The Dealmakers Forum E-Newsletter, September 11, 2013 - New State Ranking For Skilled Nursing Facilities, Sims Mortgage Financing Closed a $41 Million Refinancing of Three Existing HUD Loans, CHS Purchased an Under Performing Living Community in CA

 

Bringing You Senior Care M&A Deals and News
 

September 11, 2013 Issue:

 

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
New State Ranking For Skilled Nursing Facilities. You may be surprised which states came out on top, and which states were at the bottom. Read More

 

Recent Senior Care M&A Deals

Home Health Care

Acquirer

Target

Price

Cigna

Alegis Care

N/A

Long-Term Care

Acquirer

Target

Price

Capitol Seniors Housing

Olive Grove

$16.25 million

Aviv REIT, Inc.

SNF in TX

$3.5 million

 

Financing of the Week

Sims Mortgage Financing closed a $41 million refinancing of three existing HUD loans that had been used to renovate a 13-story, 409-bed nursing facility on the Upper West Side of Manhattan. The old loans had a weighted average interest rate of 8.33%, and the new loan will have a maturity in 2019 which matches the maturity of the loans being refinanced. Apparently, New York doesn’t like the maturity of new loans to exceed the maturity of the loans being paid off. The proceeds will be used to pay off all existing loans, issuance costs, the establishment of a $2.055 million repair escrow and an additional $3.0 million for other repairs and replacements. Over the life of the loan, the cash interest savings will exceed $13.0 million, and the present value savings will be about $10.8 million. Not bad.... 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

Capitol Seniors Housing (CSH) purchased an underperforming independent living community located in California with occupancy below 70%. The campus has two buildings with a total of 212 units, and one has lower occupancy than the other. It is the less stabilized building that will be converted to assisted living with a secure memory wing on the first floor. CSH paid just $76,600 per unit for the property, but when the changes and other improvements are completed, the all-in-cost will be closer to $100,000 per unit. The good news is that if all goes according to plan, the community with be worth more than $150,000 in two years. CBRE arranged a $13.8 million bridge financing to close the deal......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 upper quartile price per unit for seniors housing in the M&A market was a healthy $171,800. That means that 25% of the independent and assisted living communities sold for a price above that. In 2011, the upper quartile was higher at $208,200 per unit. The bottom quartile is usually about 50% lower than the upper quartile price. In 2012, the lower quartile had a price of $93,500 per unit, meaning that 25% of the sales came with a price per unit under $93,500. In 2011, the lower quartile was $84,200 per unit.....Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

Stock Market News

On September 6, Emeritus Corporation announced that its earnings guidance for 2013 was cut by about 7%, which implies a much larger decline of about 13% for the second half of 2013 alone. Apparently, the company’s forecasted occupancy trends may be the culprit, based on fewer tours and deposits in August than expected, which should impact the bottom line later in the year. Did the Frontline story have an impact on the consumer? It is too early to tell, but that would have been an unusually fast reaction. Investors, however, did have a very fast reaction, sending the shares of Emeritus plunging by 13.4% on the morning of the announcement to a 52-week low of $18.81 per share. They have since recovered a little to $19.40 per share, but the damage was done.......Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

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/.

 

GE Capital, Healthcare Financial Services provides tailored healthcare real estate financing solutions

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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.
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