The Dealmakers Forum E-Newsletter, March 12, 2014 - Concerned About Pace of New Developments, Memory Care in the Assisted Living Community, High-End Skilled Nursing Facilities

 

Bringing You Senior Care M&A Deals and News
 

March 12, 2014 Issue:

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Concerned About Pace of New Developments. The new developments on the planning boards won't open until 2015 through 2018, but we should be concerned now....... Read More

 

Recent Senior Care M&A Deals

Long-Term Care

 

 

Acquirer

Target

Price

American Realty Capital

Healthcare Trust

2 senior living communities

$104.5 million

Private equity firm

Ashwood Assisted Living

$4.75 million

Aviv REIT

2 skilled nursing facilities

$13.5 million

Regional owner/operator

Windhaven Eldercare Center

$5.3 million

Abbey Manor Properties, LLC

Abbey Manor Assisted Living

$2.4 million

Diversicare Healthcare Services, Inc.

Diversicare of Big Springs

N/A

The Ensign Group, Inc.

Horizon Post-Acute and Rehabilitation Center

$9.1 million

Sabra Health Care REIT

2 skilled nursing facilities

$24.5 million

Aviv REIT

9 skilled nursing facilities

$48.5 million

 

Deal of the Week

AEW Capital Management purchased a portfolio of three adjacent communities in Louisville, Colorado for $103,775,000, or $316,400 per unit/bed. This is a very interesting “campus,” with the first component of 103 independent living units built in 2004, then 87 additional IL units were built next door in 2008. These two buildings have occupancy of 92% or better. The third piece came in 2009 when a “health care” campus was added, again next door. This includes 48 skilled nursing beds (all private pay), plus 62 assisted living beds and 28 memory care beds, some of which are semi-private. The key is that the SNF component is not certified for Medicaid or Medicare, so AEW is not looking at any government reimbursement risk. AEW assumed one note that was in place, but an existing HUD loan was refinanced with Cornerstone Real Estate Advisors, an indirect subsidiary of Massachusetts Mutual Life Insurance Company, with a $38 million, seven-year fixed-rate loan. Ryan Maconachy, Chad Lavender and Campbell Roche of HFF represented the seller, Balfour Senior Living, which will continue to manage the communities for AEW, and they also placed the financing. The proceeds from the sale will be used by Balfour to pay down debt and to cash out about 100 original equity investors. This is the third time in as many months that a life insurance company has stepped back into the seniors housing market....... 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

Memory care can be an important component of an assisted living community, especially as residents age in place. That may be one reason why Principal Senior Living, having opened a 59-unit AL community in the Kansas City, Missouri MSA a couple of years ago, has decided to add 24 memory care units. The existing building has occupancy well over 90%, so the addition seemed to be a no-brainer. Grandbridge Senior Housing provided a $9 million bridge loan to take out the existing construction debt as well as to provide the funds for the addition. The new loan is non-recourse, interest only for three years, and with extensions possible after the first three-year period. It is floating rate with a floor, and appears to provide the borrower with all the flexibility they need, including freeing up their construction line with the other lender. Once the addition is built and stabilized, Grandbridge will place the permanent financing. Richard Thomas and Laura Wildsmith of Grandbridge worked the transaction.........Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

Teaser of the Week

We spent 2013 writing and talking about the new valuations for high-end skilled nursing facilities. The average price per bed sold in 2013 hit a record at $73,200 per bed, or 17% higher than the previous record set in 2010. We have explained how Medicare beds can be “valued” at $200,000 per bed and higher in the high-priced transactions over $100,000 per bed. Now, we will soon be reporting on what may be the highest priced skilled nursing facility sale ever. And….it is not located on either coast. And….no worries about Medicaid reimbursement. Stay tuned....... Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

NEW - The Senior Care Acquisition Report, 19th Edition - Preorder Today and Get Last Year's FREE ($595 Value)!
Deals have been made. The 2014 Senior Care Acquisition Report contains private deals in this market that are frequently too small to make into financial press. Take advantage of our limited 2-for-1 offer - Preorder The 2014 Senior Care Acquisition Report by March 31st and receive The 2013 Senior Care Acquisition Report FREE ($595 value)! Now that’s a deal! Go to http://www.levinassociates.com/landing/scar19order or call 800-248-1668 to preorder today.

 

Tomorrow: Interactive Webcast:
Senior Living: New Construction Heats Up

Thursday, March 13, 2014, 1:00 pm ET
New construction is picking up in some markets after the near standstill caused by the recession, although developers seem more favorable to building needs-driven models of seniors housing—assisted living and memory care facilities—rather than independent living communities. Go to http://www.levinassociates.com/conferences/1403-online-conference or call 800-248-1668 to register.

 

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