Bringing You Senior Care M&A Deals and News

October 9, 2013 Issue:
Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Surprise Management Shake-Up At HCP, Inc. Jay Flaherty is fired as CEO of HCP in surprise move by board. Read More

Recent Senior Care M&A Deals

Long-Term Care






National Operator

Cameron Hall Portfolio

$19.1 million

Ide Management Group, LLC

Summerfield Healthcare Center

$800 thousand

National Operator

Peachtree Plantation

$11.75 million

Deal of the Week
Kayne Anderson Real Estate Advisors, a private equity firm based in Florida, has just closed on the acquisition of the Aston Gardens senior housing portfolio in Florida. Although the price has not been disclosed, we believe it is somewhere near $200,000 per unit, which is a haircut from the last time this portfolio traded hands in 2006 at $460 million, or about $238,000 per unit. In that deal seven years ago, GE Healthcare Finance and Sunrise Senior Living joint ventured in a 75/25 deal for the 1,930 units when occupancy was at 95%. It was bad timing in the Florida market before the Great Recession, and occupancy tanked to below 85%. GE subsequently bought out Sunrise and put in Florida-based Discovery Senior Living to operate the portfolio. Today, the portfolio is at 97% occupancy with 82% of the units independent living and 18% assisted living. Quite a turnaround and quite a deal….. Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today
Financings of the Week
It seems if you want mezzanine financing to get your deal done these days, two choices are Contemporary Healthcare Capital (CHC) or Herbert J. Sims. CHC provided $2.315 million in mezzanine financing, on top of a $14.5 million construction loan, for a 107-unit assisted living community in northern California. Meanwhile, Herbert J. Sims raised $2.4 million to help Athena Health Care Associates buy a skilled nursing facility in Rhode Island. Sims created an entity which issued the taxable bonds to Sims’ accredited investors, and the proceeds were then invested as a preferred equity investment in the entity that was buying the 166-bed facility. And the demand for those taxable bonds? Oversubscribed by investors looking for yield….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
All we hear about are cap rates in seniors housing acquisitions, but there is another way to look at acquisitions, although perhaps not quite as useful. The ratio of price to revenues, known as the “gross income multiple,” or the GIM, is an old appraisal tool and it has been somewhat consistent in the market over the past five years. From 2008 through 2012, the GIM for seniors housing has averaged between 2.9x and 3.4x, with the two low points of 2.9x coming in both 2009 and 2010. No surprise there when the market was weak and still in its recession downturn. The two recent highs, at 3.3x and 3.4x, occurred in 2011 and 2012, respectively, which means that buyers paid an average of 3.3x to 3.4x revenues for their seniors housing acquisitions. Not a bad check when looking at a deal, but the cap rate is still the best tool….Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

Wells Fargo Capital Finance
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