The Dealmakers Forum E-Newsletter, January 14, 2015 - Another high-priced SNF deal in Brooklyn

 

Bringing You Senior Care M&A Deals and News
 

January 14, 2015 Issue:

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Occupancy Increases in 4th QuarterAssisted living and independent living occupancy rates continue to increase............... Read More   

 

 

Recent Senior Care M&A Deals
Home Health Care & Hospice    
Acquirer Target Price
Addus HomeCare Corp. Priority Home Health Care, Inc. N/A
The Ensign Group Hospice of the South Plains N/A
The Ensign Group Alarys Home Health N/A
Long-Term Care    
Senior Housing Properties Trust 38 senior living properties $790 million
Private family operator Chautauqua County Home $16 million
New Jersey operator 4 Connecticut SNFs $58 million
CareTrust REIT, Inc. Prelude of Woodbury $7.2 million
Regional operator Southern Knights Assisted Living $2.7 million
Titan Senquest Evergreen Estates $13.45 million
The Ensign Group, Inc. Skilled nursing facility in Texas N/A
The Ensign Group, Inc. Post-acute care campus N/A

 

Deal of the Week 

SentosaCare, which owns 20 skilled nursing facilities in the New York City metro area, recently purchased Shorefront Center for Rehab and Nursing Care, a 360-bed skilled nursing facility on the Coney Island boardwalk area in Brooklyn. The provider paid $50 million, or $138,900 per bed, for the 20 year-old facility. For skilled nursing, that’s high, especially when you also look at the census, which includes 71% Medicaid, 11% Medicare and the rest a combination of VA, managed care and private pay. The facility is well occupied, at 97%, and being built in 1994, it isn’t the oldest property out there. To acquire the property, SentosaCare turned to Greystone to provide them with a $43.5 million HUD loan at a low fixed rate for 35 years. Considering the average price for skilled nursing acquisitions at $78,400 per unit (this according to data in The Senior Care Acquisition Report for trailing 12-months ending Sept. 30, 2014), Shorefront’s price is well above that figure. However, the last SNF transaction to happen in Brooklyn was in July 2014 with the sale of a 260-bed SNF (built in 1995 with a high Medicaid census) for $30 million, or $125,000 per bed. Must be a Brooklyn thing.............................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

A joint venture between Formation Capital and NorthStar Realty Finance Corporation brought in Aron Will, Mitchell Kiffe and Matthew Whitlock of CBRE to refinance 36 senior living communities, collectively known as the Ranger Portfolio. The portfolio, spread across 10 states in the South and West and featuring independent living, assisted living and memory care, was previously owned by Formation Capital and its often-investment partner Safanad Limited. In May 2014, they sold the 36 properties, along with 44 other properties, to a joint venture between NorthStar and Formation Capital for $1.1 billion, with Northstar contributing approximately 92% of the $430 million of equity. For the 36 properties being refinanced, CBRE secured a 10-year fixed rate CME (Capital Markets Execution) loan from Freddie Mac of approximately $350 million, including 60 months of interest only..............................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

The entire health care M&A market had a record year, not just the senior care side of it. Overall, there were about 1,250 publicly announced transactions in 2014 across all sectors of health care, with the senior care market responsible for more than 23% of that total, or 288 deals and counting. That means it was the most active sector in all of health care, topping the next largest sector (pharmaceuticals) by more than 100 transactions. But when it comes to dollars spent on acquisitions, the senior care market was a distance third, with just over $25.5 billion (and counting), compared with the market leaders, pharmaceuticals ($213.2 billion) and medical devices ($85.6 billion). In health care services, however, senior care was by far the most active, with more than twice the amount spent than the next most active sector (labs, MRI and dialysis). As long as interest rates stay low, we may have another banner year............................Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

 

EXPERT OPINION: A Conversation with Laca Wong-Hammond

In this Expert Opinion, Laca Wong-Hammond, Managing Director, Duff & Phelps, discusses predictions for 2015, long-term care, and foreign investment in U.S. health care assets........Watch the video

 

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