Monthly Archives: May 2016

May 31, 2016
Grant Kief

Assisted Living and Memory Care Community Sale

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Assisted Living and Memory Care Community Sale in Florida conducted by Brad Clousing of Senior Living Investment Brokerage, Inc. The transaction consists of an Assisted Living and Memory Care Community located just outside the Tampa MSA. The community features 30 assisted living units and 21 memory care units. The 44,000 square foot building was originally constructed in 1963 and completely renovated in 2008. The census at the time of sale was 95%. Although the community is not purpose built, the building underwent extensive renovation in 2008 giving it the look, feel and functionality of a purpose built assisted living and memory care community. The physical plant and large resident floor plans provide for potential double occupancy and an increase in the bed capacity for future revenue growth. The Seller was a local owner operator looking to exit the market. The Buyer is a private capital group that partnered with a regional operator. The 9.4% capitalization rate was higher than current market rates given the immediate cap ex needs, deferred maintenance and inconsistent operating trends. Senior Living Investment Brokerage, Inc. was able to procure multiple qualified offers within weeks of commencing marketing and was able to negotiate the Assisted Living and Memory Care Community Sale at over $100,000 per unit on the Seller’s behalf. For additional information on this Assisted Living and Memory Care Community Sale, please contact Brad Clousing of Senior Living Investment Brokerage, Inc. at 630/858-2501 or clousing@slibinc.com

May 27, 2016
Grant Kief

Skilled Nursing Sale in Georgia

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Skilled Nursing Sale recently handled by Brad Clousing in Georgia. This transaction consists of a 102 Bed Skilled Nursing sale in Pineview, Georgia. The community has been leased at a rate of $50,000 per month for 10 years. The Skilled Nursing Community benefits from limited competition in the area, stable operations and an excellent reputation in the surrounding area. The tenant is an experienced Georgia operator. The Landlord was the previous owner/operator seeking to exit Georgia operations and focus on their Florida portfolio. The asset was built in 1967 with an addition and renovation in 2013. The census at the time of sale was 67%. For additional information on this Skilled Nursing Sale or to inquire about other opportunities, please contact Brad Clousing of Senior Living Investment Brokerage, Inc. at 630/858-2501 or clousing@slibinc.com

May 25, 2016
Grant Kief

Seniors Housing Sale in Alabama

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Seniors Housing sale handled by Brad Clousing of Senior Living Investment Brokerage, Inc. in Alabama. The transaction consisted of three Assisted Living and Independent Living Communities located in Auburn, Alabama. All three assets are purpose built and benefit from close proximity to each other as well as a total of 84 SCALF beds which are very difficult to acquire in Alabama. Azalea Place was built in 1999 and features 72 units. Camellia Place, also constructed in 1999, features 58 units and is licensed for 42 SCALF beds. Magnolia Place, constructed in 1996, features 53 units and is also licensed for 42 SCALF beds. The Seller, East Alabama Medical Center (EAMC), was looking to exit the assisted living market in order to focus on core operations. The Buyer is a partnership between a national equity investor and an Alabama based operator. They intend on making a significant investment into the physical plants at each location. The assets will be re-branded and re-positioned in the market. Additionally, there will be a heavy focus on programming and staffing efficiencies. The three Assisted Living Portfolio totaled 183 beds and sold for $16,531,500. The overall census was 85% and the Gross Income Multiple was 2.8X. For additional information on this seniors housing sale or on how Senior Living Investment Brokerage, Inc. can assist you with a purchase or sale, contact Brad Clousing at clousing@slibinc.com or 630/858-2501.

May 23, 2016
Grant Kief

Assisted Living Community Sale in Georgia

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Brad Clousing, Managing Director of Senior Living Investment Brokerage, Inc. recently orchestrated an Assisted Living Community Sale in Nashville, Georgia. The asset features 12 assisted living units and 14 memory care units in the 18,603 square foot building. Originally built in 1997, the physical plant underwent an extensive renovation in early 2015 and the lease up began in August of 2015. The sale also included additional land for future potential expansion. The transaction was strucured as a sale leaseback. The seller also recently sold another community locatd approximately 25 miles south of this property in a sale leaseback transaction as well. The Buyer is a publicly traded REIT. The community was fully occupied at the time of closing and will benefit from the additional land for expansion of 20 to 24 units. The sales price for the 26 unit building was $2,700,000 which translates to $103,846 per unit. The cap rate was 11.3% and the Gross Income Multiple was 2.4X. For additional information on this Assisted Living Community Sale or how Senior Living Investment Brokerage, Inc. can facilitate the confidential sale of your seniors housing community, contact Brad Clousing at 630/858-2501 or clousing@slibinc.com

May 20, 2016
Grant Kief

Assisted Living Community Sale

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Assisted Living Community Sale in Georgia conducted by Brad Clousing of Senior Living Investment Brokerage, Inc. The transaction consists of an Assisted Living Community sale in Valdosta, Georgia. The asset features 78 assisted living units and 31 memory care units. The building consists of three distinct areas: Laurel Oaks, which was constructed in 1978, Willow Wood, constructed in 2009 (both of which offer assisted living services), and The Elms, constructed in 2013 which offers memory care services. The Seller converted the entire building from a personal care home to the newer assisted living license as part of the renovation in 2013. The Assisted Living Community sale was structured as a sale leaseback transaction. The Seller has another assisted living community for sale currently under contract located approximately 25 miles north of this assisted living community. This transaction is a sale leaseback as well. The Buyer is a publicly traded REIT. For more information on this Assisted Living Community sale or how Brad can help you with the valuation and sale of your seniors housing property, contact Brad Clousing of Senior Living Investment Brokerage, Inc. at clousing@slibinc.com or 630/858-2501

May 19, 2016
Grant Kief

Skilled Nursing Portfolio Sale

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Ryan Saul and Patrick Burke of Senior Living Investment Brokerage, Inc. were engaged to handle a Skilled Nursing Portfolio sale in of three facilities in Colorado (1) and Utah (2). The Seller is a private owner based in Illinois that is exiting the seniors housing business. Although the Seller is an experienced owner/ operator, these three assets proved to be difficult to operate from Illinois as the Colorado and Utah skilled nursing market became more competitive and a “hands on” operation was necessary. The Buyer is a real estate owner in the Midwest that leased the communities to seasoned operators in Colorado and Utah. The Colorado Skilled Nursing Facility was built in 2013 and is 154 beds on 1.63 acres. The census was the best of the portfolio at 70% and had a 32% quality mix. The first Utah Skilled Nursing Facility was built in 1999 and is 120 beds on 4.7 acres. The census for this community was 58% with an impressive 39% quality mix. The second Utah Skilled Nursing Facility was built in 2001 and is 180 beds on 2.48 acres. The census for this facility at the time of sale was only 47% but boasted a 28% quality mix. The Skilled Nursing Portfolio sale was $31,780,000 at a favorable 8.69% cap rate and a 1.4 Gross Income Multiple. Senior Living investment Brokerage, Inc. was able to procure multiple qualified offers on this Skilled Nursing Portfolio sale within the first weeks of commencing marketing. For additional information on this Skilled Nursing Portfolio sale, please contact Ryan Saul at ryansaul@slibinc.com or Patrick Burke at burke@slibinc.com of Senior Living Investment Brokerage, Inc. 630/858-2501

May 18, 2016
Ryan Saul

Nursing Home Sales lead to poor quality – I think not

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I ran across this article that attempted to draw the conclusion that nursing home sales are bad for the industry and results in poor quality. I think not.

Repeated nursing home sales linked to poor quality

nursing home sales

We often sell nursing homes that are in trouble and need a new owner. The residents need a nursing home to sell and a new owner. There are many more success stories of nursing homes that sell resulting in better care moving forward. There are a lot of holes in this article and I am confident that the previous history, prior to a sale, is being captured in the results. Also, it takes time to turn a property around and change the culture from providing questionable care to improving quality and the reputation. If you have a troubled nursing home it just might be time to sell. If you specialize in providing quality care, you might be the ideal candidate to buy a nursing home and turn it around. Contact Ryan Saul from Senior Living Investment Brokerage, Inc. for more information.

May 18, 2016
Grant Kief

Assisted Living Sale Procured by Patrick Burke

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Assisted Living sale was recently handled by Patrick Burke of Senior Living Investment Brokerage, Inc. The transaction consisted of a 48 unit/ 96 bed Assisted Living Community which included Memory Care units. The facility is licensed for 64 Adult Care Home Beds and 32 Special Care beds. The property was built in 1984. Located in Greensboro, North Carolina, the community was purchased by its current owners in 2004. The property is three stories with 16 units/ 32 beds on each floor. All of the units are 315 square feet with a private bathroom with a shower. Each room can accommodate two residents using twin bedding. The occupancy based on private and semi-private resident rooms being utilized was 71/ 83 occupiable beds or 85%. The facility is approximately 50% Private Pay and 50% Medicaid. There have been many changes in the reimbursement on both the Adult Care and Special Care beds which caused the Net Operating Income to recently decrease. The Seller was a father and son who were not the operators of the facility. Due to the recent uncertainty with Medicaid reimbursement, the partners made a decision to sell their only seniors housing asset. Senior Living Investment Brokerage, Inc. was able to procure several pre qualified offers on the Assisted Living Community. The cap rate was not applicable to the $3,650,000 sales price due to the underperformance of the property. The GIM for the facility was 1.81X. The Buyer is a national owner/ operator who currently has an operating presence in North Carolina. They new owners plan on spending upwards of $500,000 upgrading the facility and also utilizing their marketing expertise couple with their economies of scale to improve census and net operating income. For additional information on this transaction or for an analysis of the value of your Assisted Living Community, Memory Care Community, Independent Living Community, Skilled Nursing Facility or CCRC, please contact Patrick Burke at burke@slibinc.com or 630/858-2501.

May 17, 2016
Grant Kief

Skilled Nursing Sale Handled by Patrick Byrne and Jeff Binder

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Skilled Nursing Sale recently handled by Patrick Byrne and Jeff Binder of Senior Living Investment Brokerage, Inc. The Skilled Nursing sale was a rare opportunity to acquire two facilities consisting of 360 beds within 50 miles of St. Louis. Senior Living Investment Brokerage, Inc. was able to procure double digit offers within weeks of commencing marketing of the properties and ultimately selling the two Skilled Nursing Facilities above the stated list price. The first Skilled Nursing Facility at 240 beds, is one of the larger SNF’s in the state. Due to original construction in 1977 coupled with a saturated north county market, the census consistently hovered around the 60% range. With a planned infusion of capital, the new owner hopes to improve the quality mix and gradually grow into a higher, more stable census. The original building was constructed in 1919 in the other facility, but the resident rooms were located in wings constructed in 1971 and 1977. This facility also struggled to maintain census but was profitable due to low expenses. The census at the tme of sale was 70%. Both facilities are primarily Medicaid facilities. The properties sold for a combined price of $39,000 per bed but many in the market evaluated the package at a lower functional bed count. But the draw of the upside in the balance of beds was enough to overcome the lack of profitability and the recent downward trend in the operations. The combined cap rate at the time of sale was 5.9%. The Seller was a local estate which was liquidating assets and the Buyer is a large Midwest operator. The sales price for both properties was $14,000,000. For additional information on this sale or on how Senior Living Investment Brokerage, Inc. can assist you with the disposition or acquisition of seniors housing properties, please contact Jeff Binder at binder@slibonc.com or Patrick Byrne at byrne@slibinc.com 314/961-0070.

May 12, 2016
Jason Punzel

Senior Housing Valuation

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Senior Housing Valuation by Jason Punzel

According to the Senior Care Acquisition Report 2016, the average price per unit for Assisted Living Facilities in 2015 was $189,200 and for Independent Living Facilities it was $192,900.   However, is this really a good metric for senior housing valuation?

In 2015 the average price per unit for Class A Independent Living Facilities was $248,500 and Class B was $138,300.   We currently have a Class C, 110-unit Independent Living Community under contract in the Pacific Northwest that will sell for less than $40,000/unit.  As a company, last year we sold Skilled Nursing Facilities from $10,000-$130,000+/bed and Assisted Living Communities from $20,000-$300,000+.  There are some older facilities in rural areas that have negative EBITDA which may not have any interested buyers and thus have little, if any value.  Additionally, there are facilities in downtown areas of San Francisco, Seattle and New York for example that would sell for $500,000+/unit if they were actively marketed by Senior Living Investment Brokerage, INC today.

Conclusion:

Because of the wide range in prices, we strongly recommend that owners focus more on cap rates and internal rates of return for senior housing valuation.   Ultimately, buyers are interested in a return on their investment and they will use these metrics to determine the price they will pay.   The price per unit then becomes the result of and not the cause of the price.

Contact Information:

To discuss senior housing valuation please contact Jason Punzel at 630-858-2501 x 233 or punzel@slibinc.com  or Joy Goebbert at 630-858-2501 x 230 or goebbert@slibinc.com.

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May 3, 2016
Ryan Saul

REITs slowing down – Is the Seniors Housing Market?

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sell assisted living

We all read the reports that REITs slowing down their investment in Seniors Housing and nursing homes but Is the Seniors Housing market? Clearly they have been driving the market for the past few years with billion dollar and multi-million dollar transactions . However, is the overall Seniors Housing market slowing down? I don’t think so.

The dollar volume and mega portfolio transactions might be off from the record years, but the overall market is thriving.

The Real Estate Investment Trusts (REIT) heavy in nursing homes and assisted living have been met with record pricing.  In addition, their cost of capital has increased.  Both these factors have led to the REITs slowing down their activity.  Consequently, we have seen an adjustment in pricing.  Pricing might have adjusted slightly down, but it still remains near record levels. The average price-per-unit for Seniors Housing in the first quarter stood just under $170,000 per unit. That is a 5% quarterly decline and approximately 1% lower than the average price-per-unit of 2015.  This adjustment in pricing has created opportunity for buyers, not using REITs, to acquire communities.  If you have been trying to buy nursing home or buy assisted living, now is your time.  Interest rates are still at historic lows.  Lenders have capital and are aggressively looking to place it, especially in long-term care and Seniors Housing.  So, if you have thought about sell assisted living or selling nursing home, contact Senior Living Investment Brokerage to match you up with the thousands of active buyers we are in contact with on a regular basis.

I believe 2016 is going to be the year of the nursing home and individual sales of assisted living.  Nursing homes are still trading between 12%-13% capitalization rates and the cost of capital is in the 3%-5% range.  This offers significant opportunity.  Over $100 billion of nursing home assets across the United States are still privately owned, prime for acquisition.

If you have thought about buy or sell assisted living or buy or sell nursing home, contact Ryan Saul to discuss your options.