Monthly Archives: June 2014

June 13, 2014
Grant Kief

Ryan Saul Brokers Indiana CCRC

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Ryan Saul sold a 157 Unit CCRC in Evansville, Indiana. The 201,435 square foot building consisted of 80 Independent Living Units, 33 Skilled nursing Beds and 9 Villas on 73 acres. It opened in 1985 with an addition in 1999 (AL). In 2009, the first floor was converted to skilled nursing. The Seller was a not-for-profit trust created by a wealthy community member. The Buyer is a not-for-profit as well that hired an Indiana based operator. The operator will be able to leverage their efficiencies and operating model to improve the financial performance of the CCRC. The sales price was $12,500,000. For additional information, please contact Ryan Saul at 630/858-2501 or ryansaul@slibinc.com

June 12, 2014
Admin

The Price is Right….well, hopefully

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It is extremely important to position a community at the best, most realistic price during the first market exposure.  In the sales process, once a property has been exposed to the most active, qualified Buyers, activity dramatically decreases to the less active, less qualified “bargain” Buyers.
Drawbacks of an Overpriced Property
Many Sellers feel that an overpriced property can always be reduced if it doesn’t sell.  The danger with this approach is that by the time the property is finally reduced to its market value, it may have been on the market so long that Buyers perceive it to be a “tainted” property.  Buyers then question how long the property has been on the market and why it hasn’t sold.  Their offer to purchase, based on that knowledge, may be below its actual value.  Senior Living Investment Brokerage uses market research and our vast knowledge of the Seniors Housing market to arrive at an ask price that is both realistic and fair to the Seller but also attractive to Buyers.  This pricing process takes into account a number of key factors including property location and condition, upside, financial indicators and sales comparables, as well as current activity.  We present realistic pricing and do not attempt to “buy” our assignments.
We do not over-promise pricing expectations and our marketing proposals do not exceed what the property can support in the open market.  Over the past three years we have sold our offerings for 96% of our initial market valuation.
Contact Ryan Saul to learn more about what your community is worth and how to get top dollar in today’s market.
June 10, 2014
Admin

How do Cap Rates for Senior Living compare with Apartment Buildings?

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How do Cap Rates for Senior Living compare with Apartment Buildings?

A Cap Rate is the most commonly used method in determining the value of a real estate asset.   A cap rate is derived by dividing the annual net operating income by the purchase price.   The higher the cap rate, the lower the price of the asset.   The greater the perceived risk is in an asset, the higher the cap rate, and thus, the lower the price.
According to Senior Care Investor, in 2013 the average cap rates for an independent living facility was 8.2%, the average cap rate for an assisted living facility was 8.7%, and the average cap rate for a skilled nursing facility was 13%.  According to Freddie Mac’s survey in February, 2014, the national average for apartment buildings in the US was 6.4%.
Why do senior living assets have a higher cap rate than apartment buildings?  Senior living assets are still considered riskier because an investor is buying the real estate and the operating business instead of just the real estate and leases as is the case for apartment buildings and commercial real estate.
However, this also presents an opportunity for those who are good at operating seniors housings communities to make a greater return on their investment than investing in lower cap rate real estate assets.

For more information on what your Seniors Housing Community may be worth, please contact Jason Punzel at punzel@slibinc.comor 630-858-2501.
June 6, 2014
Grant Kief

Matt Alley and Jeff Binder Handle Texas Memory Care Facility Sale

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Kerrville Sale

Jeff Binder and Matt Alley recently sold a 36 unit/48 bed Texas Memory Care Facility approximately 65 miles northwest of San Antonio. Built in 1997, the property is approximately 25,000 square feet and is situated on 2.5 acres of land. The community was underperforming due in part to recent turnover in staff. The census at the time of sale was 56%. The Buyer expects to be able to take advantage of increasing the marketing budget and stabilizing the staffing. The Seller is a national REIT divesting non-performing assets. The Buyer is a regional owner/operator based in Texas. For additional information, Please contact Matt Alley at alley@slibinc.com or Jeff Binder at binder@slibinc.com

June 6, 2014
Grant Kief

Brad Clousing and Jeff Binder Sell Two Residential Care Communities in Arkansas

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Jeff Binder and Brad Clousing were selected to assist in the disposition of 2 Residential Care Facilities in Arkansas. Located approximately 85 miles from each other in the northern region of the state, the two communities offer a combined total of 102 units. Both buildings were constructed in 1997 and each consist of 51 units (45 private and 3 semi-private). Each building is on approximately 4.5 acres. At the time of the sale, the combined census had stabilized at 62%. The Seller was two separate but related entities. The Buyer is a regional owner/operator based in Missouri. They plan on increasing the license to Level II which will provide for additional reimbursement and census enhancement opportunities. For additional information, please contact Brad Clousing at clousing@slibinc.com or Jeff Binder at binder@slibinc.com