The Dealmakers Forum E-Newsletter, February 25, 2015 - Joint venture buys five seniors housing communities
Bringing You Senior Care M&A Deals and News
February 25, 2015 Issue:
Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Genesis Healthcare Makes First Earnings Report: News of higher operating costs sends the shares of newly merged Genesis Healthcare and Skilled Healthcare down more than 20%................. Read More
|Recent Senior Care M&A Deals|
|Home Health Care & Hospice|
|Greystone Healthcare Management Corp.||Executive Care of Columbus||N/A|
|Episcopal SeniorLife Communities||Pinehurst Senior Living||N/A|
Deal of the Week
You may remember last week we profiled Aron Will’s $23.5 million financing for a joint venture between Care Investment Trust and Royal Senior Care to purchase five seniors housing communities. Now, here all the juicy details on that deal.
The Hollinger Group, an owner/operator of senior care facilities in the Mid-Atlantic, South Carolina and Florida, turned out to be the seller of the portfolio. Dubbed The Hollinger South Portfolio, it consists of five properties (with 282 total units) which Hollinger had acquired over the last several years. Hollinger purchased two of the properties (in Summerville and Port Royal, South Carolina, totaling 117 units) in 2011 from Health Care Corporation for $6.0 million when the properties were combined 90% occupied. This year, they sold for a combined $7.2 million, or $61,500 per unit, a 20% increase after roughly three and a half years of ownership.
The 53-unit assisted living facility in Tampa, Florida was originally bought in 2007 by Hollinger for $3.8 million, which was 80% occupied at the time of that sale. This year, Hollinger sold the property for $6.7 million, or $126,000 per unit, a 76% increase from its original purchase price. Then finally, Hollinger sold its assisted living communities in Easley and Gaffney, South Carolina for $15.7 million, or $140,000 per unit.
Overall, the portfolio was 94% occupied at the time of this sale, and it operated at a 22% margin, translating approximately to a 7.5% cap rate. The properties sold for about $29.1 million, or $103,000 per unit. In order to improve margins and cash flow, the joint venture (of which Care owns 80% and Royal 20%) plans to increase rents. As for Hollinger, it is quitting the seniors housing business to focus on its rehab, LTACH and CCRC businesses. Ryan Saul, Brad Clousing and Jeff Binder of Senior Living Investment Brokerage (which also handled Hollinger’s previous purchase of these communities) handled the transaction...................................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 California-based owner/operator of skilled nursing facilities turned to MidCap Financial to provide a $31 million bridge-to-HUD loan to refinance four of its SNFs and to acquire one SNF. The facilities (three of which are located in the greater Los Angeles area and two in the San Francisco Bay area) contain 768 beds and are all owned and operated by LifeHouse Health Services, bringing its total to nine SNFs in California alone. The loan refinanced existing first mortgage and working capital loans secured by a first mortgage across the five properties. The original first mortgage was arranged by another lender. On one of the properties, LifeHouse executed a purchase option for $12.7 million (funded also by the bridge-to-HUD loan). The floating rate debt comes with a three-year term, and will likely be taken out by HUD..................................Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today
People on the Move
CBRE just announced that Lisa Widmier has joined the firm as an Executive Vice President, CBRE Capital Markets, together with her colleague Deborah Street as Vice President, both of whom will be part of the National Seniors Housing Investment Sales Practice. Widmier and Street have most recently been with VantAge Pointe Capital Management, which Widmier formed in 2008, and we assume they will move their book of investment sales business over to CBRE. The two of them will be partnering with Matthew Whitlock and Aron Will to provide the full spectrum of investment sales and debt products to CBRE clients. Widmier and Street will be located in Carlsbad, California................................Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today