The Dealmakers Forum E-Newsletter, April 16, 2014 - Meridian Realty Advisors Built a 52-unit Memory Care Facility in the Austin, Texas Metro Market, Portfolios in the Acquisition Market

 

Bringing You Senior Care M&A Deals and News
 

April 16, 2014 Issue:

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Seniors Housing Occupancy Holding Firm. Despite a nasty winter, occupancy did not drop in the first quarter, which bodes well for the rest of the year........... Read More

 

Recent Senior Care M&A Deals

Home Health Care

 

 

Acquirer

Target

Price

ViaQuest, Inc.

Three Indiana Health Organizations

N/A

Long-Term Care

 

 

Publicly traded chain

Aspen Grove

$14.6 million

Regional operator

Shelbourne Personal Care

$2 million

 

Deal of the Week

Just before American Realty Capital Healthcare Trust listed its shares on NASDAQ under the ticker “HCT” on April 7, the REIT closed on one of its largest senior care purchases to date. The acquisition included 11 properties with 937 beds/units, 10 of which were skilled nursing facilities or skilled nursing with assisted living, with one stand-alone independent living in Iowa with 67 units. The purchase price was $104 million, or $111,000 per bed/unit, and a cap rate close to 11.3%. Overall occupancy for the portfolio was 82%, and the properties are located in Missouri, Iowa, Wisconsin and West Virginia. A regional company sold its entire portfolio, and HCT has leased the group to Illinois-based Platinum Health Care. Platinum already has a presence in two of the states, and is known for purchasing underperforming properties or those with below market occupancy rates and turning them around. This portfolio has actually been performing decently, with a 22.5% EBITDA margin (after a management fee, which in this case will be mostly profit) on $52.4 million of revenues. In this acquisition, we suspect they will work on improving the overall census and focus on increasing the Medicare census, which is about 20% of revenues. ........... 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

Meridian Realty Advisors built a 52-unit memory care facility in the Austin, Texas metro market that is licensed for 90 beds. The community opened in April 2013 and the lease-up exceeded expectations. Meridian has now placed a floating rate loan with MidCap Financial that has a maximum term of 42 months. The initial loan amount was $13.5 million, or $259,600 per unit, but it comes with an additional earn-out up to $2.25 million based on financial performance. That could put the total future loan amount at just over $300,000 per unit ($175,000 per bed). California-based Silverado Senior Living is the manager of the property............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

People often talk about a “portfolio premium” in the acquisition market, where a buyer will pay a premium for a group of properties over what they would pay for a single property of the same quality. The problem is that in looking at portfolio sales vs. single asset sales, there is often a significant difference in quality. In 2012, assisted living portfolios sold on average for a 54% premium to single asset sales. The main reason was the large number of high-end portfolios that were sold. By 2013, this portfolio premium declined to just 9%. The primary reason was that there were very few portfolios in 2013 that sold for more than $200,000 per unit, while there were 13 one- and two-property sales above $200,000 per unit, including a few over $300,000 per unit. High quality properties can sway the numbers for portfolios or single asset sales.........Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

Retirement News 

In a surprise announcement on Monday, Health Care REIT disclosed that George Chapman, who has run the company for the past 18 years, has resigned from his positions at Chairman, President and CEO effective immediately. While sudden, the announcement stated it was an acceleration of a succession planning process that was already in the works between Chapman, who is 66, and the board. Chapman had been CEO for 18 years and was instrumental in Health Care REIT’s significant growth in the past five years. He was just the third CEO in the REIT’s 44-year history, and that says something about stability. He has been replaced as CEO by Tom DeRosa, who has been a board member for 10 years, and replaced as Chairman by Jeff Donahue, who has been the REIT’s independent lead director, thus splitting the two functions. Coincidence or not, this represents the second sudden departure of a CEO of the Big Three REITs. Chapman, who we affectionately called “Georgie” from time to time, will be missed by his tenants and friends in the industry. We wish him well in retirement.     .........Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

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 - Just Published!
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. Order by April 30th and get our Senior Care M&A Market Review and 2014 Outlook webcast for FREE ($147 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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