The Dealmakers Forum E-Newsletter, July 2, 2014 - Capital Senior Living Purchases Three Communities, Deutsche Bank Funds $940 million CMBS refinancing for 167 Skilled Nursing Facilities, Skilled Nursing Population Drops 20% in 10 Years

 

Bringing You Senior Care M&A Deals and News
 

July 2, 2014 Issue:

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
CareOne On The Market For $2.0 billion. CareOne Management is reported to be looking for $2.0 billion for the real estate of its 68 properties............... Read More   

 

Recent Senior Care M&A Deals
Home Health Care & Hospice    
Acquirer Target Price
Home Care Health Services Connection of Toledo N/A
Long-Term Care    
Opal Aged Care Stockland's Aged Care portfolio $25.6 million
Focus Healthcare Four senior living communities $136.1 million
Miller's Merry Manor Parkview Oaks and Parkview Pointe N/A


Deal of the Week

Capital Senior Living has purchased three senior living communities that it has been managing on behalf of a joint venture in which it held a 10% interest. The price was $83.6 million, or $193,100 per unit. The properties are located in Ohio and have 227 independent living units and 206 assisted living units. It appears that revenues and EBITDA are about $17.8 million and $7.0 million respectively, for an operating margin of 39% after management fee. Two of the communities are financed with $40.1 million of 10-year, fixed rate non-recourse debt with a blended rate of 4.41%, plus $21.6 million for the third property in a two-year bridge with a variable rate of approximately 2.90%. Combined with a just announced refinance of 15 other communities for $156.5 million, Capital Senior Living has lowered its overall long-term debt costs by 50 basis points since the first quarter of 2014, to 4.72%. The new debt also resulted in $36.5 million in incremental cash proceeds. Not too shabby........... 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 

Deutsche Bank committed $940 million to refinance $920 million of CMBS debt on behalf of Rubin Schron and his portfolio of 167 skilled nursing facilities with 20,222 beds in 19 states. These properties are operated by Sava SeniorCare and 61% of the facilities are in Texas, North Carolina and Colorado. Of the total amount, $550 million was priced at LIBOR plus 535 basis points and $150 million was priced at LIBOR plus 451 basis points. There are three mezzanine pieces totaling $240 million, and NorthStar Healthcare Income took the highest yielding one at LIBOR plus 1027, with a $75 million face amount. This is a huge deal for the market. Housing & Healthcare Finance provided Deutsche Bank with assistance in all aspects of the underwriting, including deriving the final underwritten cash flow, appraisal review, site visits and preparation of rating agency and investor presentations. Further details of this financing are in the July issue of The SeniorCare Investor..............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 

We just heard that the number of patients in skilled nursing facilities has declined by approximately 20% from 2000 to 2010, or from 1.6 million to 1.3 million. That is a staggering number, especially since there have been some industry observers worried that there were not going to be enough skilled nursing beds for the aging population. It is true that small older nursing facilities have been closing down, especially in the Northeast where a few states have been pushing for the closure of the smallest and perhaps most inefficient facilities. The push for community-based care has obviously had an impact, and perhaps balanced the loss of some beds in certain markets. With assisted living and memory care communities taking on higher and higher acuity residents, there may be a further drop in skilled nursing census until the baby boomers start to fill the void in 15 years or more. Despite the census drop of 300,000, we have not seen overall occupancy levels plunging........Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

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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.

 

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