The Dealmakers Forum E-Newsletter, March 19, 2014 - Average Price Per Bed Sales, Campus in Portland, Oregon's Current Performance was Good Enough to Take it to Market for Refinancing

 

Bringing You Senior Care M&A Deals and News
 

March 19, 2014 Issue:

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Senior Care M&A Market. Every year, it starts with the average price per bed and unit, and our Senior Care Acquisition Report then explains why the changes occurred........ Read More

 

Recent Senior Care M&A Deals

Long-Term Care

 

 

Acquirer

Target

Price

Private Purchaser

14 retirement residences

$59.4 million

AEW Capital Management

Balfour Senior Living Communities

$103.775 million

Pacifica Companies

St. Andrews Memory Care

$10 million (est)

American Realty Capital Healthcare Trust

Lakeside Assisted Living

$13.1 million

 

Deal of the Week

As readers know by now, the average price per bed in the skilled nursing market set a new record in 2013, driven mostly by an increase in high-priced properties and portfolios, specifically those that sold for more than $100,000 per bed. We didn’t think 2014 would be able to match 2013, but with a few more sales like this one, you never know. A private owner/developer sold his four-year old, 108-bed skilled nursing facility outside Denver, Colorado for approximately $268,000 per bed. As far as we can tell, that is a record per-bed price, but one we may see again as more properties like this come on the market. First, it is new with occupancy above 90%. Second, it is not certified for Medicaid, all patient rooms are private and the census is about 50% Medicare, with the rest insurance and private pay. Third, with the new construction, there is more than 700 square feet per bed. And the cap rate was near 11.5% based on estimated 2013 EBITDA. This is a great property for the buyer’s portfolio, and we are sure Genesis HealthCare would like more of these. Evans Senior Investments 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

A large retirement living campus that opened its first building in 2004 and the second one in 2009, and with two-thirds of the units independent living, might be at risk of running into financial difficulties given the timing of the construction. While we can assume the fill up for the second building was slow, overall occupancy at this campus in Portland, Oregon is currently 95%, up 15% since 2011. The campus has 186 independent living units, 91 assisted living units and 16 memory care units in its two buildings. The current performance was good enough to take it to market for a refinancing, which is what they did, securing $49.3 million in new debt with Fannie Mae. The 10-year loan is fixed rate, amortizes over 30 years and is 75% loan to value, putting the property value at nearly $225,000 per unit. Leisure Care Retirement Communities manages the buildings and is a partial owner, and Heidi Brunet of Berkadia Commercial Mortgage placed the loan..........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

It was a strong year for those seniors housing communities that were predominantly independent living. They set a new record for the average price paid per unit of $191,950 in 2013, besting the old record of $174,500 per unit set in 2007. In addition, the upper quartile price was $262,200 per unit, meaning that 25% of the IL communities sold for a price above that level. At the other end of the spectrum, the lower quartile price was $125,900 per unit, meaning that 25% of the IL properties sold for a price below this level. All of the 2013 M&A statistics will be available in our soon-to-be-published 19th edition of The Senior Care Acquisition Report........ 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 Michael Vaughn 

In this "Expert Opinion" interview, Michael Vaughn, Senior Vice President and Head of the FHA Healthcare Group at Walker & Dunlop, discusses acquisition financing, HUD debt, construction, changes, portfolios and more......... Watch the video

 

GE Capital, Healthcare Financial Services provides tailored healthcare real estate financing solutions

Responding to our customers’ needs, GE Capital, Healthcare Financial Services provided more than $2.8 billion in financing for senior housing, skilled nursing and medical properties in 2013. That kind of commitment—along with our innovative, individually tailored financing solutions—is what makes us leaders in healthcare real estate financing. Stop just banking. And start building.

Learn More.

 

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.

 

 

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