The Dealmakers Forum E-Newsletter, April 29, 2015 - Capitol Seniors Housing in charge of fill-up


Bringing You Senior Care M&A Deals and News

April 29, 2015 Issue:

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Brookdale May Be One Step CloserWith two new board members and some corporate governance changes, Brookdale Senior Living seems to be heading on the path of a major real estate event...................... Read More  



Recent Senior Care M&A Deals
Home Health Care & Hospice    
Acquirer Target Price
Humana At Home Your Home Advantage N/A
Long-Term Care    
Not disclosed The Verandas $3.95 million
Capitol Seniors Housing Arbor Terrace at Citrus Park
$20 million
DiNapoli Capital Partners Alta Manor Assisted Living $16.55 million
NorthStar Healthcare Income, Inc. 15 CCRCs $640 million


Deal of the Week 

There is always a good amount of risk when purchasing a seniors housing community at Certificate of Occupancy. While you avoid the risks associated with development and construction costs, you are saddled with the burden of fill-up. But Capitol Seniors Housing (CSH) is up for the challenge, having recently purchased, along with its joint venture partner Harvard Management Company, a 92-unit/109-bed assisted living/memory care community in Tampa, Florida.

The newly opened community was developed by a joint venture between Walt Chancey and Rookis Development Company and presold to CSH prior to breaking ground for an agreed price of $20 million, or $217,400 per unit. CSH has brought in The Arbor Company (a manager it has worked with in the past) to operate the community, which features 52 assisted living units, 26 memory care units and 14 transitional memory care units (called “Bridges”) for those residents in need of a few more services. About a third of the licensed beds have already been preleased, and residents have just started moving in.

Assuming a two-year stabilization period (a conservative length of time), we estimated the community to generate approximately $4.9 million in 2017 revenues and $1.6 million in EBITDA. If it fill faster than projected, these numbers will move up as rate increases will be easier to come by.

Given the existing product in the area, this new development should stand out as one of the better properties in its market, which should lessen CSH’s fill-up risk...........................................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 Multifamily Finance announced today that it provided a $10.9 million fixed-rate HUD loan for an experienced owner/operator of skilled nursing facilities to refinance its 133-bed facility in Northern Illinois. Joshua Rosen, out of Capital One’s Chicago office, originated the loan, which will refinance existing debt on the property at a lower, long-term rate. The facility was built in 1962, expanded in 1985, and substantially renovated between 2005 and 2012. Also, the current owners, who purchased the facility in 2012, renovated the residents’ rooms and bathrooms since taking over, so the facility is relatively modern. It is also well occupied and well positioned in its market. In addition to providing the loan, Mr. Rosen also structured a HUD-approved master accounts receivable line, giving the borrower more flexibility in its operations............................................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

With these higher valuations seen in 2014 (according to the 2015 Senior Care Acquisition Report), it should surprise no one that the average price paid per unit for “A” quality independent living communities rose 21.8% from $228,200 in 2013 to $277,900. But, the lesser quality deals didn’t hold back either. In fact, the average price paid per unit for “B” properties rose 55.8% from $99,600 in 2013 to $155,200. This goes to show that in today’s market, just about any piece of property will garner interest from a buyer, as long as it can show potential for profits........................................Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today




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