As debt and equity has become easier to access, the market for senior housing facilities has strengthened with cap rates, gross income multiples and per-bed numbers improving over the past 12 months.
There have been new investors entering the industry to take advantage of higher cap rates found in most other real estate sectors. They have partnered with strong regional or local operators in order to acquire both cash-flowing and turnaround facilities.
What does this mean for an owner/operator?
The time has not been better to sell your senior housing facility. While the uncertainty of “Obamacare”, Medicaid reimbursement changes and concern over the future of Medicare undoubtedly weighs on all current operators, there continues to be aggressive buyers that are willing to purchase facilities at top dollar.
What are the risks in holding?
An increase in interest rates, a retreating of debt and equity from the healthcare industry, major regulatory changes and cuts in reimbursement are all risks that could negatively affect your facility’s value.
If you are considering selling your facility, take advantage of the current strong market. Senior Living Investment Brokerage, Inc. provides non-binding marketing proposals. We would be privileged to work with you in the sale of your facility.
Contact me via email at firstname.lastname@example.org or phone at (630) 858-2501.
Jeff Binder, Brad Clousing and Ryan Saul teamed together to sell a Nebraska Assisted Living Community for $6,600,000. It is a purpose built (2002/2005), quality facility offering a mix of assisted living and memory care units. The facility is also set up to accept Medicaid residents. Although the occupancy in 2011 struggled, it has historically done well and recovered in 2012. The Seller was a partnership with plans to redeploy capital to other uses. The GP owns assets in other states and plans on focusing his attention and resources on those assets. The Buyer sees significant upside in the facility and has other operations in the region. They will focus on increasing the private pay occupancy. There is an additional 1.5 acres of land adjacent to the facility to develop independent living units or expand the existing AL/MC. For additional information contact Jeff Binder at 314/961-0070 or Brad and Ryan at 630/858-2501. www.slibinc.com
Ryan Saul and Matthew Alley sold a 150 Bed Skilled Nursing Facility in the Texas panhandle. The facility was operated by a regional operator from San Antonio and owned by a trust. The Buyer is a publicly traded owner/operator with other SNF’s in Texas. Originally built in 1963 and extensively remodeled in 2001, the facility has a strong census and a 12% quality mix. The transaction closed at a .80x GIM. Senior Living Investment Brokerage was able to filed several offers while maintaining confidentiality throughout the marketing process. For additional information on this transaction, please contact Matt or Ryan at 630/858-2501.
Since we represent approximately 30% of all announced seniors housing and nursing homes sold, we are often asked about timing and process as it relates to the sales process. We don’t believe in setting a bid deadline for a number of reasons.
1) It often limits the amount of groups that will be interested. Either they don’t have the time to meet the deadline or they prioritize other deals that they can come to terms quickly with the Seller and move to the next step.
2) Buyers typically wait until days before a bid deadline to actually look at a deal and do any level of due diligence. This leads to uneducated offers and little marketing feedback throughout the process. Momentum and competition are a seller’s best resource.
3) If a bid deadline is set when an offering goes to market and no offers come in, the offering is negatively impacted. At that point, buyers know the asset has no interest and then look to purchase at distressed levels.
4) The first offer is typically the best offer. Those buyers that drop everything to spend time on an opportunity should be rewarded with the opportunity. It doesn’t make sense to force a ready, willing and able buyer sit on the sidelines just waiting out a period of time before they submit an offer.
Buyers: Do you agree? Do you like when there is a set bid deadline? If you are one of the few that do, what do you think is the right amount of time to give to review the information?
Please contact Ryan Saul
for a proposal to see what your assisted living, independent living, memory care or skilled nursing facility is worth.
Ryan Saul has sold a 58 unit Assisted Living/30 unit Memory Care community in Fort Wayne, Indiana. The Seller, a multi-family housing owner, partnered with a skilled nursing operator to develop this state-of-the-art, 82,000 square foot AL/MC community. The Seller made a strategic decision to sell in order to focus on his core business of multi-family housing. In addition, he decided to take advantage of the strong seniors housing market. The Buyer, a regional owner/operator, sees significant untapped potential in this community. The Buyer intends to implement the Medicaid Waiver program, trim staffing and increase operating efficiencies. The facility was operating at over 97% census and sold for a 7.06% capitalization rate/$131,250 per unit. For additional information, please contact Ryan Saul at 630/858-2501 or email@example.com
Ryan Saul and Jeff Binder were engaged to sell an 824-bed, six facility skilled nursing portfolio in Illinois. The properties were constructed between 1963 and 1996. The facilities census in 2012 averaged 74% (14% private pay/15% Medicare payor mix). Revenues were $45,000,000 and the purchase price was $48,500,000. The Seller is an owner/operator of long-term care properties in the Midwest. The Buyer is an Illinois based owner/operator of seniors housing facilities. The Buyer plans on focusing on improving the overall occupancy and specifically the Medicare census. An additional benefit for the buyer will be the incorporation of the $3.0 million management fee. An Illinois bank provided financing. For additional information, contact Jeff Binder at firstname.lastname@example.org or Ryan Saul at email@example.com
Ryan Saul and Toby Siefert have sold a 65 Unit/68 Bed Personal Care Home. The facility census at the time of contract was 85% and was in the process of lowering the SSI residents. By the time the transaction closed, the census had returned to 100%. The facility sold for a 7.5% capitalization rate/1.48 GIM. This was the Seller’s only facility and the partners are retiring from the business. The Buyer, based in Eastern Pennsylvania, was looking to expand beyond the few facilities they owned in the area. The transaction was financed by the same bank that held the Seller’s mortgage. For additional information please contact Toby or Ryan at 630/858-2501 or firstname.lastname@example.org email@example.com