Nick Cacciabando and Jeff Binder sold a 55 bed Skilled Nursing/19 bed Residential Care Facility in Central Kansas. The Seller is a regional owner/operator who was making a strategic divestiture to deploy capital and resources to other investment opportunities. The Buyer is a regional long-term care provider with a strong presence in Kansas. Their core business has centered on smaller, rural, skilled nursing facilities. With a successful history of increasing profit margins, this facility fits in well with their portfolio. The Buyer completed a simultaneous sale-leaseback with a private REIT. The facility was built in 1963 with numerous additions and renovations over the years. The facility census was 65% and sold at a 13.9% cap rate. For additional information, please contact Nick or Jeff at 314/961-0070.
There are a number of variables that impact capitalization rates. Sellers always ask, “What capitalization rates are you seeing out there?” There is no easy answer.
Some of the blockbuster, portfolio deals that have been announced for 6% – 8% capitalization rates don’t tell the whole story. Was occupancy at 85% – 88% with a real, stabilized capitalization rate closer to 9%? Did the operator use a REIT and put some equity into the deal above and beyond the reported price the REIT paid, resulting in an overall higher capitalization rate?
It is dangerous to apply publicly announced capitalization rates to your operation as a means to determine value. To determine value, you need to consider age, location, condition, occupancy, payor type/rates, demographics, future upside, etc.
Allow me to put together a confidential analysis of your facility or portfolio. Senior Living Investment Brokerage, Inc. represented more transactions than any other firm over the last three years. We are able to draw from national data, as well as the large number of transactions we represented. Let us determine an accurate capitalization rate for your skilled nursing or assisted living facility in this ever-changing market.
Please contact Ryan Saul at the following link for a confidential analysis. Email Ryan Saul.
Senior Living Investment Brokerage, Inc. has sold an 114 bed/unit CCRC in a suburb of Wichita Kansas. The 64 bed nursing facility was built in 1969, the 32 Assisted Living units, 14 Alzheimer’s units and 2 Independent Living duplexes were constructed in 1999. The Nursing Facility is located a few blocks from the ALF/ILF campus. The census at the time of sale was 93% SNF and 78% for the ALF/ILF. Despite the overall census, the facility was not profitable. The Seller of the CCRC was a not-for-profit community board. After a very competitive bidding process, the successful buyer was an owner/operator headquartered in the Dallas-Fort Worth area. With an existing presence in Kansas, the Buyer anticipates improving the operating efficiencies.
Patrick Byrne and Jeff Binder have teamed up to sell a 96 bed Skilled Nursing Facility in Missouri. Located in the north-central region of the state 130 miles from St. Louis, the facility was built in 1987 with an addition in 1992. The one story facility is approximately 27,922 square feet on 4 acres. At the time of sale, the census was 90% with a 26% quality mix. The Seller was a regional owner/operator who is retiring from the long-term care business. The Buyer is a regional provider of seniors housing services based in the St. Louis MSA. The Buyer will look to boost operational and financial performance through local economies of scale and referral relationships. The facility sold for $5,470,000 at a 12.5% capitalization rate. Senior Living Investment Brokerage was able to procure numerous, pre-qualified offers on the Seller’s behalf. For additional information contact Pat or Jeff at 314/961-0070.