The Dealmakers Forum E-Newsletter, June 11, 2014 - Health Care REIT Competition, Senior Living Valuation Services' Survey, and more...

 

Bringing You Senior Care M&A Deals and News
 

June 11, 2014 Issue:

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Health Care REIT Competition Turns Negative. The once clubby health care REIT sector has become decidedly less friendly............ Read More   

 

Recent Senior Care M&A Deals
Long-Term Care
   
Acquirer
Target
Price
7 retirement communities
$146.8 million
Private REIT
2 skilled nursing facilities
$26 million
Investment group
Sunnyview Nursing & Rehab Center
$20.5 million
Large Owner
$22 million                              

Deal of the Week

National Health Investors just expanded its relationship with Chancellor Health Care, LLC with the acquisition of a 56-unit assisted living community in Northern California that specializes in memory care services. Because eight of the units are semi-private, the capacity is closer to 64 beds. This community opened 15 years ago, and while in the fast-changing state of seniors housing that may seem “old,” the sellers were doing a great job. Not only was occupancy at 94%, but the average revenue per occupied unit was approximately $7,300 per month, which is significantly higher than average. The purchase price was $11.5 million, or $205,300 per unit and $179,700 per bed, and the cap rate came in at an industry average of 8.5%. The initial 15-year lease with Chancellor starts with an 8% lease rate plus annual escalators, and NHI funded the transaction with its revolving credit facility. ............. 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

There is usually a huge divide in valuation between those skilled nursing facilities in the New York City metro area and those that are considered to be “upstate.” In the New York metro area, prices tend to be close to $100,000 per bed and higher, and it is a reflection of an expensive area plus the fact that many of these high-priced sales involved SNFs that were much larger than the average, where true economies of scale influence the cash flow and value. Greystone just refinanced a bridge loan it provided to Centers for Specialty Care Group 13 months ago to purchase a 314-bed skilled nursing and rehab facility in Queens, New York. The new HUD loan came in at $36.7 million, or just under $117,000 per bed, with a 30-year amortization and a typically low interest rate. New York City rules on high valuations, but haven’t ruled the Stanley Cup for 20 years. Barring a miracle this week, they may have to wait.................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

In our annual Senior Care Acquisition Report, which was published in March, we reported that the average cap rate for assisted living communities, which included memory care and Alzheimer’s properties, was 8.7% in 2013, the same as in 2012. The appraisal firm Senior Living Valuation Services just came out with its annual survey of cap rates, and while different from our report because it reflects the opinions of market participants and not the actual sales facts, the survey resulted in an average assisted living cap rate this year of 8.1%, down 30 basis points from their 2013 survey, and an average cap rate for licensed dementia and Alzheimer’s facilities of 8.5%, also down 30 basis points from the 2013 survey. So, given these statistics as well as the recent sale above, don’t believe it when sellers say that the market is 6% to 7%. There is a lot of business at cap rates above that...............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 Jay Connolly

In this "Expert Opinion" interview, Jay Connolly, CEO, Lift Hero, discusses senior transportation, mobile technology, benefits of ride sharing, Lift Hero, and more..........Watch the video

 

Sponsored Content:

GE Capital, Healthcare Financial Services provides tailored healthcare real estate financing solutions
We’ve helped organizations like yours finance over 6,000 senior housing and skilled nursing facilities across the U.S. Learn more.

 

Long Term Care Summit, July 14-15, Palm Beach, FL
Join senior level executives for a focused discussion on what's shaping the long-term care industry. Contact Laurel Zevitz at l.zevitz@marcusevansch.com

 

Around the Web in Senior Care M&A...Click here to see more

Webcast Calendar... Click here to see more

Upcoming Conference Partnerships... Click here to see more

Previous Issues of The Dealmakers Forum... Click here to see more