The Dealmakers Forum E-Newsletter, March 26, 2014 - Skilled Nursing Facility in Pennsylvania Worth, Is the Florida Market Coming Back, Size Makes a Big Difference in Value for Skilled Nursing Facilities

 

Bringing You Senior Care M&A Deals and News
 

March 26, 2014 Issue:

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Senior Care in Spain. For the aged, care is expensive everywhere......... Read More

 

Recent Senior Care M&A Deals

Long-Term Care

 

 

Acquirer

Target

Price

NorthStar Realty Finance Corp.

80 senior care facilities

$1.05 billion

Regional owner/operator

Wedgewood Gardens

$2.3 million

NorthStar Healthcare Income, Inc.

100-unit ALF

$12.5 million

 

Deal of the Week

So, what is a 605-bed skilled nursing facility in Pennsylvania with 99 four-bed ward rooms really worth in this market? And by the way, it was losing $16,000 per day despite occupancy of 90%. And did we mention a union that was not willing to negotiate to try to get the financial situation a little better? The county-owned facility was hoping to get above $25 million, or more than $41,000 per bed, but given the size, the room layout and the negative cash flow, it is not an easy asset to value. Quite frankly, we are not sure how many operators really want to take on a facility of that size, but there were multiple offers and two final bidders chosen for a “playoff.” A group with operations in New York and New Jersey that wanted to break into the Pennsylvania market was chosen, and the price came to approximately $62,000 per bed. The county, represented by Mark Myers and Joshua Jandris of Marcus & Millichap, must have been ecstatic, but we are not sure how the union feels right now......... Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

Development of the Week

Is the Florida market coming back or what? In Boca Raton, a 369 unit/bed entrance-fee CCRC is underway at a cost of approximately $250 million, or approximately $675,000 per unit/bed. To be known as Sinai Residences of Boca Raton, the community will have 237 independent living units, 48 assisted living units, 24 memory care beds and 60 skilled nursing beds. More than 85% of the IL units have been reserved, including 30 sales in February alone, and unlike the market a few years ago, the future residents won’t have the problem selling their homes. The community, sponsored by the Jewish Federation of South Palm Beach, sits on 22 of its 100 acres. Greenbrier Development is the developer of the community and Life Care Services will be the manager. Back in 2011, Herbert J. Sims raised $9.45 million in seed capital for the pre-development costs and is expected to place a $214 million bond issue sometime in the second quarter...........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

Size makes a big difference in value for skilled nursing facilities. One has to look no further than the relationship between the average price per bed and the total square feet per bed. In 2013, there was a perfect correlation, with the average price per bed rising as the square feet per bed increased. However, there was a significant break between those nursing facilities with less than 300 square feet per bed, which sold for average prices below $42,000 per bed, and those with 300 square feet per and higher, which sold for average prices above $66,700 per bed. More details and other statistics will be available in the 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

 

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.

 

Upcoming Interactive Webcast:

Urgent Care Centers: An Entrepreneurial Opportunity
Thursday, March 27, 2014, 1:00 pm ET

Urgent care centers are popping up in cities and all over suburbia. Hospitals are getting into the business, doctors have started their own, and strategic buyers (provider groups, venture capitalists, private equity firms) are licking their lips. Buyers are swallowing up small centers in order to build large-scale platforms in this increasingly profitable sector. Some current owners are looking to grow these businesses to a national level. Go to http://www.levinassociates.com/conferences/1403b-online-conference or call 800-248-1668 to register.

 

 

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