The Dealmakers Forum E-Newsletter, January 22, 2014 - Strong January M&A Starts 2014, Chicago-based The Cahill Group has Purchased a Portfolio of 14 Skilled Nursing Facilities, Looks Like the Florida CCRC Market is Back

 

Bringing You Senior Care M&A Deals and News
 

January 22, 2014 Issue:

 

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Strong January M&A Starts 2014. After a record number of seniors housing and care acquisitions in 2013, the start of 2014 shows no slowdown. Read More

 

Recent Senior Care M&A Deals

Long-Term Care

 

 

Acquirer

Target

Price

The Cahill Group

Rosewood skilled nursing and health care

facility portfolio

$250 million

Focus Healthcare Partners LLC

Hanover Place

N/A

CNL Lifestyle Properties, Inc.

Chateau Vestavia

$18.5 million

Capital Health Group, LLC

8 senior living properties

$96.6 million

 

Deal of the Week

Chicago-based The Cahill Group has purchased a portfolio of 14 skilled nursing facilities (13 in Illinois and one in Missouri) that are branded as Rosewood Care Centers. The purchase price, which included a little more than the 14 buildings, such as a home health business, was $250 million, which comes to about $138,000 per bed. That is obviously a very high price for the region, but there are some reasons. First, we believe most of these properties were built fairly recently, meaning since 1990, which is considered new in the SNF business. Second, we believe the buyer assumed HUD debt on all but perhaps one of the buildings, and that debt can be refinanced at lower rates today, which will quickly increase the bottom line. That HUD debt may be as much as $150 million.  While we don’t have financial details yet, the in-place cap rate is most likely below 10% before any refinancing, and the price to revenues could be as high as 2.0x. After a year of several $100,000 per bed SNF sales, this is the first for a sizable 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

It looks like the Florida CCRC market is back. Ziegler just announced the $190 million financing of a new CCRC in Naples that is sponsored by Lutheran Life Communities. The 286 unit/bed community will have 31 villas, 132 independent living units, 42 assisted living units, 37 memory care units and a 44-bed nursing center. The total bond financing comes to about $665,000 per unit/bed and $327 per square foot. While not the highest in recent years, it is up there. This is a Type B CCRC, and it was 82.8% pre-sold at bond pricing. There are three different bond tranches, with an average yield to maturity of 8.035% (that is a tax-exempt yield, which we are sure excited some investors). The permanent debt is $128.295 million which matures in 2049. Lutheran Life has five communities with 1,256 units across Illinois and Indiana, and apparently local members in Illinois suggested a faith-based community in southwest Florida. They will get their wish in 2015 when this new CCRC opens, and they are more likely than others to fulfill their commitments since this is something they wanted. ......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

We are in the process of finalizing our numbers for our annual study of the acquisition market in The Senior Care Acquisition Market, 19th Edition. There have only been five times in the history of the market when the average price per bed has been above $50,000, which includes 2006 and 2007, as well as the current bull market starting in 2010. But in both 2010 and 2012, the average price per skilled bed topped $60,000, a level that had never been achieved prior to 2010. While we are confident our statistics for 2013 will put the average well above $50,000 per bed, it is possible we may top $60,000 per bed for the third time in four years. And this despite fears of Medicare rate cuts.........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 Imran Javaid

In this "Expert Opinion" interview, Imran Javaid, Managing Director, Healthcare Real Estate, Commercial and Specialty Finance, Capital One Bank, discusses CCRCs, HUD, assisted living, client flexibility, and more.......Watch the video

 

3rd Annual Senior Living 100 Leadership and Strategy Conference, February 22-25, 2014, The Ritz-Carlton, Laguna Niguel, CA    (Special Offer for DMF readers – save additional $200!)
Accelerating Disruption: Innovating for Tomorrow
Exclusively for leaders from the nation’s largest AL, IL, CCRC & Memory Care organizations
• Optimize Change -  by leveraging the shifting demographics and achievements in finance, operations and technology
• Drive Innovation – through strategic planning and decision-making from content-rich session formats
• Develop Disruptive Approaches – to better attract and serve residents, manage change and improve overall effectiveness
• Fully Implement Leader-to-Leader Learning – from this unparalled environment for high-level knowledge transfer.
For more information and to register:  www.seniorliving100.com   (Use the code SLDMN to save $200)

 

TOMORROW: Interactive Webcast:
Build or Join an ACO—Don’t Let The Opportunity Pass You By!
Thursday, January 23, 2014, 1:00 pm ET

A year ago, the Affordable Care Act directed doctors, hospitals, and other health-care providers—including long-term-care facilities—to coordinate care provided to Medicare patients through Accountable Care Organizations (ACOs). Timing can be tricky—urgent for post-acute care providers—and appropriate contracts are crucial. Go to http://www.levinassociates.com/conferences/1401-online-conference or call 800-248-1668 to register.

 

 

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