The Dealmakers Forum E-Newsletter, August 21, 2013 - Interest Rate Rise Changing the Shape of the Seniors Housing M&A Market, Capital One Financial Corporation Announced an Agreement to Purchase Beech Street Capital

 

Bringing You Senior Care M&A Deals and News
 

August 21, 2013 Issue:

 

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Interest Rate Rise Changing the Shape of the Seniors Housing M&A Market. With the sharp increase in interest rates, and the resulting plunge in REIT share prices, the dynamics of the M&A market are changing, and for some deals, cap rates will rise. Read More

 

Recent Senior Care M&A Deals

Long-Term Care

Acquirer

Target

Price

Prestige Healthcare

15 skilled nursing facilities

N/A

Diversicare Healthcare Services Inc.

4 skilled nursing facilities

N.A

HealthLease Properties REIT

Wellbrooke of Avon

$17.32 million

Titan Real Estate Investment Group

Waldenbrooke Estates

$10.5 million

 

Deal of the Week

Capital One Financial Corporation announced an agreement to purchase Beech Street Capital, an originator and servicer of Fannie Mae, Freddie Mac and HUD real estate loans. Capital One made a big splash into seniors housing lending two years ago, but more as a balance sheet lender with its $296 billion of assets. Now, it will expand into the agency market at a time when that market is undergoing some changes. Founded just four years ago, Beech Street originated approximately $4 billion in new loans in 2012, and it currently services a loan portfolio of about $10 billion. The deal is expected to close in the fourth quarter.... 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

GE Capital, Healthcare Financial Services announced it provided $60.0 million in financing to ValStone Partners to refinance a portfolio of 19 senior living properties with 802 units. The five-year floater comes with up to an additional $6.0 million available for capital expenditure drawdowns, a nice feature for ValStone and its operating partner, Senior Management Advisors. Most recently, the two joint venture partners purchased two large communities in Delray Beach, Florida in early 2013 that they were going to reposition and re-brand under their “Grand Villa” umbrella.....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

One of the reasons why the average price per bed for skilled nursing facilities in 2012 came close to matching the record set in 2010 was because the average operating margin for those facilities sold was the lowest it had been in more than five years. In 2012, the average EBITDA margin (after a 5% management fee) for SNFs sold was 11.4%, compared with 8.2% in 2011. Even though it is the absolute level of cash flow that drives value and not operating margin, usually when the margin improves, so does the value. Obviously, there are skilled nursing facilities with much higher margins than this average, and most likely much higher levels of cash flow, but on average the sector operates with lower margins than most people would believe. And these are before capital costs are included, which usually take the net margins down to low single digits....Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

In Memoriam

Last week, the senior care industry lost one of its pioneers and major personalities. Andre Dimitriadis, the founder of LTC Properties in 1992, died after a long illness. Prior to founding LTC, he was the Chief Financial Officer of the former Beverly Enterprises, at the time the largest skilled nursing company in the country, and held the same position at American Medical International and Western Airlines. Among his many accomplishments, he held a Masters degree in computer science from Princeton University and a Ph.D. in Economics from New York University. Our thoughts are with his family.....Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

 

Healthcare Realty Brokerage provides owners with a sound exit strategy at the appropriate time.
We specialize in the confidential sale of senior housing, long-term care, and medical office buildings nationwide. Having successfully represented both For Profit and Non Profit owners we have the ability and track record to get top dollar for your facility. When you choose HRB you get access to thousands of qualified purchasers within the seniors housing industry along with step by step guidance through the sale process. Each situation is unique therefore we tailor a strategy specific to your goals.
 

Wondering what your facility is worth? Contact us for a free, no obligation valuation.

Go to: http://healthcarerealtybrokerage.com/

 

Upcoming Interactive M&A Webcast:
Skilled Nursing Facilities: Buying, Selling and Valuing
Thursday, September 12th, 2013, 1:00 pm ET            
The skilled nursing market is dead, right? Medicare and Medicaid reimbursement uncertainties are keeping buyers out of the market and prices low, right? All wrong. It is time to think again about the skilled nursing sector and the acquisition market. Find out more from our expert panel: Stephen M. Monroe (Moderator), Managing Editor and Partner, Irving Levin Associates, Inc.; Steven Insoft, Senior Vice President and Chief Financial Officer, Aviv REIT; Greg Miller, Chief Development Officer, Kindred Healthcare; and Mike Pardoll, Senior Vice President/Investments, Marcus & Millichap.

Go to http://www.levinassociates.com/conferences/1310-online-conference or call 800-248-1668 to register.

Webcast Calendar... Click here to see more