The SeniorCare Investor: Is There Trouble In CCRC Land? -
Not If You Are Erickson Living Leading The Way
Who can forget when Craig Anderson and his SHP Senior Living Services purchased the Devonshire at PGA National CCRC in Palm Beach Gardens, Florida in the summer of 2007? At the time, it was a premier CCRC that was built in 1999 with 327 independent living units, 17 assisted living units, 19 Alzheimer’s units and a 60-bed skilled nursing center. Entrance fees ranged from $222,000 to $687,000, and occupancy was close to 97%. The purchase price was never fully disclosed, but we reported at the time that it was between $160 million and $175 million, or between $380,000 and $410,000 per unit/bed. It remains the highest priced asset ever sold in the seniors housing market, and it was quite the coup for Mr. Anderson.
The problem was the debt, which totaled more than the purchase price. The former Merrill Lynch Capital Healthcare Finance provided $155.2 million in a senior term loan, a $6.1 million senior revolver and a $19.6 mezzanine loan. The debt problem was compounded by perhaps the worst timing in seniors housing acquisition history. Within 18 months, the Great Recession was in full swing, and Florida housing values suffered more than in most states. It was a premier asset in a premier location with a premier.........Want to read more? Click here for a free trial to The SeniorCare Investor and download the current issue today