The Dealmakers Forum E-Newsletter, October 22, 2014 - Struggling county-owned skilled nursing facility sold for over $100,000 a bed

 

Bringing You Senior Care M&A Deals and News
 

October 22, 2014 Issue:

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Seniors Housing Margins On the Rise: Beware of stories that don't tell the entire story, especially if the numbers just don't add up............ Read More   

 

 

Recent Senior Care M&A Deals
Home Health Care & Hospice    
Acquirer Target Price
Kindred Healthcare, Inc. Gentiva Health Services, Inc. $1.8 billion
MergeWorthRx Corp. AeroCare Holdings, Inc. Merger
Long-Term Care    
The Ensign Group Shea Family Care N/A
Not Disclosed N/A
Kensington Realty Advisors Orchard Park of McKinney N/A
Focus Ventures Otsego Manor $18.5 million
Athena Health Care Systems The Overlook at Northampton N/A
Sabra Health Care REIT, Inc. 4 memory care facilities $25.9 million
Sabra Health Care REIT, Inc. Tudor Heights $5.6 million
Private equity firm Oak Ridge Assisted Living $6.75 million

 

Deal of the Week 

Yet again, we see a county-owned nursing home that is losing money be sold for over $100,000 per bed. Otsego Manor, a 174-bed skilled nursing facility in Cooperstown, New York, was owned by Otsego County in upstate New York and was losing an estimated $500,000 a month which was expected to spiral even higher in future years. So, county officials formed the Otsego County Health Facilities Corp. to oversee the marketing and sale of the Manor to a private buyer. Focus Ventures of Airmont, New York was the highest bidder, and is expected to pay $18.5 million, or $106,322 per bed, for the facility. This price at first glance seems high for a financially struggling nursing home. However, the facility offers a tremendous opportunity for the buyer, if they can improve margins by increasing the Medicare census, adding services and bringing their experience to run the place more efficiently. Focus Ventures plans to add adult day care, as well as the county’s first Medicaid-funded assisted living community as well as senior housing to the site. So it seems like a win-win deal, with the county being able to take a $500,000 a month loss off its books, plus use the cash proceeds from the sale, and the private buyer being able to turn around a beleaguered property. The sale has not closed yet, but is expected to be finalized soon................... 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

Dominion Partners LLC, an owner and operator of senior living communities across the Southeast, received a $36.3 million loan from Capital One Bank to refinance the original construction loan for an independent and assisted living community in Charleston, South Carolina. Somerby of Mt. Pleasant has a total of 248 units, compromising 159 IL units and 89 AL units. The community opened in 2008, financed by a construction loan from Wells Fargo, but six years later, Dominion sought to refinance with Capital One Bank. Imran Javaid, Derek Zeller and Anthony Martin of the Capital One team, working with Dominion for the first time, closed on the five-year term loan in September, which provides the borrower more flexibility to refinance or sell the property in the future....................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

When the average price per bed for skilled nursing sales set a record in 2013 at $73,300 per bed, one of the drivers for that high average price was the number of sales over $100,000 per bed. There were a dozen transactions priced over $100,000 per bed last year, some of which involved more than one facility. So far in 2014, there have been at least 16 sales over $100,000 per bed, with a few even topping $150,000 per bed. And we have more than two months to go. Consequently, barring a sudden rash of low-priced sales, we could be seeing another record set for skilled nursing facilities in 2014. If we end up with more than 20 sales over $100,000 per bed, especially if a few of them are portfolio sales, the year could end up with an average over $80,000 per bed. That is a record that could stick, much like Peyton Manning’s new TD record....................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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