Jeff Binder and Brad Clousing sold a 92 unit assisted living and memory care facility in Alabama. The facility, built in 2006, consists of 28 assisted living units and 32 memory care units. In addition, there are 30 independent living cottages which were built in phases through 2008. The campus consists of 20 acres and offers the new owner an opportunity for expansion. Occupancy has been holding steady at 90% and the facility’s financial performance has been stable over the past 12 months. The facility is 100% private pay. Senior Living Investment Brokerage was able to work with the Seller to obtain a price of $123,000/unit at an 8.5% capitalization rate. The attractive, well maintained facility coupled with it’s excellent reputation attracted offers from across the country, The eventual Buyer is a national owner/operator. For additional infromation, please contact Brad Clousing at email@example.com or firstname.lastname@example.org
Thursday, 23 Feb 2012
By Henry J. Reske at Newsmax.com
Buried within President Barack Obama’s 2013 budget is a proposal to triple the tax rate on corporate dividends which now stands at 15 percent, a move that would have a severe effect on retirees, The Wall Street Journal notes in an editorial.
Obama is proposing to raise the dividend tax rate to the higher personal income tax rate of 39.6 percent, according to the Journal. The rate jumps to 41 percent with the planned phase-out of deductions and exemptions and then hits 44.8 percent with the 3.8 percent investment tax surcharge in Obamacare.
“Of course, the White House wants everyone to know that this new rate would apply only to those filthy rich individuals who make $200,000 a year, or $250,000 if you’re a greedy couple. We’re all supposed to believe that no one would be hurt other than rich folks who can afford it,” the Journal wrote.
“The truth is that the plan gives new meaning to the term collateral damage, because shareholders of all incomes will share the pain. Here’s why. Historical experience indicates that corporate dividend payouts are highly sensitive to the dividend tax. Dividends fell out of favor in the 1990s when the dividend tax rate was roughly twice the rate of capital gains.”
When the rate fell to 15 percent in 2003, dividends reported on tax returns nearly doubled to $196 billion from $103 billion the year before the tax cut, and by 2006, dividend income had grown to nearly $337 billion, The Journal wrote. Economists who examined dividend payouts came to the conclusion that the tax cut played a significant role in the increase in dividend payouts.
“If you reverse the policy, you reverse the incentives,” the Journal wrote. “The tripling of the dividend tax will have a dampening effect on these payments.
“Who would get hurt? IRS data show that retirees and near-retirees who depend on dividend income would be hit especially hard. Almost three of four dividend payments go to those over the age of 55, and more than half go to those older than 65, according to IRS data.”
The Journal concluded that “all American shareholders would lose” as the taxes would make stocks less valuable and prices would fall, causing a sell-off and noting that 51 percent of adults hold shares of stock today either directly or through mutual funds.
“Tens of millions more own stocks through pension funds. Why would the White House endorse a policy that will make these households poorer? Seldom has there been a clearer example of a policy that is supposed to soak the rich but will drench almost all American families.”
Sellers – Because of the low cost of capital there is significant downward pressure on capitalization rates. The gap between interest rates and capitalization rates is meaningful right now. What does that mean for you? If you have thought about selling your facility or a portfolio, now would be an ideal time. We are achieving top-of-the-market pricing right now. Take advantage of the current market and lack of inventory available.
Buyers – Act now. I don’t know when we will see cost of capital this low again! As the economy continues to improve, occupancy and returns in Seniors Housing are continuing to improve as well. With the current interest rates, Real Estate and Seniors Housing is best option for investment and growth.
To discuss buying and selling in today’s market, please Email me at email@example.com or call 630-858-2501.
George Pappas, Bradley Clousing and Ryan Saul have sold a 60 unit Assisted Living Facility in Nevada. The property consists of 5 buildings each containing 12 units. Although the facility had enjoyed strong occupancy for 20 years (the property was constructed in 1989), in the past two years the census had fallen to 50% due to new competition and a soft housing market. In addition, the facility had it’s share of surey problems in recent years. Prior to close, the survey issues had been cleared and occupancy had been increased to 65%. The Seller was a “hands-off” group of investors. The Buyer is a national owner/operator looking to expand their presence in Nevada. The facility has adequate space to expand and accommodate additional levels of care as well as the opportunity to raise occupancy. For additional information, please contact Ryan Saul, Brad Clousing or George Pappas at 630/858-2501.
Toby Siefert handled the $3,500,000 sale of a 142 unit Assisted Living Facility in Central Virginia. Prior to the sale, the owner increased the licensed bed capacity from 191 to 225. This facility is considered an “AG Home” (Auxilary Grant) since roughly 80% of the revenues come from the acceptance of state reimbursement while the remaining 20% of residents are private pay. This palys heavily on the sale price/cap rate. The building, built in 1980 and renovated in 2008 and 2010, sits on 18 acres. This was the only seniors housing property the Seller owned. The Buyer, a local operator with multiple assisted living facilities throughout the state, used an SBA loan for financing the purchase of the stock of the company as opposed to an asset purchase. Congratulations Toby. For additional information, please contact Toby Siefert at 630/858-2501 or firstname.lastname@example.org
Senior Living Investment Brokerage provides value added brokerage services. Our job does not end with the selection of a buyer. In today’s environment, managing deals and being prepared for deals going into escrow can be crucial. We work with our sellers on the front end to make sure that they are prepared for due diligence on the back end. It is a good idea to begin collecting due diligence information early in the process. That way, we are prepared when the deal goes under Letter of Intent.
If you are thinking about selling, you should contact a professional that can help you organize for future selling needs. Please contact me at Ryan Saul or 630-858-2501 to discuss how I can help you get organized if the need to sell comes up in the future.
Brad Clousing and Jeff Binder sold a portfolio of 3 Assisted Living and Independent Living facilities located in central Illinois. The three facilities are located within 90 miles of each other and are easily accessible to major highways. The facilities had a total of 183 units with a census of 96%. The facilities were constructed between 2007 and 2009. The Seller is a national owner/operator of seniors housing who divested of these assets to utilize the capital for other projects. The Seller’s affiliated operating company will remain in place via a third-party management agreement. For additional information, please contact Jeff Binder at email@example.com or Brad Clousing at firstname.lastname@example.org