Brad Clousing sold a luxury boutique hotel in Melbourne, Florida, for a Chicago based lender. The hotel was originally built in 1973 and had significant hurricane damage in 2006, renovated and reopened in 2008.
Given the large room sizes, attached restaurant (currently vacant) with commercial grade kitchen and excellent location, the property was very appealing as an assisted living conversion. The building overlooks the intercoastal waterway with unobstructed water views less than one mile from Holmes Medical Center.
The Buyers have projected approximately $1,75 million will be spent to complete the conversion to assisted living. The purchase price was $4.5 million for what will become a 129 unit ALF. For additional information contact Brad Clousing at 630/858-2501.
Deals are getting done and there IS lending in the market. However, we are finding that relationship banks are the main sources providing financing for our acquisitions. You must have a long-term, existing relationship with a proven track record in order to obtain financing in today’s market.
If you have access to those types of lending relationships, make sure you take care of them. Be proactive in keeping in touch with your lender and remind them how well you are doing.
If you are looking for that next lending relationship, be on the look out for opportunities. Maybe a lender needs some help/advice with a troubled long-term care or Seniors Housing asset? Network with other successful operators and try to get referred to who they use for financing.
As the economy improves, our hope is that lending will continue to improve. More liquidity will be good for everyone and will improve the overall market.
Please Email Ryan Saul by clicking on the following link to learn more about the current market. Email
George Pappas and Bradley Clousing sold a 40 unit Independent Living Facility in Washington. Built in 1983, all of the units are one bedroom and are subsidized through HUD with a HAP contract that guaranteed all the rents. The facility is age-restricted to reseidents 55 and older. The Seller was the original developer and is exiting the seniors housing market. The Buyer, a regional non-profit, plans on renovating the building and utilized state and public funding to finance the acquisition and renovation. The facility sold for a 9.25% capitalization rate. For additional information, contact George or Brad at 630/858-2501.
The number of potential Sellers exploring the option of divesting has doubled in the last year. So why the lack of quality inventory on the market? The answer, no upside value.
Sellers realize that the lenders and buyers are back in the market aggressively looking for acquisitions. However, the market is not paying for upside. Lenders, appraisers, and buyers are only paying for what your property is worth today. In order for Sellers to maximize their value, my advice is to increase the census, improve cost centers and/or build that valuable program. A buyer won’t pay you for the work they will have to do to see that value. If you want the value, improve the cash flow and you will be rewarded accordingly.
Please contact at Ryan Saul for a confidential proposal to determine the market value of your property.