Monthly Archives: November 2011

November 29, 2011
Grant Kief

Ryan Saul and Brad Clousing Sell Ohio CON

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Brad Clousing and Ryan Saul have sold an Ohio Certificate of Need. The Seller had purchased a portfolio of facilities and elected to close one of the facilities located in Toledo due to poor census. The decision was made to sell the 100 Bed CON and the facility separately. The Buyer plans on developing a new campus at another nearby location that would include both skilled nursing and assisted living on the same campus. For additional information, please contact Ryan or Brad at 630/858-2501.

November 21, 2011
Grant Kief

Brad Clousing Brokers Florida Skilled Nursing Facility

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Brad Clousing has sold a 101 Bed Sarasota, Florida, Skilled Nursing Facility. This was the only skilled nursing facility owned by the Seller, a local non-profit organization. The Seller will continue to own and operate the adjacent assisted living facility and age-restricted apartments. Although occupancy has been an issue recently(61%), the facility was still profitable. The facility is in good physical condition and is competitive in the local market. The Buyer is a regional owner/operator of 6 other SNF’s and plans to increase census and improve operating efficiencies. With the quality physical plant coupled with the favorable Sarasota market, the Buyer should be able to generate strong returns. The 44,651 sq. ft facility was built in 1967 with an addition in 1990. Brad was able to generate multiple offers by actively marketing the facility to qualified Buyers. Thje final sales price was $4,975,000 ($49,257/bed) which translated into a cap rate of 6.8% and a GIM of .9x. For additional information, please contact Brad Clousing at 630/858-2501 or clousing@slibinc.com

November 16, 2011
Admin

Seller Motivation

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On every offering we bring to market, potential buyers are curious to know why the owners have decided to sell. As we reflect on the 40+ facilities we have sold so far this year, and the current active inventory, we find four common motivations for a sale. First, and probably most common, the subject property was not part of the owner’s core business niche. They acquired an assisted living facility when they actually specialize in skilled nursing, or vice versa. Other common reasons are when a small operator wishes to retire from the business altogether, or an operator who got into the business primarily as an investment vehicle, realizes that demand (and prices) is high and capital gains taxes are historically low. Lastly, for the larger multi-facility owners, it’s a good time to sell one or a few “outlier” assets in order to reinvest and strengthen their presence in their core geographic markets.

If you find yourself identifying with one of these categories, we have the experience to confidentially attain your investment objectives. Please contact Toby Siefert at siefert@slibinc.com or 630-858-2501 to have a confidential discussion of the market and its impact on your senior housing community.

November 14, 2011
Admin

Private Equity not so Private anymore

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The Seniors Housing market is as strong as ever. Many private equity groups have been hunting for places to put money to work. While the debt crisis in Europe and lackluster economy has chilled private equity’s interest in commercial real estate, Senior Housing continues to be a lucrative, safe bet. Capitalization Rates have remained stable despite volatility in other sectors/markets.

The biggest problem is that private equity looks for portfolio transactions versus smaller, one-off deals. The bigger the deal, the bigger the return. There is a shortage of those deals, if any out there.

I predict that smaller private equity funds are going to look for individual assets to purchase. They can buy individual properties at an attractive price, assemble a sizable portfolio one property at a time, then sell for a portfolio premium.

If you are an owner of nursing homes or assisted living facilities, now would be an ideal time to look into selling. Since private equity groups don’t operate, a sale-lease back or sale-manage back transaction might be a good option. For those looking to sell and get out of the business, many private equity groups are already aligned with operators.

Please contact Ryan Saul at 630-858-2501 to discuss if now is a good time to sell.

November 9, 2011
Grant Kief

Ryan Saul Announces Sale of Connecticut Skilled Nursing Facility

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Ryan Saul has sold a 150 bed Skilled Nursing Facility for a not-for-profit hospital organization. Ryan was able to secure a Buyer that not only met the mission and operational values of the Seller, but was also financially qualified to complete the transaction. This was the only long-term care facility the hospital system owned. Although the census was strong, the facility’s heavy expenses more closely resembled a hospital resulting in a large operating loss. The Buyer is a regional owner/operator which utilized Sabra REIT for the acquisition. The Buyer is an experienced Connecticut operator and specializes in turn-around opportunities. The census at sale was 90% with a 37% quality mix. For additional information, please contact Ryan Saul at 630/858-2501 or ryansaul@slibinc.com