The Dealmakers Forum E-Newsletter, July 16, 2014 - Juniper Communities Buys 272-Unit Retirement Community, Berkadia Commercial Mortgage Arranges $156 Million In Financing For Capital Senior Living, Kindred Healthcare Increases Bid For Gentiva
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July 16, 2014 Issue:
Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Aging2.0 Meets Ziegler LinkAge Longevity Fund. With $26.62 million to invest, a new fund has been formed to invest in new technologies to help the senior living population............... Read More
It is not often that a successful retirement community has been in the hands of the same family for more than 30 years, with the second generation deciding it was time to retire. Such was the case this month with New Jersey-based Juniper Communities finding a 272-unit retirement community in Stata College, Pennsylvania. The first part of the community was built in 1983 with personal care units, which were subsequently remodeled and, in 2002, expanded to bring the total to 87 very attractive units. During that 19-year period, 33 independent living units, 116 skilled nursing beds and a separate 36-unit memory care building were added. Overall occupancy is about 91%, something we assume Juniper will try to improve, but they don’t want to change too much since the community appears to be humming along. The independent living units, although the smallest part of the community, are 100% occupied, which is a plus if any expansion is in the cards. Annual revenues and EBITDA are approximately $16.0 million and $3.25 million, respectively, for a 20% operating margin. The skilled nursing component is nearly 100% private pay with a small Medicare census and no Medicaid, unusual for that many beds. The purchase price was a very reasonable $35.5 million, or $129,500 per unit/bed and a cap rate of just over 9.1%, which is a market blend of the various components. Metro Bank provided the financing and the law firm Akerman LLP provided legal advice to Juniper. ........... Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today
Capital Senior Living has been lowering the average cost of debt on its balance sheet, and $156 million in financings from Berkadia Commercial Mortgage has helped them with that goal. Arranged by Lisa Lautner, one financing for $135.5 million was secured by 12 senior living properties in Texas, Ohio, Missouri, Kansas and Mississippi. The fixed rate Fannie Mae loan is for 10 years with a 4.24% interest rate and a 30-year amortization. With a total of 1,575 independent and assisted living units, the loan amount comes to $86,000 per unit. Lautner also placed $9.3 million with Berkadia’s bridge loan program secured by two communities in Louisiana and Oklahoma that Capital Senior Living is preparing to sell. The one-year loan is floating rate. Finally, a third loan in the amount of $11.8 million was also placed in the bridge loan program. The two-year loan proceeds will be used to renovate and reposition the community, which has 239 independent and assisted living units. All in a day’s work............Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today
After the relatively feeble 50-cent a share increase in its offer for home health care provider Gentiva Health Services to $14.50 per share last month, Kindred Healthcare finally succumbed to a real increase in its offer, this time to $16.00 per share. Remember that Gentiva was trading near $7.50 per share just three months ago, so investors are being bailed out regardless of the price Kindred offers and whether a deal gets done, since they are free to sell any time they want to at the now elevated price. But obviously some investors think this is not the end of the negotiating road for Kindred, as Gentiva’s price jumped to $16.50 per share on news of the higher offer. Our guess is that if Gentiva will engage Kindred in real discussions, the price could get nudged to $17.00 per share as Kindred would not walk away over a mere $40 million difference in value. If Gentiva continues to stonewall, however, Kindred should walk away, and very publicly, and watch Gentiva’s shares plunge..........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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