Monthly Archives: April 2016

April 29, 2016
Grant Kief

Independent Living Community Sale Handled by Jason Punzel

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Front = Woodlands

Jason Punzel of Senior Living Investment Brokerage, Inc. recently handled an Independent Living Community sale in Washington. The community consists of a 98 unit Independent Living Community with a mix of apartments and cottages on a beautiful 24 acre site. The property was built in phases between 1986 and 2003. It is located just off of Interstate 5 halfway between Portland and Seattle adjacent to a medical center. Senior Living Investment Brokerage, Inc. procured four offers from Regional and National buyers. The Buyer selected is a public REIT with a national presence. They will be leasing the property to a regional operator. The new operator has plans for major capital improvements and future expansion of additional units and services. The census at the time of sale was 95% and the cap rate was 8.7%. For additional information on this or other transactions completed by Senior Living Investment Brokerage, Inc. contact Jason Punzel at 630/858-2501 or punzel@slibinc.com

April 28, 2016
Grant Kief

Ryan Saul Drives Independent Living Sale

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sell independent living

Ryan Saul recently procured A Buyer for an Independent Living sale in Ohio. The 120 unit community is located in one of the most affluent suburbs of Cleveland. The community was originally built as an assisted living community in 1979. When the Sellers purchased the building in 2007, they renovated the property in 2007 and 2008 and elected to operate it as an Independent Living Community rather than provide adult care and services. The Buyer plans on continuing to operate the building as Independent Living but based on the original assisted living construction, they have the option to convert the building to assisted living or Medicaid Waiver in the future. The Seller is a private owner based in California and the Buyer is a private owner headquartered in Kentucky. The census at the time of sale was 88% and the capitalization rate was 6.71%. For additional information, please contact Ryan Saul of Senior Living Investment Brokerage, Inc. at 630/858-2501 or ryansaul@slibinc.com

April 27, 2016
Grant Kief

Ryan Saul & Patrick Burke Sell Seniors Housing Portfolio

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Ryan Saul & Patrick Burke Sell Seniors Housing Portfolio in Illinois. The portfolio consists of four Supportive Living Facilities (SLF) in Illinois. SLF is a classification of Assisted Living. Illinois developed the Supportive Living Program as an alternative to nursing home care for low income older persons and persons with disabilities under Medicaid. By combining apartment style housing with personal care and other services, residents can live independently and take part in daily decision making. The Department of Healthcare and Family Services has obtained a “waiver” to allow payment for services that ae not routinely covered by Medicaid. There is a Certificate of Need (CON) on SLF beds, which provides a barrier to entry and value protection for existing communities.

All the properties were built between 2002 and 2006 and were comprised of between 128 and 139 beds. The average census was 73%. Two of the properties are located in Chicago and the other two are located in Rockford and Robbins. The cap rate at the time of sale was 9.4%.

The Seller is a private owner based in Illinois that is exiting the Seniors Housing business. The Buyer is a private owner with other Supportive Living Facilities in Illinois.

For additional information, contact Patrick Burke or Ryan Saul of Senior Living Investment Brokerage, Inc. at 630/858-2501

April 26, 2016
Grant Kief

Matthew Alley Sells Medicaid Beds

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Matthew Alley Sells Medicaid Beds
Matthew Alley Sells Medicaid Beds

Medicaid Bed Sale

Matthew Alley of Senior Living Investment Brokerage, Inc. sold 13 Medicaid Beds to a local developer in Williamson County, Texas. Williamson County is located just north of Austin, Texas, and is a highly desirable market.

Sale Overview

The Medicaid Bed Sale was $195,000 or $15,000 per bed.

Senior Living Investment Brokerage, Inc. Seller Representation

The Seller is a local non-profit group that had placed the beds on “replacement status” shortly before the transaction closed. The Buyer is an owner operator based in New York and operates a facility in the county. The Buyer can benefit from an increase of three additional Medicaid beds when developing a new facility according to the State of Texas allowing a 25% increase for new development.

Contact Matt Alley

If you would like more information on this transaction or have Medicaid Beds you would like to sell, please contact Matthew Alley of Senior Living Investment Brokerage, Inc. at alley@slibinc.com or 630/858-2501 or www.matthewdalley.com.

April 25, 2016
Grant Kief

Toby Siefert Procures Residential Care & Skilled Nursing Facility Buyer

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Senior Living Investment Brokerage, Inc. recently procured a Residential Care & Skilled Nursing Facility Buyer for a community in Maine. The community was family owned and operated by the same family for over 30 years. The family was ready to retire except for the administrator who was retained by the Buyer. The property was built in 1970 and 1979 and was comprised of 47 skilled nursing beds and 66 residential care beds. The building also had accommodations for 12 adult day care beds. The overall census at the time of the sale was 98%. Senior Living Investment Brokerage, Inc. was able to procure a Buyer based out of New York. For additional information, contact Toby Siefert at siefert@slibinc.com or 630/858-2501

April 22, 2016
Ryan Saul

Minimum Wage Increase to Hurt Seniors Housing Investment?

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Increasing the minimum wage will obviously have an impact on the overall economy. Senior Living Investment Brokerage, Inc. is concerned with how such an increase will change the nursing home and senior living market. It is competitive for quality staff. If minimum wage increases will workers making the same money choose a job in the restaurant or retail industry with very little stress or will they choose to care for the most frail people with extreme responsibility, stress and demands?

Owners will need to increase expenses to take care of residents while the rents and reimbursement have been slow to increase.  The increase in minimum wage is one thing, the shortage of quality workers is another.  Owners will need to find the right mix between paying a living wage and remaining affordable to residents.  Applying this strategy will help keep quality staff and a good reputation.  If you take care of employees and you take care of residents, the bottom line should take care of itself.

If you are fed up with the constant changes in the assisted living, memory care and nursing home business and want to sell, please contact Ryan Saul for a confidential discussion about how to sell nursing home or sell assisted living.

April 22, 2016
Grant Kief

Brad Clousing and Ryan Saul Handle Confidential Assisted Living Sale

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Senior Living Investment Brokerage, Inc. handled a Confidential Assisted Living Sale in Ohio recently. The sale consisted of two assisted living communities. One of the communities is 71 units, built in 1984 and is approximately 52,291 square feet on 3.92 acres. The other assisted living community is 76 units, built in 1989 and is approximately 53,382 square feet on 5.36 acres. Overall census was 82%. Senior Living was able to procure multiple offers while maintaining confidentiality. The Buyer is a private owner based in Kentucky. All other information on this transaction is confidential. For information on how Senior Living Investment Brokerage, Inc. can assist you with a confidential sale or purchase of a seniors housing community, contact Ryan Saul or Brad Clousing at 630/858-2501

April 21, 2016
Grant Kief

Ryan Saul and Jeff Binder Sell Seniors Housing Community

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Ryan Saul sell seniors housing

Ryan Saul and Jeff Binder Sell Seniors Housing Community in Iowa. Senior Living Investment Brokerage , Inc. was hired to sell a Skilled Nursing and Residential Care Facility (SNF/RC) and an Independent Living Community (ILF). Construction was 1965 – 2003 for the SNF/RC and in 1936 and 1986 for for the ILF. The 160 bed SNF is approximately 68,457 square feet on 8.52 acres. A portion of the building lacked a sprinkler system. Census at the time of sale was 35%. The ILF is approximately 45,553 square feet on 5.41 acres. The occupancy of the ILF at the time of sale was 74%. The communities are within a half a mile of each other. The Seller was a public REIT that divested a non-core, under-performing asset. The Buyer is an operator based in Indiana. They own other communities in Iowa so they plan on gaining operating efficiencies on expenses and leverage a strong regional leadership team. They plan to invest in the skilled nursing facility physical plant to attract residents an increase census. They will also need to install a complete sprinkler system in the SNF. For additional information on this seniors housing community or to discuss other seniors housing opportunities, please contact Ryan Saul at ryansaul@slibinc.com or Jeff Binder at binder@slibinc.com of Senior Living Investment Brokerage, Inc.

April 20, 2016
Grant Kief

Matthew Alley Closes on Assisted Living Transaction

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Assisted Living Transaction
Assisted Living Transaction

Assisted Living Facility Sale

Matthew Alley of Senior Living Investment Brokerage, Inc. recently closed on a 60 unit Assisted Living facility in Kingsland, Texas. Kingsland is 65 miles northwest from the downtown Austin. The facility was built in 1997 and is located on a total of 7.87 acres. The property has maintained a census around 73% for the past couple of years.

Sale Overview

The Assisted Living transaction was $3,785,000 or $63,083 per unit.

Senior Living Investment Brokerage, Inc. Seller Representation

The Seller was a Texas based owner operator that focuses on skilled nursing. The Buyer is an independent owner operator headquartered in the Dallas/Fort Worth metropolitan area.

Contact Matt Alley

For additional information on this assisted living transaction or on other transaction completed by Matthew Alley, please contact Matt at 630/858-2501 or alley@slibinc.com or www.matthewdalley.com.

April 19, 2016
Grant Kief

Jason Punzel Sells Independent Living Communities in Washington

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Senior Living Investment Brokerage, Inc recently sold two Independent Living Communities in Washington. One of the Independent Living community is 38 units and was built in 1986 while the other property is 43 units and was built in 1987. Senior Living Investment Brokerage was able to procure multiple offers from local, regional and national buyers. The Buyer chosen is a regional operator headquartered in the Pacific Northwest. The Buyer will manage the communities and plans to invest in capital improvements at both locations. The cap rate was 11.7% with an average census of 90%. For additional information on this Independent Living Community or to inquire as to how Senior Living Investment Brokerage can assist you, please contact Jason Punzel at 630/858-2501 or punzel@slibinc.com

April 18, 2016
Grant Kief

Senior Living Investment Brokerage Handles Assisted Living Sale

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Patrick Burke, Bradley Clousing and Toby Siefert of Senior Living Investment Brokerage, Inc. recently closed on an Assisted Living Sale in Virginia. The Assisted Living sale consists of 42 units, 33,480 square feet on 5.3 acres in the scenic Appalachian Mountains of Southwestern Virginia. Of the 42 units, 28 have private bathrooms and 14 units have shared baths btween the resident rooms. The community includes 12 units dedicated to Memory Care. The purpose built building was originally constructed in 1989 with an addition in 1994. The building underwent a major renovation in 2014. Once the improvements were completed, the lender/bank (Seller) did not allow the building to reopen as it was clear ownership was headed to default. As a result, the asset was vacant at the time of sale and had not reopened after the renovations were completed. The Buyer is a Virginia based assisted living and skilled nursing operator with five other locations throughout the State. Licensing was approved upon change of ownership and the new owner hopes to open and lease up the community in 2016. For additional information on this Assisted Living sale or to inquire as to how Senior Living Investment Brokerage can assist you with your investment goals, contact Toby Siefert, Brad Clousing or Patrick Burke at 630/858-2501.

April 15, 2016
Grant Kief

Jason Punzel Closes Assisted and Independent Living Sale

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Jason Punzel recently closed on an Assisted and Independent Living Sale in Washington. The 107 Unit community is located in an affluent suburb of Seattle. The property was built in phases in 2000 and 2004 with additional land for future expansion. The census at the time of sale was 90%, the cap rate was 6.94% and the sale price per unit was over $215,000. Senior Living Investment Brokerage, Inc. was able to procure six qualified offers from regional and national operators. The ultimate Buyer was a REIT based on the east coast that plans on investing over $1,000,000 in capital improvements to make the property a “best in class” community in the area. The Seller was a local owner operator retiring from the business. For additional information on this Assisted and Independent Living sale or how we can assist you on procuring a sale of your property, contact Jason Punzel of Senior Living Investment Brokerage, Inc. at punzel@slibinc.com or 630/858-2501

April 14, 2016
Grant Kief

Senior Living Investment Brokerage, Inc. Sells Skilled Nursing Facility

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Toby Siefert, Nick Cacciabando and Pat Byrne of Senior Living Investment Brokerage, Inc. closed on the second skilled nursing facility of a four facility sale. This community was located in Massachusetts with the New Jersey transaction already closed and sales in Vermont and Connecticut pending. The entire portfolio consisted of 436 beds at $27,000,000. The Buyer and Seller agreed to close on each individual facility as the change of ownership for each location was approved. This 1976 constructed skilled nursing facility consists of 73 beds in a one story, 18,541 square foot property. The census at the time of sale was 76% with a 20.8% quality mix. of the 73 beds, there are 13 semi-private resident rooms, 1 three-bed ward and 11 four-bed wards. At the time of sale, the EBITDA was ($41,489). Despite these challenges, Senior Living Investment Brokerage was able to procure multiple offers for the portfolio as a whole. For additional information, contact Senior Living Investment Brokerage, Inc. Toby Siefert at 630/858-2501. Pat Byrne or Nick Cacciabando at 314/961-0070

April 13, 2016
Grant Kief

Matthew Alley Represents Skilled Nursing Facility Sale

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Skilled Nursing Facility Sale
Skilled Nursing Facility Sale

Skilled Nursing Facility Sale

Matthew Alley of Senior Living Investment Brokerage, Inc. procured a 62 Bed Skilled Nursing Facility Sale in Texas. Of the 62 Skilled Beds, 49 are dually certified. The building, originally built in 1964, is approximately 13,043 square feet on approximately 3.31 acres of land. Located 40 miles from San Antonio, the census at the time of sale was 48%.  Despite this obstacle, Matt was able to procure multiple offers on the Seller’s behalf.

Sale Overview

The Assisted Living transaction was $3,785,000 or $63,083 per unit.

Senior Living Investment Brokerage, Inc. Seller Representation

The Seller was a private owner operator and the Buyer is also a private owner operator seeking to expand their existing portfolio in South Texas.

Contact Matt Alley

For additional information on this Skilled Nursing Facility sale or to request a confidential proposal to determine the value of your seniors housing community, contact Matthew Alley of Senior Living Investment Brokerage, Inc. at 630/858-2501 or alley@slibinc.com or www.matthewdalley.com.

April 12, 2016
Grant Kief

Senior Living Investment Brokerage Sells Two Eastern Pennsylvania Communities

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Toby Siefert and Matthew Alley of Senior Living Investment Brokerage, Inc. recently sold two Seniors Housing Communities in Eastern Pennsylvania. The first property consisted of 118 Personal Care units and 12 Independent Living units consisting of 58,800 square feet on 4 acres. Originally constructed in the 1960’s with updates and additions through 2004. Census was 85% all of which is private pay. The other community, in the same city, has 98 Personal Care units and 13 secured Memory Care units consisting of 44,525 square feet originally constructed, expanded and renovated between 1987 and 2000. Census was 66% and all the residents are private pay. The cap rate at the time of sale was 6.8%. The Seller is a private owner exiting the business. This was their only seniors housing communities. This is the first acquisition by the Buyer. The principal is creating a new company but has significant experience as an operator of seniors housing. The new owner will focus on marketing to drive census and increase margins with plans to re-finance to a HUD mortgage after stabilizing census. For additional information on this transaction or how Senior Living Investment Brokerage can assist you, contact Matthew Alley or Toby Siefert at 610/858-2501 www.slibinc.com

April 11, 2016
Jason Punzel

Do Rising Interest Rates Impact the Value of my Senior Living Community?

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Do Rising Interest Rates Impact the Value of my Senior Living Community? By Jason Punzel

Over the past several years, interest rates have remained extremely low.  The 10 year US Treasury rate (a common benchmark for financial instruments) reached an all-time low in July, 2012, at 1.53% and today is around 1.8%, the Federal Funds Rate has been close to 0% for years and the Fed made its first rate increase this past December.   The 10 Yr Treasury hit an all-time high in August, 1981, at 15.32% and has averaged 4.64% since 1870.   Thus, there is a high likelihood that interest rates will increase as they revert back to the historic mean.

Interest rates are a measure of an investor’s desired rate of return.   An interest rate, or a rate of return, is made up of three components, risk, inflation, and time value of money (allowing someone else to use your money).   The theoretical risk free investment is a US Treasury or FDIC insured savings account/CD.   Thus, all other investments can be benchmarked by these indexes.  The greater the perceived risk of an investment, the greater the spread, or “risk premium”, will be for that investment over the US Treasury.   Today, average capitalization rates (rates of return/risk premium) for assisted living facilities are around 7.5%, or about 500 basis points above the 10 US Treasury.   This is the risk premium investors place on assisted living versus the alternative of investing in a “risk free” US Treasury bond.   When the rates increase on US Treasury bonds, typically cap rates increase on senior living communities (or any investment), assuming the risk premium stays the same.

To determine the value of a senior living community, the Net Operating Income (NOI) is divided by the Cap Rate.

Net Operating Income (NOI) /Cap Rate = Value  – (the higher the cap rate, the lower the value).

Thus, as interest rates, and cap rates increase, values go down.  Below are several examples:

NOI = $600,000, Cap Rate = 7%, Value = $8,571,429

NOI = $600,000, Cap Rate = 8%, Value = $7,500,000

NOI = $600,000, Cap Rate = 9%, Value = $6,667,000

Conclusion:

As you can see, for every 1% increase in the cap rate, the value drops by over 11%.   Thus, if interest rates continue to rise over the next several years, it could dramatically affect pricing.   If an owner has a desire to sell their community anytime in the next several years, now might be an opportune time.

Contact Information:

For a complete analysis on how interest rates can affect your community’s value, both now and in the future, contact Jason Punzel, Senior Living Investment Brokerage, INC, at 630-858-2501 x 233 or punzel@slibinc.com

April 11, 2016
Grant Kief

Toby Siefert Hired to Sell Skilled Nursing Facility in the Northeast

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Senior Living Investment Brokerage Hired to Sell Skilled Nursing Facility

Toby Siefert of Senior Living Investment Brokerage, Inc. recently sold a 30 Bed Medicare/Medicaid Certified Facility in Northern Vermont. Senior Living Investment Brokerage, Inc. was hired to market the community because it was the smallest property in the owner’s portfolio and did not fit their investment objectives. The site did not offer the opportunity for expansion. The physical plant was older and had certain limitations. Census at the time of sale was 81% with a quality mix of 50%. The Buyer is a local family that owns and operates a seniors housing/long term care community in the same town. For additional information on this transaction or questions regarding the value of your seniors housing/long term care facility, please contact Toby Siefert of Senior Living Investment Brokerage, Inc. at 630/858-2501 or siefert@slibinc.com

April 8, 2016
Grant Kief

Ryan Saul Announces Illinois Skilled Nursing Facility Sale

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Ryan Saul of Senior Living Investment Brokerage recently announced a Skilled Nursing Facility sale in Illinois. The sale also included a rehab company, in-house therapists and a staffing company. The 106 bed community was originally built in 1972 with a 16 bed, 10,000 square foot addition completed in 1985. The therapy wing was added in 2008 and an interior renovation was completed in 2009. The entire facility is comprised of approximately 40,933 square feet and is in 4.89 acres. At the time of the execution of the sales contract, occupancy was 93% on 100 functional beds and the contract price was $13,500,000. But based on a census MAC clause, the final sales price was adjusted by ($127,358). The Seller was a family owned business exiting the long-term care industry. Due to current market M & A conditions, they made the decision now was an ideal time for them to divest of their skilled nursing facility and retire.The Buyer, a private family based organization, was also based out of Illinois and owns and operates a nearby skilled nursing facility. The Buyers intend on doing an expansion to the current building with all private suites. The quality mix at the time of sale was 98%. The transaction closed at an 8.23% cap rate, 0.70 GIM and over $126,000 per bed. For additional information on this Skilled Nursing Facility Sale or for a confidential analysis of your seniors housing property, contact Ryan Saul of Senior Living Investment Brokerage, Inc. at 630/858-2501 or ryansaul@slibinc.com

April 6, 2016
Grant Kief

Skilled Nursing Facility Sale

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Skilled Nursing Facility Sale
Skilled Nursing Facility Sale

Skilled Nursing Facility Sale

Matthew Alley of Senior Living Investment Brokerage, Inc. recently closed on a Skilled Nursing Facility Sale in Texas. The sale consisted of a 51 bed Skilled Nursing Facility that had recently closed. Prior to closing of the facility, the census was 45.5%. The property, consisting of 17,545 square feet on 2 acres and built in 1970, is in a rural community approximately 100 miles west of Fort Worth.  The Buyer of the property owns the only other Skilled Nursing Facility in this rural town and many of the residents moved to the Buyer’s facility. The Medicaid beds from this facility were transferred to the Buyer at closing.

Sales Overview

The Assisted Living Facility transaction for $850,000, which was $16,667/bed and 0.65x revenues.

Senior Living Investment Brokerage, Inc. Seller Representation

The Seller is a private owner/operator and the Buyer is a regional owner/operator headquartered out of Houston.

Contact Matthew Alley

For additional information on this Skilled Nursing Facility Sale or for a valuation on your seniors housing property, please contact Matt at 630/858-2501 or alley@slibinc.com or  www.matthewdalley.com.

April 5, 2016
Grant Kief

Senior Living Investment Brokerage Sells Skilled Nursing Facility Portfolio

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Toby Siefert, Nick Cacciabando and Pat Byrne of Senior Living Investment Brokerage, Inc. recently sold a four facility portfolio of skilled nursing facilities in the Northeast. The Buyer and the Seller agreed to close on each facility separately as the change of ownership for each location was approved. A 105 bed skilled nursing facility in New Jersey was the first facility to transfer ownership. The property was originally constructed in 1963 and there is additional land on site for future expansion. The property consists of 44,652 square feet with 5 private resident rooms and 50 semi-private resident rooms. The census was 76% with a quality mix of 29.7%. The building had been well maintained with over $1.7 million in CapEx between 2010 and 2013. Senior Living Investment Brokerage, Inc. procured multiple offers for the portfolio as well as for individual facilities within the portfolio. It was in the Seller’s financial interest to sell the properties as a portfolio. The sales price for this property was $9,900,000. For additional information, please contact Senior Living Investment Brokerage, Inc. at 314/961-0070 for Pat Byrne or Nick Cacciabando or 630/858-2501 for Toby Siefert.

April 1, 2016
Grant Kief

Nick Cacciabando and Jeff Binder Procure another Skilled Nursing Facility Sale

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Senior Living Investment Brokerage, Inc. Handles Kansas Skilled Nursing Facility Sale

The 45 Bed Skilled Nursing Facility is located adjacent to a Senior Independent Living Community owned by the Seller. The Buyer will be leasing the Independent Living Community from the Seller with a three year purchase option. The Seller is a local owner/operator exiting the seniors housing business. The Buyer is a growing regional owner with an existing presence in the state. The 17,903 square foot building was built in 1965 with an addition in 1980. The skilled nursing facility sold for a 10.9% cap rate. For additional information, please contact Jeff Binder or Nick Cacciabando of Senior Living Investment Brokerage, Inc. at 314/961-0070