The Dealmakers Forum E-Newsletter, March 4, 2015 - High-priced, small-property AL portfolio sells for $29.5 million

 

Bringing You Senior Care M&A Deals and News
 

March 4, 2015 Issue:

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Seniors Housing Bubble or Not?Webinar attendees voted by nearly 3 to 1 that we are approaching a valuation bubble.................. Read More   

 

 

 

Recent Senior Care M&A Deals
Home Health Care & Hospice    
Acquirer Target Price
Almost Family WillCare HealthCare $49.5 million
Long-Term Care     
Not disclosed Autumn Grove Cottage portfolio $29.5 million
Granite Real Estate Assisted living community $7.2 million

 

Deal of the Week 

A private owner-operator that wanted to exit the business (getting out when the market is hot?) sold their portfolio of nine assisted living (with a focus on memory care) properties in the Houston and San Antonio areas of Texas. What was unique with this portfolio was that every community has just 16 units. They were all built between 2005 and 2014, with the last two stabilizing from the marketing period to the closing. Each building is between 6,300 and 7,500 square feet, and they apparently are in great markets, which contributed to their success.

 

The sales price was $29.5 million, or $204,800 per unit, which is certainly at the high end for small communities. Revenues and EBITDA were approximately $7.2 million and $2.53 million, respectively, resulting an operating margin of 35%, which is quite good for small properties. The cap rate was 8.6%. Matthew Alley and Toby Seifert of Senior Living Investment Brokerage 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

Lancaster Pollard certainly had a strong February, closing 18 seniors housing transactions totaling over $141 million. The company not only closed a good amount of business, but they were a diverse set of transactions. Nine were note modifications of existing HUD loans, which resulted in an overall average interest rate reduction of 43 basis points. Five were balance sheet loans provided by Lancaster Pollard Finance Company totaling $31 million. Lancaster also provided a $22 million acquisition loan for a skilled nursing facility in the Northeast. Finally, the company served as an advisor for an assisted living community in Utah on a $5.5 million USDA Business and Industry transaction. Well done, LP...................................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 see in our 20th edition of The Senior Care Acquisition Report, which comes out later this month, one of the over 70 statistics we discuss is the average price per unit for independent living communities in the past five years. Not to spoil anything in the report, but IL deals in 2014 had an average price per unit of $246,800, marking the second year in a row that this value has increased by over $40,000 per unit year over year.

 

This remarkable jump in independent living community valuations is just another indicator of high prices breeding higher prices. While there are of course other factors for these higher prices, owners of high-quality IL properties who previously would not be selling their stabilized and profitable communities are now entering the market to take advantage of the higher valuations, and who can blame them? But what about assisted living and skilled nursing? Don’t worry, the report will cover those too.................................Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

 

 

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