The Dealmakers Forum E-Newsletter, June 12, 2013 - CCRCs Aren't Going Away, Sellers are Taking Advantage of a Truly Seller’s Market, CNL Healthcare Properties Made its First Plunge into the Skilled Nursing Sector

 

Bringing You Senior Care M&A Deals and News
 

June 12, 2013 Issue:

 

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
CCRCs Aren't Going Away. With the Great Recession now in the rear-view mirror, entrance-fee CCRCs have strengthened and are here to stay.. Read More

 

Recent Senior Care M&A Deals

Long-Term Care

Acquirer

Target

Price

Silverado Senior Living

3 Memory Care Facilities- 2 in IL and 1 in WI

N/A

Aviv REIT

2 Post-acute and long-term care SNFs

$6.2 million

CNL Healthcare Properties

6 SNFs in AK

$56.4 million

The Ensign Group

1 ALF in CA

N/A

The Ensign Group

1 ALF in UT

N/A

 

Stat of the Week

With an increasing number of high-quality single property and “mini-portfolios” on the market this year, it is no wonder why sellers are taking advantage of a truly seller’s market. In the two-year period during 2011 and 2012, what are known as “A” quality assisted living communities, including one-off sales and portfolios, sold at a significant premium to the rest of the market, which we refer to as “B” properties, although some lesser quality was most likely included in that group. The average price for “A” assisted living communities was approximately $240,500 per unit in that two-year period, which was more than double the average price of $111,600 per unit for the “B” properties. One of the drivers of this price differential was the average operating margin (or EBITDA margin). For the A properties, the average margin was 34%, compared with 24% for the B properties, and that higher level of cash flow has an obvious impact on value...... 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

CNL Healthcare Properties, a private REIT, has made its first plunge into the skilled nursing sector. Previous acquisitions have centered more on the private pay seniors housing side of the business, but perhaps management realized there was the opportunity for some higher returns in the SNF market. In the current transaction, CNL has purchased six skilled nursing facilities in Arkansas with a total of 868 licensed beds. The purchase price was $56.4 million, or about $64,975 per bed. The average age is about 23 years, but two of the facilities were built in the past five years, and the others have completed renovations between 2009 and 2011. Arkansas-based Senior Living Centers will lease the properties under a long-term lease, and these will join the 17 other SNFs the company already manages in Arkansas with more than 1,600 beds.....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

Everyone knows that HUD interest rates are about the lowest you can get, especially for skilled nursing facilities. And unless you want to take a lot of capital off the table, HUD is certainly considered by many lenders, unless they need funding in weeks or a month or two. Even for that, many HUD lenders will provide bridge financing until the HUD approvals come in. The savings from a HUD refinancing can be substantial. A case in pint was four skilled nursing facilities refinanced by Capital Funding for a total of $28.06 million, or $48,800 per bed. The annual debt service savings on the refi came to $1.038 million, or $1,800 per bed. If the owner so chooses, that is an extra $250,000 per year that can be reinvested in each property that wasn’t available last year. That can go a long way to maintaining a facility’s competitiveness in its local market....Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

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.

 

Stop just banking. And start building.
Learn more.

 

Wells Fargo Capital Finance

You need a lender who can deliver every step of the way
 

Healthcare is your business. Providing financing to healthcare companies so they can run smoothly and efficiently is ours. With the Healthcare Finance team at Wells Fargo Capital Finance, you get the proven reliability of a leader, along with the knowledge and experience you want. Plus, our financing can provide cash flow to keep the business running efficiently, or extra capital to help the business grow. To help maintain the well-being of your business, let’s start a conversation today. Call us at 1-877-770-1222 or visit us online at wellsfargocapitalfinance.com/healthcare-finance.php.

 

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