The Dealmakers Forum E-Newsletter, February 11, 2015 - Impressive turnaround at Washington senior living community
Bringing You Senior Care M&A Deals and News
February 11, 2015 Issue:
Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Pressure on Brookdale To Pump Up Value: A dissident shareholder has emerged trying to pressure Brookdale Senior Living to monetize its real estate assets................ Read More
|Recent Senior Care M&A Deals|
|Home Health Care & Hospice|
|The Ensign Group||Post-acute care campus||N/A|
|The Ensign Group||Skyline Manor||N/A|
|Benton House of Shoal Creek||$28.5 million|
|Regional owner/operator||River Terrace Estates||$6 million|
Deal of the Week
When Focus Healthcare Partners and Artemis Real Estate Partners acquired the 182-unit Skagit Valley Senior Village (located about halfway between Seattle and the Canadian border) for $18.64 million, or $102,400 per unit, from the receiver in 2012, after the previous owners defaulted after building an addition in 2010, the community was only 60% occupied and losing money. But Focus and Artemis hired Vancouver, Washington-based Artegan Senior Living to manage the property, turn it around, renovate the common areas and convert a portion into a dedicated memory care wing.
Today, the 198-unit community is 86% occupied with still more room for improvement, and the owners decided to sell it to an institutional buyer for $35 million, or $176,800 a unit, a pretty nice return for the sellers after just two and a half years. The new owners brought in Bothell, Washington-based Cascade Living Group to operate the property under a long-term lease.................................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
Capital One Bank closed a $52 million senior secured loan to refinance a 299-unit entrance fee CCRC in North Branford, Connecticut. Jointly owned by The Shelter Group, a privately held real estate development and property management company that specializes in multifamily and seniors housing, and affiliates of HJ Sims, the community consists of 227 independent living units, 22 assisted living units and 50 skilled nursing beds, and is managed by Brightview Senior Living, an affiliate of The Shelter Group. First Niagara participated in the loan, which will also help fund some capital improvements throughout its term, which, along with the rate, was not disclosed.
The joint venture originally purchased the CCRC back in 2006 (when it had 294 units consisting of 244 IL units and 50 skilled nursing beds) from Harrison, New York-based Senior Care Development for approximately $72 million, or $244,900 per unit. The CCRC was built in phases, the first opening in 1991, the second in 1992 and the third in 1994, and its occupancy at the time of the 2006 sale was 94%.................................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
Looking at the cost per square foot to build assisted living units versus the price/sq. ft. to purchase AL units, you can see why prices for assisted living communities have been rising so quickly in the last couple of years. According to our development database, which tracks senior living developments since early 2013, it costs approximately $232 per square foot to build a community with a majority of assisted living or memory care units. Compare that to approximately $179.23 per square foot to purchase an existing AL community, based on 2013 deals in the 19th edition of The Senior Care Acquisition Report.
In 2013 deals, the average age of the properties acquired was about 15 years, so it makes sense that building a brand new property should cost more than buying an older one. But, new developments have to worry about fill up, and that could become more of an issue in the next few years when the construction projects that are being announced now will open. That should drive up the prices of stabilized communities even more. We expect to see a rise in the average price per square foot in the 20th edition of The Senior Care Acquisition Report, which will be available next month..............................Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today