The Dealmakers Forum E-Newsletter, October 2, 2013 - Government Shutdown Means Tighter Future Budgets, MBK Senior Living Has Expanded Again, Publicly Traded Skilled Nursing Companies are Outperforming the Private-Pay Seniors Housing Companies

 

Bringing You Senior Care M&A Deals and News
 

October 2, 2013 Issue:

 

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Government Shutdown Means Tighter Future Budgets. Depending on how long the shutdown plays out, it only heightens the reality that budget cuts will come at some point, impacting all providers who receive federal payments. Read More

 

Recent Health Care M&A Deals

Home Health Care

 

 

Acquirer

Target

Price

Ecumen

Covenant Companies

N/A

Long-Term Care

 

 

Acquirer

Target

Price

Blue Harbor Senior Living

Schenley Gardens

$15.675 million

 

Deal of the Week

MBK Senior living has expanded again in Colorado, this time with the acquisition of an 82-unit community located in Loveland, which is about 50 miles north of Denver. This is MBK’s third community in Colorado, and it offers independent living, assisted living and memory care services, and apparently has some of the largest IL apartment units in the market. The purchase price was just under $240,000 per unit, but there is plenty of upside. The community is basically less than six years old, and currently has 58 independent living units, 14 assisted living units and 10 private memory care units. The memory care units are quite large, and apparently the IL units are some of the best that MBK has in its portfolio, with some two-bedroom units having up to 1,400 square feet with first class finishes. And the community is 100% occupied with a waiting list, which will provide MBK with a lot of flexibility. A high price for a quality community, but one where the value will be going even higher..... 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

Although it closed several weeks ago, details have just emerged regarding a total of $214 million in loans provided to a California-based skilled nursing owner, Schlomo Rechnitz, by The PrivateBank and Trust Company as sole lead arranger and administrative agent and CapitalSource Bank as joint bookrunner. The credit facilities are secured by 17 properties with 1,919 licensed beds and include stand-alone skilled nursing and assisted living facilities as well as properties that have both skilled nursing and assisted living. The loan-to-value was below 75%, and the total debt was about $111,500 per licensed bed. There were other banks that participated in the credit syndication, but this is one of the largest bank financings in the skilled nursing sector we have seen in a while....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 three quarters behind us in 2013, for the first time in a while the publicly traded skilled nursing companies are outperforming the private-pay seniors housing companies. The Ensign Group is leading the entire pack with a price gain of 51% so far this year, with Kindred Healthcare a distant second with a nine-month increase of 24%. The Ensign Group is the only senior care stock to hit a new 52-week high in September, and it just keeps on going. Capital Senior Living is leading the seniors housing stocks with a year-to-date gain of 13%, while Emeritus Corporation is down 25% on the year. The worst performing stock of the year, so far, is Skilled Healthcare Group, which has declined by more than 31% this year despite the savings it expects from its HUD refinancing program.....Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

Big Deals on the Way?

Seniors housing and care M&A transaction volume so far this year is up from the first three quarters of 2012, as is the dollar volume, but we could be getting a significant boost from several transactions in the market that will either close or get announced during the fourth quarter. These are all well over $100 million each, with a few getting close to $500 million. With the spike in interest rates last May, despite the recent 30 basis point drop, sellers may not be getting what they had hoped for, but it is still a robust market with multiple bidders for attractive portfolios. But a sub-6% cap rate? Not anymore......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.

 

Beech Street does Seniors Housing and Long-Term Care financing the right way

Our experts customize each transaction to deliver the best execution for our borrowers through Fannie Mae, FHA and non-agency sources. We’ve secured the loyalty of our borrowers with fast work, flexible solutions, and outstanding service, even after closing. Discover the Beech Street difference now. And we’ll put our horsepower to work for you.
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