Monthly Archives: April 2011

April 25, 2011
Grant Kief

Senior Living Announces Sale of Oregon Memory Care Community

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Jeff Binder, Ryan Saul and Matt Alley sold an Oregon Memory Care Community for over $240,000 per unit. Constructed in 2000, the 49 unit/75 bed campus consists of five residential buildings and one admistrative building. At the time of sale, the census was 100% and the cap rate was 10.8%. The Seller is a national owner/operator and the Buyer is a regional provider of Seniors Housing. For additional information or to request a confidential proposal to learn the value of your facility, please contact Ryan, Matt or Jeff.

April 19, 2011
Admin

Where is most activity lately?

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Many clients ask where I am seeing the most M&A activity. The short answer is anywhere that SLIB is actively working.

We can’t point to any specific type of care (assisted, skilled, memory care, independent living) that is selling more transactions than the others. There is demand for assisted and memory care due to the lack of development over the last two years. Based on the aging population and lack of new units coming on line, many anticipate a shortage of available units to meet the demand for care. Because skilled nursing relies on higher acuity and those that require care, demand for these services is higher than ever. Pressure on Medicaid rates has led to buyers looking for strategic acquisitions. Medicare and Private Pay census remains strong.

We see activity all across the country. There isn’t specific geographic regions that are seeing more activity than others. Instead, some buyers are actively looking for stable, cash flowing opportunities while others are looking for value-add, turnaround acquisitions. It doesn’t matter where the deal is, as long as it is the right deal.

Please contact Ryan Saul at saul@seniorlivingbrokerage.com for up-to-date market conditions. I would be happy to prepare a confidential proposal to determine market value for your facility.

April 14, 2011
Grant Kief

Ryan Saul Sells Indiana Not-For-Profit SNF

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Ryan Saul has sold another Indiana Skilled Nursing Facility. This is the fourth skilled nursing facility Senior Living Investment Brokerage sold for the regional not-for-profit owner/operator. The Seller focuses on hospitals and operates seniors housing when it compliments it’s existing hospital campuses. Senior Living was able to procure a Buyer that not only met the mission and operational values of the Seller, but was also financially qualified to complete the transaction. The facility is an 177 bed SNF in Northern Indiana and was operating at a loss. The Buyer purchased the facility and immediately leased it to an operator that runs 59 facilities in Indiana. For additional information, contact Ryan at 630/858-2501 or at saul@seniorlivingbrokerage.com

April 8, 2011
Grant Kief

Jeff Binder and Ryan Saul Team Up to Sell Kentucky SNF

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Ryan Saul and Jeff Binder sold an 118 bed Skilled Nursing Facility in Kentucky. Built in 1976, the one story facility is comprised of approximately 36,660 square feet on 2.57 acres. At the time of the sale, the census was 79%. The property had recently been removed from the Special Focus list and the performance had steadily improved through 2010. The Seller, a regional company, sold to focus on their assisted living assets. The Buyer had previously owned/operated in Kentucky but had exited the market in 2006. A local community bank provided the financing. The sales price was $7,800,000 ($66,102/bed). Senior Living Investment Brokerage, Inc. was able to confidentially procure multiple offers from operators throughout the country. For additional information contact Jeff at 314/961-0070 or Ryan at 630/858-2501.

April 5, 2011
Admin

Payor Mix is the Key!

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The recession has caused state tax receipts to decline dramatically, which has forced many states to face large budget gaps. Medicaid has become the largest line-item on many states’ budgets. This has caused many states to look towards Medicaid reimbursement as an area for cuts to close that gap.

What does this mean to the senior housing industry? As states contemplate cuts large and small (up to 34% has been rumored in certain states), we believe that there will be a flood of capital into Skilled Nursing Facilities that rely largely on Medicare and Private Pay residents. We also believe that there will be more of an interest in Private Pay Assisted Living Facilities as these Medicaid cuts are finalized.

How is the Senior Housing M&A market currently? We believe that there is more equity and debt financing available in this market than there has been for the past couple years. Public and private REIT’s have been sitting on a great deal of capital during the recession and are now looking to deploy that cash into senior housing facilities. Additionally, there are more lending options (i.e. bridge financing, more aggressive conventional lending) for acquirers to take advantage of than there were over the past 24 months.

What should I do to set my facility up for a successful sale at maximum value? The current acquisition market is still very “cap rate driven”. It is important to maximize profitability, while maintaining a strong payor mix. Given the current environment, capital is flowing much more aggressively into properties that have a high Private Pay and Medicare census.

How does this impact the potential sale of my facility? If you have an Assisted Living, Independent Living, or Skilled Nursing Facility with a strong payor mix, it is a great time to explore selling your senior housing facility.

Senior Living Investment Brokerage, Inc. sold approximately $300 million in transaction volume in 2010 and $90 million in the first quarter of 2011.

SLIBCO provides non-binding marketing proposals, whether you’re interested in selling soon or are just curious of your facility’s value.

Contact me via email at alley@seniorlivingbrokerage.com

Matthew Alley
Senior Vice President

April 5, 2011
Grant Kief

Ross Sanders and Jeff Binder Close on Iowa SNF

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Jeff Binder and Ross Sanders have sold a 49 Bed Skilled Nursing Facility in Southwest Iowa. Senior Living was able to procur three full price offers on the facility and close the transaction within 47 days of the execution of the LOI. Through diligent marketing efforts, Senior Living was able to find and close the transaction with a Buyer that was new to the industry. The Seller is a local for profit board; this was the only facility they owned. For additional information, please contact Ross or Jeff at 314/961-0070.