The Dealmakers Forum E-Newsletter, March 18, 2015 - Two turnaround SNFs bought in Texas
Bringing You Senior Care M&A Deals and News
March 18, 2015 Issue:
Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
How HCP Will Deal With Its Largest Tenant: HCP plans to sell up to 50 HCR ManorCare SNFs, but will it really work?................... Read More
|Recent Senior Care M&A Deals|
|Texas operator||2 skilled nursing facilities||$2.8 million|
|Greystone Healthcare Management Corp.||10 skilled nursing facilities||N/A|
Deal of the Week
Even though we have been seeing a lot of high-priced transactions in the past two years, there are still the older, smaller and not profitable nursing facilities that come on the market and need to find a home. A Texas owner/operator sold two of its nursing facilities in the state that were underperforming for a combined $2.825 million, or $19,350 per bed. The average price per unit in the region is about $55,850 (according to the 20th Edition of the Senior Care Acquisition Report, coming out later this month), the lowest in the country, which makes sense considering all the new assisted living construction in Texas that discourages the building of new nursing facilities, driving their average age up.
The two SNFs were built over 40 years ago and had 66 beds and 80 beds with a combined occupancy of 49% (ouch). Revenues were just under $2.9 million and they were operating near breakeven, so there was no cap rate. A Texas operator purchased one of the facilities and a publicly traded REIT purchased the second property and will be leasing it to the buyer of the other building. Matthew Alley 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
Doug Harper from Berkeley Point Capital led the way in facilitating a $24.2 million Freddie Mac loan for ROC Seniors Housing Fund Manager LLC, part of Salt Lake City, Utah-based Bridge Investment Group Advisors, LLC, to acquire a 132-unit assisted living and memory care community in Provo, Utah. With a seven-year, fixed-rate term and an interest only period, Mr. Harper was able to close the loan less than 45 days from engagement.
This isn’t the first time Berkeley has worked with ROC, having closed two other transactions with ROC in the past year. ROC has been active lately on the acquisition front, acquiring 14 senior living properties in six states for $230 million in September 2014 and a 345-unit independent living property from AEW Capital Partners for $26.8 million in January 2015. For the latter acquisition, ROC received a $21.2 million three-year loan from Grandbridge Real Estate Capital, arranged by Cushman & Wakefield.....................................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
Last week, we wrote of the record-high average price per unit for assisted living, and the same was true for skilled nursing, which hit a new high of $76,500 per bed, up 4.4% from 2013’s average of $73,300 per bed. Since 2011, the average price per bed for skilled nursing facilities has steadily been rising, thanks in large part to the higher acuity levels, increasing Medicare census and active capital markets. There were also a record number of transactions valued above $100,000 per bed (19), a rarity in previous years. For more in-depth discussion on this stat, plus more than 70 others, check out this year’s Senior Care Acquisition Report, which comes out later this month...................................Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today