The Dealmakers Forum E-Newsletter - May 22, 2013 - The AdCare Saga Goes On, Do Portfolios Have Much of an Impact on Value

 

Bringing You Senior Care M&A Deals and News
 

May 22, 2013 Issue:

 

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
The AdCare Saga Goes On. No restated financial results, no current financial statements and no tender offer from Chris Brogdon.... Read More

 

Recent Senior Care M&A Deals

Long-Term Care

Acquirer

Target

Price

Brookdale Senior Living

7 Senior Living Communities

$80.9 million

Urban Innovations

Affordable Senior Residential Complex

$3 million

Stock of the Week

In late March, Omega Healthcare Investors was our stock of the week, driven by its relatively high dividend yield and 12-month price increase of 50%. The stock keeps hitting new highs, and since May 1 it is up more than 16%. Come on, investors don’t like skilled nursing stocks but love a REIT that owns practically nothing but skilled nursing facilities? That is certainly a case of beating the odds. The only negative aspect of the share price increase is that the yield has dropped from about 6% two months ago to 5% today. As long as they keep on increasing the payout, which they have, investors will continue buying the stock, which they are..... Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

Deal of the Week

With rumors still swirling about a potential sale or capital event at Brookdale Senior Living, the company keeps on increasing its real estate ownership. In the latest deal, Brookdale is purchasing seven communities form Chartwell Retirement Residences for $80.9 million, or about $132,000 per unit. Located in five states, Brookdale had been managing six of the seven, which it picked up with its 2011 acquisition of Horizon Bay Retirement in 2011. The portfolio has a mix of 80 IL units, 493 AL units and 40 Alzheimer’s units with an occupancy rate of 91.8% in 2012, which is not too shabby. The deal, which is expected to close this summer, will be 75% financed (mostly with assumed debt) with the balance from cash on hand. This will just make the company a little more valuable with the real estate ownership.....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

Do portfolios have much of an impact on value? Usually, they do. In 2012, the average price per unit for assisted living sales involving just one or two properties was $126,700 per unit, up about 4% from 2011. For portfolio sales, involving three or more properties, the average price in 2012 was $195,700 per unit, down about 5% from 2011. So that’s about a 50% difference in price between portfolios and non-portfolio sales. Part of the reason for this is that it is more likely that higher-quality properties will be sold as a group to take advantage of the portfolio premium than will lesser-quality properties, where there may be properties that buyers don’t want, thus pushing the overall price down. And as we will see soon, a few portfolios on the market this spring will be coming with very high prices and low cap rates.... 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 Len Lucas

In this "Expert Opinion" interview, Len Lucas, Senior Director, Love Funding Corporation, discusses HUD, Love Funding, private equity, debt markets, and more...... Watch Video

 

TOMORROW: Interactive M&A Webcast:
CCRCs: Buying, Selling and Valuing
Thursday, May 23, 2013, 1:00 pm ET            
Has the market changed since the depths of the Great Recession? The answer is yes, and while there are still some distressed CCRC sales on the market, the environment is much better with the housing market gaining strength and perhaps a pent-up demand for what the CCRC product offers. Find out more from our expert panel: Stephen M. Monroe (Moderator), Managing Editor and Partner, Irving Levin Associates, Inc.; Paul Brand, Treasurer and CFO, Concordia Lutheran Ministries; Allen McMurtry, Executive Managing Director, Principal, Cassidy Turley; David Reis, CEO, Senior Care Development, LLC; David Salinas, Partner, HealthTrust LLC.
Go to http://www.levinassociates.com/conferences/1305b-online-conference or call 800-248-1668 to register.

 

JUST PUBLISHED - The Senior Care Acquisition Report, 18th Edition - Save $50 Instantly
Deals have been made. The 2013 Senior Care Acquisition Report contains private deals in this market that are frequently too small to make it into the financial press. Take advantage of our limited $50 savings offer - order The 2013 Senior Care Acquisition Report by May 31st and save $50 instantly! Now that’s a recession resistant deal. Go to http://www.levinassociates.com/landing/scar18order or call 800-248-1668 to order today!

Webcast Calendar... Click here to see more