The Dealmakers Forum E-Newsletter, July 17, 2013 - Assisted Living Concepts Deal Finally Closes, Illinois Acquisition Values for Skilled Nursing Facilities, Mortgage Lenders

 

Bringing You Senior Care M&A Deals and News
 

July 17, 2013 Issue:

 

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Assisted Living Concepts Deal Finally Closes. After a sales process that lasted nearly two years, private equity firm TPG will get to work.... Read More

 

Recent Senior Care M&A Deals

Long-Term Care

Acquirer

Target

Price

HealthLease Properties Real Estate Investment Trust

12 Senior Housing and Care Properties

$190.6 million

The Ensign Group, Inc.

Mountain View Rehabilitation and Care Center

N/A

 

Deal of the Week

Illinois is not known as a state with high acquisition values for skilled nursing facilities, especially if the real estate is somewhat old. But when located in the greater Chicago market, and if the potential cash flow is quite high, demand and value can increase. Such was the case with a 292-bed skilled nursing facility recently sold by Ryan Saul of Senior Living Investment Brokerage. Not only did the sale, at just over $135,000 per bed, come in at a record price per bed for the state, but it closed in under 50 days from time of listing. The previous record was in 2011 at $115,000 per bed, also sold by Senior Living Investment Brokerage. In the current sale, occupancy was about 89% with a 36% quality mix, which the buyer plans to improve. Because costs were above average, the pro forma cap rate was about 11.75%, but was just over 8% based on in-place cash flow..... 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

Unlike Illinois, New York State often has very high values for skilled nursing facilities, especially if they are relatively new when Medicaid capital cost reimbursement can be over $100,000 per bed. Housing & Healthcare Finance recently completed a HUD refinancing of a greater New York City nursing facility that had been part of a larger health system that ran into severe financial problems at the parent level. After obtaining conventional financing after purchasing it from the not-for-profit seller a few years ago, the new owners just refinanced the 288-bed facility for a loan amount of $30.774 million, or $106,750 per bed. The facility was built in 1994 and current occupancy is 96%. With a new interest rate of 2.90% plus the mortgage insurance premium, and a typical long-term HUD amortization, the operator will be saving a lot of money.....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

With all the new development that is beginning to start up now that the housing and stock markets have rebounded from the recession, developers may want to keep in mind what their all-in costs are compared with the acquisition market. In 2012, the average price per square foot for seniors housing acquisitions (assisted and independent living combined) was a near-record $161 per square foot. The record was set in the last bull market in 2007 at $168 per square foot. The price per foot in 2011 was similar, and a huge jump from 2010 when it dropped to $121 per foot. With the high prices being paid in today’s aggressive acquisition market, we expect the average price per square foot will remain high and may even set a new record in 2013.....Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

AdCare Health Reports

After months of delays, AdCare Health Systems finally came out with its restated quarterly financial statements from 2012, and the news sent its shares soaring by 18%. That was short-lived, however, as most of that gain was wiped out by the end of the day. The company’s first quarter results for 2013 will be released at the end of July, followed by the second quarter results in early August. Kudos to their new CFO, and now we wait to see about the pending tender offer.....Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

Beech Street Does Senior Housing the Right Way

Few mortgage lenders offer as extensive a selection of seniors housing financing solutions for independent living, assisted living, and skilled nursing communities as Beech Street Capital. And even fewer are capable of executing those solutions with as much competence and certainty. Our seniors housing experts tailor each transaction to meet the needs of our borrowers, drawing on Fannie Mae, Freddie Mac, FHA, and non-agency sources. This unique combination of selection, speed, and service explains why Beech Street has catapulted into the front ranks of Fannie Mae and Freddie Mac, and a rapidly growing HUD business in just three short years. Beech Street has all the flexibility you would expect from a privately owned, entrepreneurial company with the experienced, knowledgeable, and well-connected team to match. Borrowers depend on Beech Street to come up with solutions that really work for them.
http://www.beechstcap.com/thank-you-seniors

 

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.

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