The Dealmakers Forum E-Newsletter, November 5, 2014 - CareTrust REIT announces its first acquisition since Ensign spin-off


Bringing You Senior Care M&A Deals and News

November 5, 2014 Issue:

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
LTC Properties sells or leases 37 properties: With a looming December 31 lease termination deadline, LTC keeps some of the former Assisted Living Concepts properties and leases some others............ Read More   



Recent Senior Care M&A Deals
Home Health Care & Hospice    
Acquirer Target Price
MPI Research N/A
Chenega Corp. AQTS Home Health Care N/A
Long-Term Care    
Private equity firm Oak Ridge Assisted Living $6.75 million
Dancing River Assisted Living $18.5 million
CareTrust REIT, Inc. 3 assisted living facilities $12 million
Sabra Health Care REIT, Inc. Onion Creek $14 million
Sabra Health Care REIT, Inc. 3 skilled nursing facilities $41 million
Oak Crest Communities N/A
Omega Healthcare Investors, Inc. Aviv REIT, Inc. $3 billion


Deal of the Week 

Five months after being spun out from The Ensign Group as a publicly traded REIT, CareTrust REIT has announced its first acquisition. It has agreed to acquire three assisted living and memory care communities with 90 units from Idaho-based Cross Healthcare for $12.0 million, or $133,300 per unit. They have an average age of eight years and a 92% occupancy rate. They will be leased back to Cross Healthcare for an initial term of 12 years with two-five-year renewal options and annual CPI-based rent escalators. The EBITDAR lease coverage is 1.31x, which implies annual EBITDAR of a little over $1.3 million and an 11% cap rate. As part of the agreement, CareTrust has the right to acquire three additional Cross Healthcare assets, two of which are currently undergoing renovation, lease-up and stabilization, at fixed-formula pricing; the third asset is a new development. Cross Healthcare operates 19 assisted living and memory care communities in Idaho, Montana and Washington................... 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

Senior Vice President Richard Thomas of Grandbridge Real Estate Capital’s Senior Housing and Healthcare Finance team in Atlanta only took 63 days (from application to closing) to facilitate financing for the acquisition of a 109-unit AL/IL community in Suwanee, Georgia. The rumored buyer of the property is Kayne Anderson, while the seller is a local family, who built the community in 2011 and saw it reach full occupancy in 2012. It was at that point when Grandbridge provided the property with a $19 million first mortgage from Fannie Mae. For this transaction, Thomas and his team closed a $4.5 million supplemental loan for the buyer in conjunction with the assumption of the existing $19 million mortgage. Although not disclosed, we believe the price is most likely above $240,000 a unit. The community was doing very well, with 97% occupancy at the end of June, 2014, and the buyer plans to add 25% more units. We also hear that Kayne Anderson will tap an existing operator of theirs, Discovery Senior Living, to manage the community.....................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

As you may know from the October issue of The SeniorCare Investor, there was a record number of publicly announced acquisitions in the seniors housing and care market (80) in the third quarter. There have been some years in the distant past that didn’t even reach that level for a full 12 months. And this was mostly accomplished during the summer months! So, what does the market do for an encore? In October, we tracked 34 announced acquisitions, the most ever in a single month, and that number will be going higher as a few additional deals have materialized that we didn’t see. Last month we stated that we might reach 2013’s record transaction volume of 225 deals by Halloween, and we beat it with more than a week to spare. The bull market continues.....................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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