The Dealmakers Forum E-Newsletter, January 28, 2015 - Seller gets great price for its five-SNF portfolio

 

Bringing You Senior Care M&A Deals and News
 

January 28, 2015 Issue:

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Seniors Housing Portfolio in New England Sells For Top PriceNine properties in three states sell for over $500,000 per unit, more than doubling in value in 10 years................ Read More   

 

 

Recent Senior Care M&A Deals
Home Health Care & Hospice    
Acquirer Target Price
Madison Dearborn Partners Walgreens Infusion Services N/A
Extendicare Inc. Revera Home Health $83 million
Accelera Innovations, Inc. Traditions Home Care, Inc. $6 million

 

Deal of the Week 

Chris Hyldahl and Mike Segal of Blueprint Healthcare Real Estate Advisors, recently closed on a portfolio of five skilled nursing facilities located in the Inland Empire area of southern California. The average occupancy was just over 90% with a Medi-Cal census of 77%. The rest was a combination of private pay, managed care, hospice and just 3% Medicare, which we assume represents some opportunity for the buyer. The seller was a family that was exiting the business, and the buyer was a private equity firm based in New York City. The purchase price was approximately $55 million, or just under $71,000 per bed. The cash flow had improved significantly during 2014, and based on annualized results, the cap rate came in at a relatively low 9.8%. The buildings are a little on the small size and several have a number of triples, which certainly hurts the marketing. So it looks like the seller got a very good price...............................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

Richard Thomas and Meredith Davis of Grandbridge’s Seniors Housing and Healthcare Finance team arranged on behalf of ROC Seniors Housing Fund Manager, a subsidiary of Bridge Investment Group Partners, a $21.2 million fixed rate, nonrecourse first mortgage loan to acquire, renovate and repurpose a 345-unit senior living community in Phoenix, Arizona. AEW Capital Management, with Cushman & Wakefield providing advisory services, sold the property to ROC for $26.8 million, or $77,681 per unit.

 

The loan, at 79% LTV, was provided by BB&T Real Estate Funding’s Structured Loan Program and featured a three-year term with two one-year extensions. The initial term is interest-only and the amortization begins with the extensions. The loan included approximately $5 million for the buyer to renovate and repurpose the community to add memory care services. ROC will bring in Freedom Senior Management to operate 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

What level of senior care is most expensive to build, on a cost per square foot basis? Well, it’s probably no surprise to many of you that, according to our database, independent living communities are the cheapest (at $170 per square foot, on average), or that stand-alone memory care facilities are the priciest (at $302 per square foot). Falling in between, assisted living communities (which can include a portion of memory care units) cost approximately $219 per square foot, and new skilled nursing facilities cost approximately $279 per square foot. The higher level of care needed, the higher the cost to build, but the higher the rents too.
 

In our database, which goes back to the beginning of 2013, we view development cost as inclusive of construction costs, land and developer fees, and we consider a community with majority independent living as an independent living community (same for all levels of acuity). ............................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

 

Around the Web in Senior Care M&A...Click here to see more

Webcast Calendar... Click here to see more

Upcoming Investor Conferences - Seniors Housing and Health Care... Click here to see more

Previous Issues of The Dealmakers Forum... Click here to see more