The Dealmakers Forum E-Newsletter, September 4, 2013 - Will Seniors Housing Face Rising Costs, Health Care REIT Closed this Week on its Acquisition in a Joint Venture with Merrill Gardens, Acquisitions

 

Bringing You Senior Care M&A Deals and News
 

September 4, 2013 Issue:

 

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Will Seniors Housing Face Rising Costs? If the minimum wage is not cutting it for fast-food workers, the senior care industry may be next. Read More

 

Recent Senior Care M&A Deals

Long-Term Care

Acquirer

Target

Price

CNL Lifestyle Properties, Inc.

2 senior living communities

$45.85 million

The Windsor Companies

Hickory Chase

$8.26 million

Chicago Operator

Vermilion Manor Nursing Home

$3.4 million

 

Deal of the Week

Health Care REIT closed this week on its acquisition of the 20% interest in a joint venture with Merrill Gardens. It already owned an 80% interest in the JV, which owned 38 mostly independent living communities with 4,400 units in eight states, and it paid Merrill Gardens $173 million for that interest, inclusive of pro rata mortgage debt of $74 million. These assets have now been triple net leased to Emeritus Corporation, and since there are concentrated in Washington and California, it should be a relatively easy transition for Emeritus..... 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

Herbert J. Sims was able to place with a bank a $19.175 million loan for the phase II expansion of a CCRC in Wilmington, North Carolina. The expansion will include 27 independent living units, a wellness center and indoor pool, a new auditorium and the renovation of existing areas of the community. Sims was able to secure a 10-year loan at a fixed rate of 3.09%, which was about 140 basis points lower than the next lowest equivalent proposal. In addition, the loan was structured with a second note that was floating rate, benefitting from the current historic low short-term interest rates, with the flexibility to pay it down with new entrance fees. Construction has already begun on the expansion.......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

Although the acquisition remained quite strong in the first half of 2013, average per-unit and per-bed values have declined across the board compared with calendar year 2012. For the 12 months ended June 30, 2013, assisted living had an average price of $148,200 per unit, compared with $164,000 in 2012, but the average cap rate declined from 8.7% in 2012 to 8.4% in the most recent four quarters. Skilled nursing also saw a decline in pricing, from $60,400 per bed in 2012 to $55,600 per bed for the 12 months ended June 30. The average cap rate, however, increased to 12.9% from 12.5%. Although the recent 125 basis point spike in interest rates since May was not a factor in these cap rates or values, it may be a factor in the second half of the year.....Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

Submit a Deal

Do you have a particularly interesting acquisition or financing that you would like featured? While we can’t guarantee that it will be our deal of the week, we would like to hear from you, especially if it is a transaction that has not been well publicized. Please send your deal to monroe@levinassociates.com

 

Oak Grove Capital

Oak Grove is a nimble, non-institutional mortgage lender with an experienced, dedicated Seniors Housing group focused on high-quality service and delivery. We don’t aim to be the biggest, but we work hard to be the best, using a highly personalized approach that simply outperforms other lenders. We have decades of experience working closely with Fannie Mae, Freddie Mac and HUD. Our clients have learned they can depend on it. That’s why 80% of our business is repeat business. See it for yourself.  Call us at 630-399-0140 or visit us online at http://www.oakgrovecap.com/loan-products/senior-housing/.

 

Grandbridge Real Estate Capital's Seniors Housing and Healthcare Finance Capabilities   

Grandbridge Real Estate Capital's dedicated Seniors Housing team offers seniors housing owners construction, nonrecourse acquisition/bridge and permanent financing options nationwide. 

The team has more than 50 years of combined seniors housing experience, and has closed more than $5 billion in seniors housing loan, sales and advisory transactions over the past 10 years. 

A subsidiary of Branch Banking and Trust Company (NYSE: BBT), Charlotte, N.C.-based Grandbridge has a proprietary lending platform, BB&T Real Estate Funding, as well as core balance sheet capabilities, which complement the firm's broad investor base that include Fannie Mae, Freddie Mac, FHA, insurance companies, CMBS investors, pension funds advisors, commercial banks and capital market investors.
For more information visit www.grandbridge.com/seniors_housing.

 

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