The Dealmakers Forum E-Newsletter, September 24, 2014 - Opportunistic repositioning of low occupancy IL community

 

Bringing You Senior Care M&A Deals and News
 

September 24, 2014 Issue:

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Five Star Quality Care Needs To Shine: Five Star Quality Care is still behind on its financial filings, and it still lacks investor interest............ Read More   

 

 

Recent Senior Care M&A Deals
Home Health Care & Hospice    
Acquirer Target Price
National Nursing & Rehab N/A
Providence Service Corporation Matrix Medical Network $400 million
Long-Term Care    
14 senior living properties $230 million

 

Deal of the Week 

When Marathon Development and Brannan Associates acquired Parkside West Independent Living Community on May 16, 2014 for $3.75 million, they knew there was a long road ahead of them. They saw that the 100-unit community had good bones, but, with an occupancy of just 33% (compared to 95% for the area), was simply poorly managed by a mom and pop. So, they brought in contractor Nelson + Morris and designers LRS Architects and Warner Design Associates to reposition the property as an assisted living and memory care community. The new community, called Brannan Park, will have an additional 1,700 square feet added to the existing 90,000 square feet, with several IL rooms being removed to create common spaces. At the end of construction, scheduled to break ground this November, Brannan Park will have 100 assisted living units and 27 memory care beds in 21 units, at an average of 750 square feet per unit. The community, in addition to being modernized, will also feature the latest in nurse-call technology. To finance the $4.5 million project, the developers sold taxable, municipal bonds, which City Corp. underwrote. Marathon Development and Brannan Associates brought in regional operators Village Concepts and Federal Way to manage the property, which is expected to re-open in August 2015. Two vacant parcels were also acquired for future development: one acre on the south boundary which will have a stand-alone memory care facility, and 1.6 acres on the north boundary where between 26-30 independent living cottages will be built, also to be funded through the sale of municipal bonds................. 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

Lancaster Pollard recently provided $36 million in bond financing to an Indiana CCRC for the construction of three new IL buildings, as well as $24 million in bonds to refinance the community’s existing debt. Westminster Village, a not-for-profit, 280-bed CCRC in West Lafayette, Indiana, provides independent living (131 units and 57 cottages), assisted living (38 units) and skilled nursing (70) on its campus. But, after experiencing long waitlists and high demand for their IL units, the community wants to expand its independent living into three new buildings, in addition to constructing a new health and wellness building. The new construction project will be funded by long-term bonds, while the refinance was funded through two bond series: one long-term and one short-term that would be repaid by the collection of entrance fees. LP also placed two interest rate swaps on top of the structure, providing the CCRC with significant savings through the synthetically fixed, blended interest rate. Chris Blanda of Lancaster Pollard led the transaction................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

Last week we discussed how the average price paid per square foot for seniors housing set a new record even though the per-unit price did not. In the skilled nursing market, despite a record-shattering average price per bed of $73,300 in 2013, the average price per square foot declined to $153 from the record set in 2012 of $171 per square foot. The median price per square foot had an even sharper decline. While no one buys skilled nursing facilities based on the per-foot cost, it is useful for comparing against new construction or replacement cost. Lenders like it because it gives them a comparative tool when looking at valuations, especially if the price per square foot comes in at an abnormally high level. They can then find out what is making this real estate so valuable, at least on a per-square-foot basis................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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