The Dealmakers Forum E-Newsletter, December 4, 2013 - ObamaCare: What Else, The Marriage of HUD and Not-For-Profit Providers Continues, Average Skilled Nurses Stats

 

Bringing You Senior Care M&A Deals and News
 

December 4, 2013 Issue:

 

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
ObamaCare: What Else? The technical problems with the ObamaCare insurance exchange roll out will be the least of its problems. Read More

 

Recent Senior Care M&A Deals

Long-Term Care

 

 

Acquirer

Target

Price

National Health Investors, Inc.

25 Independent Living Facilities

$491 million

Newcastle Investment Corp.

52 Independent Living Facilities

$1.01 billion

 

Deal of the Week

What a difference three years can make. AEW Capital Management recently sold two assisted living and memory care communities in Massachusetts for $63.25 million, or $359,300 per unit. Even though some of the memory care and Alzheimer’s units are semi-private, which would push the “per-bed” price down a bit, this is one of the most expensive deals of the year. AEW purchased the portfolio in 2010 for approximately $43 million, so its return on equity was in the stratosphere. The properties were built in 1999 and 2000 and occupancy has always been well above 90%. Other financial details have not been disclosed, but according to our records, EBITDA in 2009 was close to $3.44 million and was supposed to grow by 2% to 3% annually. If so, that would put it in the $3.7 to $3.8 million area, resulting in a cap rate of 6.0% or a little lower. HFF represented the seller, and Benchmark Senior Living and Health Care REIT were the buyers. Although expensive, this is a great addition to Benchmark’s Massachusetts portfolio.... 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

The marriage of HUD and not-for-profit providers continues. Cain Brothers recently completed the final tranche of a large refinancing on behalf of Front Porch Communities and Services (FPCS). The first part was done late last summer and involved two new HUD loans in the combined amount of $50 million with fixed interest rates of 2.73% and 2.80% that replaced an existing loan at a 5.375% rate. More recently, Cain Brothers arranged a $29.9 million HUD loan at 3.74%. Combined, all three loans have reduced the annual debt service by $2.3 million, or 32%, on the communities involved, and by 13% for the entire Front Porch organization. Because these loans are non-recourse, they are removed from the FPCS Obligated Group, resulting in much better financial ratios for the organization.  In addition, the proceeds include about $5.0 million for capital expenditures. FPCS owns and operates five rental and five entrance-fee CCRCs and manages 25 affordable housing communities and three market rate retirement communities....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 four quarters ended September 30, 2013, the average price per bed for skilled nursing transactions was $62,200, or 12% higher than the previous 12-month period and very close to the record average price set in 2010 of $62,500 per bed. In addition, for the four quarters ended September 30, the average skilled nursing cap rate was 13.0%, which is 50 basis points above the calendar year average in 2012 and just 10 basis points above the previous 12-month period. With some high-priced skilled nursing deals closing in the fourth quarter this year, we may see a new record price per bed in this market.....Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

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.

 

Long-Term Care CXO Summit, January 23-24, 2014, Red Rock Resort & Spa- Las Vegas, Nevada

The Long-Term Care Summit offers senior executives from the LTC and senior housing community an intimate environment for a focused discussion of key new drivers shaping the long-term care industry.
Benefits  of Attending:
-Personalized schedule to suit individual requirements and provide an efficient use of time
-A comprehensive directory of solution providers
-All meals and networking activities included
-Luxury five star venue
-Restricted number of delegates in order to facilitate successful networking opportunities
-Explore new ideas, strategies and technical developments with industry colleagues, experts and peers

 

Network with industry experts like:
-Alan Funk, Executive Vice President, Pomeroy Living
-Kai Hsiao, President and Chief Executive Officer, Holiday Retirement
-Dr. Laverne R. Joseph, President, Retirement Housing Foundation
-Lawrence C. Gumina, President and Chief Executive Officer, Ohio Presbyterian Retirement Services
-Christopher Murphy, Executive Vice President and Chief Operating Officer, Covenant Dove Healthcare, LLC

 

To gain a view of the event brochure, click here: http://www.marcusevans-conferences-northamerican.com/LongTermCareSummit_ILA
 

For more information regarding speaking, sponsoring or attending, please contact Laurel Zevitz at l.zevitz@marcusevansch.com
 

 

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