The Dealmakers Forum E-Newsletter, August 28, 2013 - Skilled Nursing Facilities Still in High Demand, Berkadia Commercial Mortgage Originated Financing with Freddie Mac, Care Investment Trust, Average Occupancy Rate for Seniors Housing Communities

 

Bringing You Senior Care M&A Deals and News
 

August 28, 2013 Issue:

 

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Skilled Nursing Facilities Still in High Demand. Despite concerns over reimbursement and their role in the health care market, SNFs continue to obtain high prices in the acquisition market. Read More

 

Recent Senior Care M&A Deals

Long-Term Care

Acquirer

Target

Price

Texas-based Company

Gazebo Terrace Convalescent Home

$1.275 million

Care Investment Trust

2 assisted living communities

$21.90 million

Bupa

Richmond Care Villages

N/A

The Carlyle Group

Alloheim

N/A

 

Financing of the Week

In one of the larger deals to date, Berkadia Commercial Mortgage originated a $172.1 million financing with Freddie Mac for a portfolio of four seniors housing communities with 873 units owned and operated by Brookdale Senior Living. The communities are located in Illinois, Missouri, New York and Ohio and have 716 independent living units and 157 assisted living units. The seven-and 10-year loans were floating rate with 30-year amortizations, and they had loan-to-values between 59% and 75%. The loan amount came to $197,100 per unit, perhaps reflecting the 92% average occupancy rate.... 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

As we mentioned in the August issue of The SeniorCare Investor, Care Investment Trust is definitely not out of the seniors housing acquisition market. Last week, Care and New York-based Premier Senior Living purchased two relatively new assisted living communities in New York for $21.9 million, or a robust $219,000 per unit. The two buildings have 51 and 49 units, but the license is for 131 beds. Based on the licensed beds, combined occupancy is 97%, which seems to be driving the value. What is unusual about such a high-value deal is that about 25% of the census is covered by the New York Medicaid waiver program. That just shows how strong the cash flow must be. Care will be leasing the properties to Premier for an initial 12-year lease plus two five-year renewal options.....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

In 2012, the average occupancy rate for seniors housing communities sold (assisted and independent living) was just 85% (compared with 89% in 2011). While there are other reasons for the sale mentioned above to be $62,200 per unit higher than the average per-unit price in 2012 of $156,800, one reason has to be the above-average occupancy rate of 97%. Even though some lenders will underwrite based on a maximum of 95% occupancy (or even lower), buyers are attracted to communities not just with stabilized occupancy, but stabilized occupancy that is at the high end, which shows local market strength. It also demonstrates that there may be room for price increases, which contributes to the higher valuation in the market...Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

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.

 

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, President and COO, 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