The Dealmakers Forum E-Newsletter, June 25, 2014 - ALFA Re-brands, Focus Healthcare Partners' Largest Acquisition to Date, Interview with Josh Jandris of Marcus & Millichap...

 

Bringing You Senior Care M&A Deals and News
 

June 25, 2014 Issue:

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
ALFA Is Changing Course. After the proposed merger between ALFA and ASHA was aborted, ALFA has decided to re-brand and implement the One Voice initiatives.............. Read More   

 

Recent Senior Care M&A Deals
Home Health Care & Hospice
   
Acquirer
Target
Price
N/A
Florida Urgent Care Clinics
N/A
C & M Health Services
N/A
Long-Term Care
   
$12.5 million                              

 

Deal of the Week

Focus Healthcare Partners has embarked on its largest acquisition to date, and we may see more of them in the coming months. Chartwell Retirement Residences announced it entered into an agreement to sell four senior living communities in Alabama, Michigan, Oklahoma and Tennessee with 827 units to Focus and its joint venture partner in the deal, Garrison Investment Group, a New York City-based private equity firm with $3.2 billion under management. The purchase price is $136.1 million, or about $116,600 per unit. The properties were built in the early 2000’s and are 100% independent living, at least for now, and occupancy is approximately 91%. Garrison and Focus would like to expand their relationship and build a large platform, so while they will look at opportunistic small deals, it will be the larger acquisitions like this one that will get them where they want to be. Richard Thomas of Grandbridge Real Estate Capital is representing the seller in the transaction, which is expected to close in the third quarter, and is arranging the debt financing............. 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 

Is three times the charm? Back in 1991, Sims Mortgage Funding (SMF) completed a $17.3 million HUD 232 loan for a not-for-profit nursing facility in Jamaica Estates, New York that financed a renovation and a 142-bed expansion of the nursing facility, which now has 220 beds. In 2004, SMF completed a Note Modification that reduced the annual debt service by about $300,000 through the 2034 maturity date. They now completed a second Note Modification, which reduced the annual debt service by another $124,000 plus they were able to suspend the annual $157,000 deposit to a debt service reserve fund, for combined savings of $281,000 per year. Apparently, the present value savings over the remaining maturity exceeded the transaction costs by 23 times. We are sure Chapin Home for the Aging will find a good use for the extra funds.............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 average expense ratio for skilled nursing facilities has always been somewhat high. In states with high per-day rates, however, high expense ratios don’t necessarily mean low values because it is always the absolute level of cash flow that matters. In 2013, however, there was a perfect correlation between average price per skilled nursing bed paid in the market and the expense ratio. Those skilled nursing facilities with an expense ratio below 85% (or an operating margin after a 5% management fee in excess of 15%), sold for an average price of $103,300 per bed. Those with an expense ratio between 85% and 89% came with an average price of $71,600 per bed. Finally, those nursing facilities that operated with an average expense ratio of 90% or higher came with the lowest value, or an average of $39,500 per bed. For comparison purposes, the overall average price per bed in 2013 was $73,300, which was an all-time record.......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 Josh Jandris

In this "Expert Opinion" interview, Josh Jandris, Senior Director of the Institutional Property Advisory Group, Marcus & Millichap, discusses case studies, assets, capital, recent transactions, and more.......Watch the video

 

Sponsored Content:

SNF Portfolio Sale - Chapter 11 Bankruptcy Auction July 28, 2014 
18 Prime Skilled Nursing Facilities are for sale in California. Don't miss this opportunity to purchase 1,905 beds in one acquisition. Click here for more information.

 

The Senior Care Acquisition Report, 19th Edition - Catch the Competition!
Deals have been made. The 2014 Senior Care Acquisition Report contains private deals in this market that are frequently too small to make it into the financial press. Order by June 30th and you will recieve a complimentary $150 worth of deals in our online senior care m&a databse. Now that’s a deal! Go to http://www.levinassociates.com/landing/scar19order or call 800-248-1668 to order today.

 

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