The Dealmakers Forum E-Newsletter, October 8, 2014 - Midwest operator purchases 19 skilled nursing facilities from Ide Management Group

 

Bringing You Senior Care M&A Deals and News
 

October 8, 2014 Issue:

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Record-setting Senior Care M&A in Q:3 2014: The number of announced seniors housing and care acquisitions increased by 33% from the previous quarter, and dollar volume soared to $9.0 billion............ Read More   

 

 

Recent Senior Care M&A Deals
Home Health Care & Hospice    
Acquirer Target Price
AxelaCare Health Solutions Advanced Care of New York N/A
Long-Term Care    
Sabra Health Care REIT, Inc. 21 Holiday Retirement Communities $550 million
The Ensign Group, Inc. Sherwood Village Assisted Living N/A
AVIV REIT Skilled nursing facility in KY $4.6 million
CNL Lifestyle Properties 2 senior housing communities $33.6 million
PruittHealth
Skilled nursing and
rehabilitation center in NC
N/A

 

 

Deal of the Week 

The skilled nursing market has been more active than most people think, with more than a dozen individual transactions in August with prices ranging from about $40,000 to $130,000 per bed. In the largest deal last month, at least based on number of facilities, a Midwest operator purchased 19 skilled nursing facilities from Ide Management Group for $63.0 million, or $54,350 per bed. Of the total, 17 are located in Indiana and two in Iowa. Overall occupancy is 80% with a 78% Medicaid census. The pricing metrics are all within range, with a 12.1% cap rate and a 0.90x price-to-revenue multiple. As part of the deal, Ide Management had granted the buyer an option, through 2020, to purchase the leases on 12 additional skilled nursing facilities that are leased from a publicly traded REIT. Ryan Saul of Senior Living Investment Brokerage handled the transaction.................. 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

It looks like Housing & Healthcare Finance (HHC Finance) is on track to be the largest HUD healthcare lender, in terms of dollar amount closed, for HUD’s FY2014 which ended on September 30. All in all, HHC Finance closed just under $750 million of HUD loans (from 73 separate loans), with over 90% of that going towards refinances using the FHA Sec. 232/223(f) program. The loans primarily went to SNFs, though HHC Finance also provided financing for assisted living communities. Interest rates were in the high 3% area, with loan-to-values ranging from 70% to 80%. HHC Finance finished strong in August and September closing seven HUD loans totaling $95 million all going to refinance SNFs. The company closed the loans in New York, New Jersey, two in Pennsylvania, Delaware, Ohio and Georgia. And for all the transactions, the borrowers lowered their current interest rates and received fixed rate, non-recourse, assumable, and fully amortizing HUD loans with terms ranging from 30 to 35 years. Lancaster Pollard is believed to have come in second place, though their full HUD FY2014 data is not yet known. However, through from October 2013 to July 2014, LP reported a total of 74 loans and $637.8 million in total loan amount, both leading the field in senior living HUD LEAN lenders at the time. The company’s acuity mix is predominantly assisted living and nursing facilities, with some multi-unit mixes and CCRCs as well..................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 all know that size matters, but so does age. In the assisted and independent living market last year, there was a direct correlation between the age of the community sold and the price per unit, which makes sense. But the difference between the oldest and newest was quite stark. Those communities sold that were under six years old sold for an average price of $266,900 per unit, which may be close to the average new construction cost in some markets. Between six and 10 years old the average value dropped to $187,500 per unit, with a small further decline to $170,600 per unit for those between 11 and 15 years of age. The most dramatic drop came with all those communities sold that were more than 15 years old. The average price was only $80,400 per unit, which is why some opportunistic buyers prefer these older properties. They view them as less risky with an opportunity to improve the physical plant and still be at a lower price point..................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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