EXPERT OPINION: A Conversation with Ken Assiran

February 18, 2014

In this "Expert Opinion" interview, Ken Assiran, Managing Principal, Capital Health Group, discusses property acquisitions, HUD, Utah, debt, and more..........

Kenneth Assiran    Watch the video      Read the transcript

Kenneth Assiran was a founding partner and Managing Principal of the Capital Health Group, LLC (“CHG”) and is responsible for all management at CHG. Mr. Assiran originated the portfolio and manages the acquisition process and directs the asset management functions at CHG. Lines of credit and lending relationships are developed and managed by Mr. Assiran.

Capital Health Group, LLC is a privately held owner operator of senior housing facilities throughout the United States. As of February 2012, Capital Health Group owned an interest in 16 facilities consisting of over 1,200 beds. This portfolio is located across ten states nationally and includes independent living, assisted living, and memory care facilities. The Company was founded in October 2006 and is headquartered in Media, Pennsylvania. Capital Health Group is lead by founding members Kenneth R. Assiran and John W. Dwyer, and senior management team has over 100 years of combined experience in the senior housing and real estate industries.
 


Contact Information:

Ken Assiran
Capital Health Group, LLC.                              
Media, Pennsylvania                      
610-565-7820                                 
kassiran@caphealthgroup.com



Watch the video of the interview: 

Read the interview transcript:

 

Steve Monroe
I’m sitting here with Ken Assiran. He’s the Managing Principal of Capital Health Group. Ken, you started off 2014 with a bang with the announcement of a $96.6 million acquisition of eight properties out West. What did you like about this portfolio?

Ken Assiran
I thought it was a great portfolio. The buildings were in good shape. There was a great corporate culture there and it was a great opportunity for us to buy enough mass to open a new region in the west.

Steve Monroe
So, that is a new region for you? I don’t think of you as going that far out.

Ken Assiran
Yes, it is a new region for us. We’re very interested in getting a foothold in the West and this portfolio is providing that opportunity.

Steve Monroe
Was that part of the strategic decision with your growth plan to expand geographically?

Ken Assiran
Yes. I think our growth plan is to expand into new regions where we can buy enough critical mass and to enhance our existing regions.

Steve Monroe
Do you have any plans to do anything at these communities? There were eight of them, correct?

Ken Assiran
Well, there are actually nine buildings, but there are eight campuses. We’ll work with the buildings. The buildings are in good shape, but we’ll enhance them, we’ll do some renovations in the buildings. We want to provide our customers with the best possible physical plant that we can, so we’ll do some enhancements to the buildings. But basically the buildings are good.  There’s a good culture at the buildings.

Steve Monroe
They’re about an average of 10 years old, right?  So, they’re in pretty good shape. Is there anything specific you’re going to be doing?

Ken Assiran
Yes. Overall we’ll be enhancing services and programming, but in order to do that we’ll be adding to the level of care, we’ll be adding programming and we’ll be adding to the continuum of care. The buildings that were assisted living that didn’t have dementia care, in some cases we’re adding dementia care. In one case we’re building a new dementia care or every care building.

Steve Monroe
Which seems to be the thing to do these days. Everyone is doing dementia care, which, obviously, is an important need. You and your partners put a lot of equity into the transaction, almost half the deal price. Was that an important consideration in terms of getting the transaction done from the seller’s perspective?

Ken Assiran
No, I don’t think it was really the seller that was driving that. We always invest carefully in whatever we do and I think with our partner AEW in this transaction we basically decided to put a reasonable amount of leverage on the deals and we basically assumed the existing debt in all cases in Utah.

And in the Nevada transaction we bought all equity. So, I think that skewed the ratio a little bit. 

Steve Monroe
All the properties were in Utah, but one in Nevada?

Ken Assiran
Yes.

Steve Monroe
Right, okay. And your equity partners, do you think you’re going to be doing some more deals with them, a little bit more growth in the partnership?

Ken Assiran
In our joint venture, we have a joint venture with Hunt Realty Investors and in that joint venture Texas Teacher Retirement invests as well. So, we’ll continue to grow with our joint venture with Hunt and Texas Teacher. We also want to do more work together with AEW.  So, we will continue to grow. We’ll continue to acquire within our joint venture and I expect with the kind of rapport we’ve developed with AEW we’ll continue to work closely together.

Steve Monroe
And you said on this particular transaction, with the equity slug, it was all assumed debt or did you have to raise any additional debt?

Ken Assiran
No. In Utah we’re basically assuming all the debt. It was all Fannie Mae debt. One of the buildings has HUD debt on it, which we’ll assume as soon as we finish, we go through the HUD process.

The Nevada building, which we basically bought by ourselves in our own joint venture, we bought that all equity and we’re in the process of putting commercial debt on it right now.

Steve Monroe
Why did you do all equity upfront? Are you going to enhance it before you put the debt on it, or did you just want to close it?

Ken Assiran
No. In other words we had to pay off the debt as part of the acquisition and so, we basically didn’t want to bring in another lender to complicate the acquisition. So, our plan was to finance it and put debt on it post acquisition.

Steve Monroe
Got you. Okay, good. Now, that’s a big deal for you to start the year. Do you have anything else like that in the pipeline for the rest of 2014?

Ken Assiran
Yes, we have other prospects we’re looking at. We’re looking at also developing a couple of deals. As a matter of fact, it’s very opportune that we’re in South Florida because we’ve bought some land in Fort Lauderdale and soon we are going to buy some land in Boca Raton and we’re going to build two large buildings in South Florida. We have a major commitment to South Florida or Florida. 

I don’t know if you know this or not, but our management company now manages 75 buildings.

Steve Monroe
I knew it was up there; I didn’t know it was that high.

Ken Assiran
Yeah, we have quite a few. I believe we have eight in South Florida, so we’re really making a major investment in the Southeast.

Steve Monroe
Well, the Florida housing market is getting better, the Florida economy is getting better, so it’s probably not a bad place to be as long as too many people don’t follow you in the new development side.

Ken Assiran
Well, I think in South Florida, in Boca Raton and in Fort Lauderdale, it seems like in the markets here, there hasn’t been a lot of new product built here and I think the markets are ready for some new product.

Steve Monroe
Okay, good. Well, good luck and I hope to see you doing some more acquisitions, so I can talk about them with you and the development.

Ken Assiran
Well, I think we will. Our strategy is to continue to grow and continue to work with our partners.  And thank you very much, Steve.

Steve Monroe
All right, great. Good to catch up with you.

Ken Assiran
Thank you.

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