the owners of HHC Finance to provide a wide array of advisory services that will also take advantage of the HHC Finance relationship. Under the name Blueprint Healthcare Real Estate Advisors, the new firm will have offices in Chicago, Los Angeles, New York City and Washington, D.C.....Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

Expert Opinion: A Conversation with Marilynn Duker

In this "Expert Opinion" interview, Marilynn Duker, President, The Shelter Group and Brightview Senior Living, discusses construction costs, geographic footprints, memory care, financing, changes, and more..... Watch the video

 

Oak Grove Capital

Oak Grove is a nimble, non-institutional mortgage lender with an experienced, dedicated Seniors Housing group focused on high-quality service and delivery. We don’t aim to be the biggest, but we work hard to be the best, using a highly personalized approach that simply outperforms other lenders. We have decades of experience working closely with Fannie Mae, Freddie Mac and HUD. Our clients have learned they can depend on it. That’s why 80% of our business is repeat business. See it for yourself.  Call us at 630-399-0140 or visit us online at http://www.oakgrovecap.com

 

GE Capital, Healthcare Financial Services provides tailored healthcare real estate financing solutions

Like a bank: We finance healthcare real estate. Unlike a bank: Healthcare financing is all we do

We offer customized healthcare real estate and medical property financing solutions including first mortgages, interim financing, acquisition financing and sale leasebacks for a wide range of healthcare operators, real estate developers and investors.  In fact, during 2012 we helped organizations like yours finance over $2.6B in senior housing, skilled nursing facilities and medical properties across the U.S.
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