The Dealmakers Forum E-Newsletter, April 30, 2014 - Berkadia Commercial Mortgage Closed on Financing for a Portfolio for Senior Housing Properties in Different States, Acquisition Market

 

Bringing You Senior Care M&A Deals and News
 

April 30, 2014 Issue:

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Health Care REIT Sector Going Through Changes. With new CEOs at two of the Big Three REITs, the sector may be going through a generational change of sorts............ Read More

 

Recent Senior Care M&A Deals

Home Health Care

 

 

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Target

Price

Celtic Healthcare

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Deal of the Week

We have been following the escalating prices of skilled nursing facilities for the past few years, with the higher prices paid for either newer properties or those facilities with a very high subacute patient mix, and often both. Diversicare Healthcare Services has decided to exit the West Virginia market where pricing tends to be on the high side for your average nursing facility. The company transferred the operations of two SNFs in West Virginia to American Health Care Management (AHCM), and sold a third facility located in Culloden to an affiliate of American Health care Management. This 90-bed facility opened on January 1, 2012 and apparently cost a little over $7.25 million to build. Diversicare had an option to purchase it from the landlord, Omega Healthcare Investors, for approximately $7.7 million. It exercised that option and has agreed to sell it to an affiliate of AHCM for $16.5 million, or $183,300 per bed, in a deal that is expected to close no earlier than July 1. That is a tidy profit........... 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

Chris Fenton and Heidi Brunet of Berkadia Commercial Mortgage closed on a $146 million financing for a portfolio of 19 seniors housing properties in 10 different states with Freddie Mac on behalf of Brookdale Senior Living. The loan has a seven-year term, 30-year amortization, 4.76% interest rate and a 60% loan-to-value ratio. The properties include 770 assisted living units, 205 memory care units and 195 independent living units with collective occupancy of 90%. The loan amount came to just under $125,000 per unit. According to Berkadia, this was Freddie Mac’s first seniors housing Early Index Lock transaction which provides protection against increases in interest rates..............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

The acquisition market, from a valuation perspective, can be dissected in several ways. There is the obvious average and median price per unit, and there is the price per unit by quartile. A different approach is to look at what we call the “institutional market,” meaning properties that are of a certain size and price point that attract institutional buyers. As a proxy, we used those properties that were at least 80 units in size and that sold for more than $100,000 per unit, and comparing these to the rest of the seniors housing market (assisted and independent living). In 2013, those larger and higher-priced properties sold for an average of $183,400 per unit ($185,300 per unit in 2012), while all the other properties came in at an average price of $91,300 per unit ($83,200 per unit in 2012). Even though there have been sales of small assisted living and memory care communities at prices in excess of $200,000 per unit (which would fall into the rest of the market category), there are a minority. This may begin to change as more 60-and 75-unit memory care communities are being built, which when stabilized, will often have a value between $150,000 and $250,000 in the market, and sometimes higher..........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 - 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.

 

Upcoming Interactive Webcast:

Marketing Strategies to Improve—or Maintain—Occupancy
Thursday, May 15, 2014, 1:00 pm ET
When did you last have a waiting list for your community? Occupancy levels are crawling back to pre-2008 levels in most locations, but no one takes “full occupancy” for granted anymore. Consumers have changed, too. The new generation of prospects—and their family members—will want new environments, active lifestyles, and engaging activities. And they’ll expect to know exactly what they’re contracting for in terms of costs, options, and care. Go to http://www.levinassociates.com/conferences/1405b-online-conference or call 800-248-1668 to register.

 

 

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