The Dealmakers Forum E-Newsletter, November 13, 2013 - Third Quarter Earnings Wrap-Up, Capitol Senior Housing (CSH) Recently Purchased a Property in Herndon, Virginia

 

Bringing You Senior Care M&A Deals and News
 

November 13, 2013 Issue:

 

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Third Quarter Earnings Wrap-Up. After the Emeritus warning in September and Capital Senior Living's less than stellar quarter, we were fearing the worse and it wasn't too bad. Read More

 

Recent Senior Care M&A Deals

Home Health Care

 

 

Acquirer

Target

Price

AxelaCare Health Solutions

SCP Specialty Infusion

N/A

Almost Family, Inc.

SunCrest HealthCare

$75.5 million

Kindred Healthcare, Inc.

Senior Home Care, Inc.

$95 million

Long-Term Care

 

 

Acquirer

Target

Price

Private Owner/Operator

Radius Healthcare Center

$4 million

Aviv REIT, Inc.

Five SNFs

$42.2 million

Kindred Healthcare, Inc.

Nine Nursing Centers

$83 million

 

Deal of the Week

Capitol Senior Housing (CSH) recently purchased a property literally in its back yard. Located in Herndon, Virginia, this 80-unit independent living community was built in 2008 but has suffered from below par occupancy at lose to 70%. While cash flow positive, the current revenue stream did not merit a price of $15.6 million, or $195,000 per unit, but it wasn’t purchased for the current operations. The community has no kitchen, so CSH plans to invest about $750,000 to build one since a dining are already exists. The in-place “no-service” monthly rates are about $2,200, which will increase to $3,200 for full service when the kitchen is completed. That is still believed to be below market for the area. Once stabilized and the marketing kicks into high gear, rents are expected to increase to an average of $4,000. At that level and at 95% occupancy, we estimate that EBITDA would grow to $1.6 million, and using a 7% cap rate produces a future value of $22.85 million. CSH is bringing in The Arbor Group to manage the community, and local broker Avison Young represented the seller..... 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

Cambridge Realty Capital just reported they arranged conventional financing in the amount of $65 million for a portfolio of eight skilled nursing facilities owned or operated by Ohio-based Premier Health Care. All of the properties are located in Ohio. It was complicated because Premier owned and operated five of the properties, while two are owned by Premier but operated by a different company, and the last one is owned by a third party and operated by Premier. There are 827 beds, so the mortgage amount of $57.5 million comes to $69,500 per bed, and there was also a $7.5 million working capital loan included in the financing. GE Capital was the lender for the refinancing.....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

For the last two years, the average net operating income (NOI or EBITDA) per unit for assisted living communities sold has been at its highest level ever, even topping the average in the 2007 bull market of $11,100 per unit. In 2012, the average EBITDA for assisted living communities sold was $12,100 per unit, which was actually a decline from $12,700 in 2011. It was these high levels of EBITDA that drove the market to such high average prices per unit, and not cap rates, in 2012, even though there was a small drop in cap rates.  From 2008 through 2010, the average NOI per assisted living unit sold ranged between $9,900 and $10,800, so the recent years have seen a nice jump.....Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

REIT Deal of the Week

HealthLease Properties REIT (TSX: HLP. UN) continues to grow and fund. The average age of its portfolio of senior care properties is under 10 years, tops in the REIT world, and it just raised another C$59 million in a five-year convertible debenture issue. The debentures carry an interest rate of 5.75% and are convertible into HealthLease trust units at C$14.00, representing a significant 44% premium. It now has 12 properties in Canada and 32 in the U.S. with a total of 4,335 beds. This is a REIT worth watching...Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

Expert Opinion: A Conversation with Justin Hutchens

In this "Expert Opinion" interview, Justin Hutchens, CEO and President, National Health Investors, discusses healthcare REITS, NHI, deal volume, RIDEA joint ventures, changes, and more....Watch the video

 

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.
http://www.beechstcap.com/thank-you-seniors.

 

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