Monthly Archives: June 2016

June 30, 2016
Matt Alley

Independent Seniors Housing Sales

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Independent Senior Housing Sales

Independent seniors housing sales are one trend that I have seen in ten years as a Broker with Senior Living Investment Brokerage, Inc.  Independent (or “mom and pop”) owner-operators are having more difficulty running their long-term care or seniors housing facility in a profitable manner than in the past.  This is leading to an increasing number of independent seniors housing sales.

I believe that several factors have led to the squeeze that independent operators have felt recently.

Technological Disadvantage

As systems have gotten more complex (and more expensive), the larger regional and national operators have been able to afford the best systems for reimbursement, payroll, employee benefits, etc.  It is common for a larger party to take over a facility run by an independent operator and be able to increase their Medicaid and Medicare reimbursement strictly from an upgrade in systems.

Marketing Ability

Larger regional and national operators have the ability to smooth marketing expenses over multiple facilities in a similar market.  If an independent operator owns only one community, it is often cost-prohibitive to hire an employee solely focused on marketing. The marketing responsibility typically falls on the owner, executive director or business office manager, who are all in charge of a multitude of daily responsibilities.

Recent Legislation

The passage of the Affordable Care Act has made it more expensive for many independent operators.  The mandatory offering of health insurance can squeeze already thin margins and make it very difficult to expand the employee base.  If the federal minimum wage is increased, that may make this effect even more dramatic.

Increased Development

The recent boom in development of long-term care and seniors housing facilities throughout the country (especially in urban and suburban markets) has made it more difficult on independent operators.  Increased development has led to a greater supply of newer facilities on the market, which doesn’t allow for independent operators to compete on a physical plant level.

Stress Levels 

The amount of time and energy it takes to run a senior living facility independently as well as the overall emotional and physical stress can be overwhelming. Owners are often wearing many hats and handling responsibilities beyond their own.  A lot of owners are aging out as well having owned facilities for 20+ years.

These factors as well as others are making it more difficult for independent owner-operators to be profitable and compete. If you are an independent owner-operator considering your options, I’d be happy to prepare a complimentary confidential marketing proposal of your facility or portfolio.

At Senior Living Investment Brokerage, Inc., we have a long track record of independent seniors housing sales and serving the needs of independent owner-operators.  We have completed several transactions recently for single facility operators.

If you have any questions on the topic of this post, please contact Matthew Alley at 630-858-2501 ext. 225 or alley@slibinc.com or www.matthewalley.com

June 22, 2016
Grant Kief

Seniors Housing Portfolio Sale

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Seniors Housing Portfolio Sale

Tom Rusthoven of Senior Living Investment Brokerage, Inc. recently represented a a regional owner operator with their Seniors Housing portfolio sale. The Pines Seniors Housing portfolio sale was a total of 9 Assisted Living and Memory Care Communities located in Detroit’s northern suburbs and extended communities. The total Seniors Housing portfolio sale consisted of 188 licensed units offering quality care to their respective, local communities. The Assisted Living and Memory Care Communities were built between 2005 and 2015. The purchase price was $30,800,000 or $162,000 per unit.

Professional Representation

Tom Rusthoven was able to procure multiple, qualified offers on the Assisted Living and Memory Care portfolio on the Sekker’s behalf. The Seller was a local regional owner operator with an eye on taking advantage of the current, aggressive capital markets. The Buyer selected, is a West Coast based national REIT that partnered with an East Coast operator. Both national entities are currently expanding their presence in Michigan. Tom was able to introduce them to their first acquisition in the state.

Confidential Sale

Throughout the Seniors Housing portfolio sale, Senior Living Investment Brokerage, Inc. was able to keep the transaction confidential to preserve the reputation of the facilities with the staff and within their respective markets.

Additional Information

For additional information on this Seniors Housing Portfolio Sale or other confidential opportunities currently available, please contact Tom Rusthoven of Senior Living Investment Brokerage, Inc. at rusthoven@slibinc.com or 630/858-2501

June 17, 2016
Grant Kief

Memory Care Facility Sale

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Memory Care Facility Sale

Jason Punzel recently facilitated a Memory Care Facility sale located in California. The community is located about 70 miles north of Sacramento and 20 miles south of Chico. The first phase of the memory care community was built in 2002 and was extensively renovated and expanded in 2008. The community consists of a 33 unit, 55 bed main building and a 3 unit, 5 bed smaller building next door for a total of 36 units and 60 beds. The census at the time of sale was 50 residents. The property encompasses 2.5 acres and has an additional 2.5 acres (5 acres total) for future expansion.

Sale Overview

The Memory Community Sale was $5,950,000 or $165,300 per unit. The capitalization rate at the time of sale 9.0%.

Senior Living Investment Brokerage, Inc. Seller Representation

The Seller is a local owner operator who is retiring from the business. The Buyer is a local owner operator that owned two additional memory care communities nearby and is working on expanding his regional footprint.

Contact Jason Punzel

For additional information on this Memory Care Facility Sale or for a valuation on your seniors housing property, please contact Jason Punzel of Senior Living Investment Brokerage, Inc. at punzel@slibinc.com or 630/858-2501

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June 15, 2016
Grant Kief

Independent Living Sale by SLIB Team

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Confidential Independent Living Sale

Independent Living Sale in the Northwest recently completed by Jeff Binder, Matthew Alley and Jason Punzel. At the direction of the parties involved in this transaction, Senior Living Investment Brokerage, Inc. agreed to keep the name and location of this Independent Living sale confidential. The Independent Living sale consisted of 110 units originally built in 1972. The 83,000 square foot building on approximately 5 acres of land, consisted of a variety of resident unit types including companion suites, studio units, as well as one bedroom and two bedroom units. The census at the time of sale was 74%.

Seller Representation

Senior Living Investment Brokerage, Inc. represented the Seller in the Independent Living Sale. The Seller is a national operator headquartered in Portland looking to divest of this non performing asset. The Buyer is a real estate owner headquartered in Canada. The Independent Living Community will be managed by a well respected national operator.

Contact Senior Living Investment Brokerage, Inc.

For additional information on this confidential Independent Living sale or on how Senior Living Investment Brokerage, Inc. can assist your company with a seniors housing sale, contact Jeff Binder at binder@slibinc.com 314/961-0070 or Matthew Alley at alley@slibinc.com or Jason Punzel at punzel@slibinc.com 630/858-2501

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June 13, 2016
Grant Kief

Assisted Living Community Sale

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Assisted Living Community Sale

This transaction consists of two assisted Living communities with a total of 86 units located in two different towns in South Dakota. They are about an hours drive from one another. The first assisted living community is comprised of a total of 60 units. It is approximately 25,663 square feet and is situated on approximately 1.9 acres of land. It was originally constructed in 1995 as a purpose built assisted living community. The other assisted living community is comprised of a total of 26 units. It is approximately 15,800 square feet and is situated on approximately 4.73 acres of land. It was originally constructed in 1997 as a purpose built assisted living community. Both properties have been very well maintained and enjoy good reputations in their respective markets. The MSA population of the first community is approximately 150,000 and the population of the county where the other community is located is approximately 26,000. The census at the time of sale was 53% and the combined communities were losing over $600,000 (EBITDA) annually.

Seller Representation

Despite some of the challenges in marketing properties with negative cash flow, Senior Living Investment Brokerage, Inc. was able to implement an effective marketing plan on behalf of the Seller and procure a qualified Buyer for the two assets and close in a timely manner. The Seller was a local hospital network seeking to divest of the assisted living communities in order to focus on their core business. The Buyer is a Private Equity group based in Southern California. They secured Northstar Senior Living to manage the properties on their behalf.

Contact Senior Living Investment Brokerage, Inc.

For additional information on this Assisted Living Community Sale or on how Senior Living Investment Brokerage, Inc. can assist you with the sale or purchase of an assisted living community, please contact Jason Punzel of Senior Living Investment Brokerage, Inc. at punzel@slibinc.com or 630/858-2501

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June 10, 2016
Grant Kief

Skilled Nursing Facility Sale

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Skilled Nursing Facility Sale in Alabama

    Skilled Nursing Facility sale recently facilitated in Alabama by Brad Clousing and Ryan Saul of Senior Living Investment Brokerage, Inc. The transaction consists of a 117 Bed Skilled Nursing Facility located in the city of Daphne, Alabama. Daphne is a thriving suburb located 11 miles northwest of Mobile, Alabama. The skilled nursing facility was constructed in stages with original construction in 1966 and additions in 1986, 2001 and 2004. The building consists of approximately 97,173 square feet over three stories.

    Medical Office Building

    The Skilled Nursing Facility sale also included a free standing medical office building. More than half of the medical office building was recently leased to a nationally recognized teneant. The newly executed lease will provide additional revenue going forward for a the new owner.

    Seller Representation

    The Seller purchased the property in 2011 with intentions to grow their skilled nursing portfolio through additional acquisitions in Alabama. However, skilled nursing facility sale opportunities and growth options did not materialize. At the time of sale, this was their only Alabama operations so the decision was made to sell in order to focus on future growth in other regions of the country where they had other skilled nursing operations. The Buyer is an Alabama based not-for-profit organization with strong local ties. They have plans to build on the strong Medicare census and to continue to expand upon their Alabama presence and reputation. They will also be able to reduce expenses and grow census through economies of scale. Senior Living Investment Brokerage, Inc. procured multiple qualified offers for this Skilled Nursing Facility sale and despite delays due to survey and tenant negotiations on the medical office building, the transaction was able to close within five months from commencement of marketing.

    Sales Overview

    The 117 bed skilled nursing facility sale was at 86% census at close of escrow. The cap rate was 4.6% at a 1.1X gross income multiple. Senior Living Investment Brokerage, Inc. was able to procure a sales price of close to $105,000 per bed for the Seller.

    Contact Info

    For additional information on this Skilled Nursing Facility Sale or to inquire how Senior Living Investment Brokerage, Inc. can assist you with your investment objectives, please contact Brad Clousing at clousing@slibinc.com or Ryan Saul at saul@slibinc.com 630/858-2501

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June 8, 2016
Grant Kief

Personal Care Community Sale by Brad Clousing

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Personal Care Community Sale

Personal Care Community Sale recently in Georgia by Brad Clousing of Senior Living Investment Brokerage, Inc. This transaction consists of a 41 unit Personal Care Community sale located in Cumming, Georgia. Despite a bankruptcy and a transition in ownership, the asset has performed well under the current interim management company. The asset had experienced volatile swings in performance over the previous twelve months. The census at the time of sale was 80%, the capitalization rate was 8.0% with and EGIM of 2.8X. The property was originally constructed in 1997 and consists of 22,945 square feet. The ultimate sale price was for over $80,000 per unit based upon 41 beds.

Change of Ownership

The bed capacity during the due diligence period was increased to 50 beds and the Buyer has plans for a major cosmetic renovation of the physical plant. The Seller was a California based investment firm that purchaased the asset as part of a non performing loan portfolio acquisition and subsequently foreclosed on the borrower. Senior Living was able to procure a Midwest based regional operator as the Buyer. With their experience with operating personal care homes as well as the increase in bed capacity to 50, the asset should produce future strong perormance and subsequent returns.

Contact

    For additional information on this Personal Care Community sale or to inquire about other opportunities within the seniors housing market, please contact Brad Clousing of Senior Living Investment Brokerage, Inc. at clousing@slibinc.com or 630/858-2501

June 7, 2016
Grant Kief

Assisted Living Sale in Georgia

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Assisted Living Sale in Georgia facilitated by Brad Clousing and Jeff Binder of Senior Living Investment Brokerage, Inc. The transaction consists of a 38 unit assisted living sale located in Acworth, Georgia. Acworth is a rapidly growing and strong demographic sub market near Atlanta. The asset was built in 2014 and boasts high end finishes constructed under the new Georgia Assisted Living Licensure standards. The property leased up quickly given the property’s positive reception within the local community and the well planned building with quality finishes combined for 95% census at the time of the assisted living sale.

Transaction Overview

Senior Living Investment Brokerage, Inc. was able to procure multiple qualified offers by implementing a strong marketing effort on behalf of the Seller. The 38 unit assisted living sale was built in 2014 and encompassed 38,646 square feet. The sales price, reflected by the quality construction and care, was $8,400,000 or over $221,000 per unit. The cap rate at the time of sale was 7.75% with a gross income multiple of 3.9X. The Seller was a partnership looking to redeploy assets to new development opportunities. The Buyer was a REIT with the asset to be operated under a long term lease agreement by their affiliate company.

Contact Info

For additional information on this Assisted Living sale or to inquire about the value of your seniors housing property, contact Brad Clousing at clousing@slibinc.com 630/858-2501 or Jeff Binder at binder@slibinc.com 314/961-0070.

June 6, 2016
Grant Kief

Senior Living Investment Brokerage Sale of ILF/MC Community

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Senior Living Investment Brokerage Sale of ILF/MC Community
Senior Living Investment Brokerage Sale of ILF/MC Community

Senior Living Investment Brokerage, Inc. recently facilitated the sale of an 88 unit Independent Living and Memory Care Facility in Texas. The community is comprised of 56 Independent Living units and 32 units/36 beds of Memory Care. The asset is approximately 73,000 square feet and is situated on approximately 24.03 acres of land. The property is located in a town 46 miles southwest of Dallas in Johnson County. The property was originally built in 1988 and renovated in 2003. The overall census at the time of sale was 99%. The cap rate on this sale was 8.9% and the EGIM was 3.17X.

Seller Representation

Matthew Alley of Senior Living Investment Brokerage, Inc. represented the Seller in the transaction. Matt was able to procure multiple qualified offers on the Seller’s behalf. The Seller of this seniors housing community is a local, independent owner operator. The Seller was operating under a forebearance agreement with their lender. The Buyer chosen is a hospital provider headquartered in the Dallas Fort Worth metroplex and owned by funds managed by an investment advisor. For additional information on this sale or to discuss how Matthew Alley of Senior Living Investment Brokerage, Inc. can assist with the sale of your Seniors Housing property, contact Matt at 630/858-2501 or alley@slibinc.com

June 6, 2016
Jason Punzel

Have Senior Housing prices peaked?

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Have Senior Housing prices peaked? by Jason Punzel

Recently, I spoke at the Washington Healthcare Association’s (WHCA) annual conference.  I have spoken there three times on the general state of the senior housing and skilled nursing sales market.   For the first time, I had to say that the data shows that pricing has peaked.   According to the National Investment Center (NIC), prices peaked in mid-2015.   As a firm, Senior Living Investment Brokerage, Inc. sells 90+ facilities each year and we have a very good pulse on the market.  Our data would support this conclusion.  On a facility that we would have received six offers a year ago, we now might receive four.   Prices seem to be down approximately 5%.  However, when analyzing pricing over the past six to eight years, today’s prices are still very good.

Conclusion:

The million-dollar question (quite literally!) is, where is pricing going in the future?  Prices are still very good and there are still many buyers with plenty of access to capital.  However, the Federal Reserve has come out recently talking about increasing rates again, which could push up the rate on the ten-year treasury, increasing borrowing costs.   If interest rates continue to rise, we could see a further decline in pricing.   However, we don’t see a dramatic decline in the next 6-12 months.   There are too many good buyers with plenty of capital to invest.   Occupancy is steady and new construction in most markets is not out of line.  Beyond 12 months, it is very difficult to predict and prices could change much more.  For any owner thinking about selling in the next several years, now might be a very good time.

For a market valuation on your senior living or skilled nursing facility, please contact Jason Punzel at punzel@slibinc.com or Joy Goebbert at goebbert@slibinc.com, 630-858-2501.

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June 3, 2016
Grant Kief

Skilled Nursing Facility Sale

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Skilled Nursing Facility Sale

Skilled Nursing Facility Sale recently by Matthew Alley of Senior Living Investment Brokerage, Inc. in Texas. The transaction consisted of a 110 bed skilled nursing facility comprised of 53 semi-private resident rooms and 4 private resident rooms. The asset is approximately 37,043 square feet and is situated on approximately 6.123 acres of land. The community is located approximately 30 miles from Odessa, Texas and is a smaller , more rural town. The skilled nursing facility was built in 1996 and the census at the time of sale was 67%.

Sale Overview

The Skilled Nursing Facility sale was $5,000,000 or $45,455 per unit. The cap rate for the sale was 14.9% and the gross income multiple was 1.21. The facility is enrolled in the UPL Program in Texas which is supplements the Medicaid rate. This program produces approximately $384,000 in revenue annually but is not included in the EBITDA calculation.

Senior Living Investment Brokerage, Inc. Seller Representation

The Seller is an owner operator from Central Texas. This was their only skilled nursing facility in West Texas. The Buyer is an operator headquartered in the Dallas Fort Worth area and they operate several skilled nursing communities in this region. The will improve the operations by utilizing their economies of scale.

Contact Matthew Alley

For additional information on this Skilled Nursing Facility Sale or to inquire as to how Senior Living Investment Brokerage, Inc can assist your company with acquisitions or dispositions of seniors housing assets, please contact Matthew Alley at alley@slibinc.com or 630/858-2501 or www.matthewdalley.com

June 2, 2016
Grant Kief

Skilled Nursing Acquisition $40,000,000

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Skilled Nursing Acquisition coordinated by Brad Clousing and Patrick Byrne of Senior Living Investment Brokerage, Inc. recently in Florida. This transaction consists of three skilled nursing communities located in the desirable Florida markets of Clewiston, Lakeland and St. Petersburg. Each community features quality physical plants with considerable upgrades to each asset. Palm Terrace of Clewiston, located in Clewiston, Florida, is licensed for 155 beds and was constructed in 1978 wih an addition built in 1995 with extensive renovations in 2005 and 2012. Palm Terrace of Lakeland, located in Lakeland, Florida, is licensed for 185 beds and was built in 1960 with renovations in 1980, 1990 and most recently in 2014. Palm Terrace of St. Petersburg, located in St. Petersburg, Florida, is licensed for 96 beds and was originally built in 1946 and 1964 with recent significant capital improvements including major upgrades to the dining and all common areas.

Midwest Buyer

For this Skilled Nursing acquisition, the real estate and operations were offered separately. The operations sale was the result of a Chapter 11 Bankruptcy unrelated to these particular buildings performance. The real estate Seller was an Illinois based private investment group. The Buyer elected to purchase both portions of the transaction during a formal bidding process and they were able to write offers on both separately. The Buyer, a partnership between an Illinois based owner operator and an Ohio based capital group, plan to utilize their extensive operating experience to improve margins, decrease bad debt write offs, improve the Medicare census and in turn, quickly improve the bottom line performance of the portfolio. Their local operations will be overseen by an experienced Florida operator that has prior knowledge of these particular properties. CapitalSource and Contemporary Healthcare Capital provided the financing for the assets.

Overview

The three skilled nursing acquisition consisted of a total of 436 beds. The census at the time of sale was 85%. The sales price was $40,000,000 at 1 10% cap rate. For additional information on this skilled nursing acquisition or to discuss how Senior Living Investment Brokerage can assist you with an acquisition or the disposition of a seniors housing property, please contact Brad Clousing at clousing@slibinc 630/858-2501 or Patrick Byrne at byrne@slibinc.com 314/961-0070.

June 1, 2016
Grant Kief

Skilled Nursing Facility Sale by Senior Living Investment Brokerage, Inc.

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Skilled Nursing Facility Sale conducted recently by Toby Siefert, Nick Cacciabando and Pat Byrne of Senior Living Investment Brokerage, Inc. in Connecticut. This was the third facility acquired as part of a four facility portfolio sale by a Canadian based skilled nursing facility owner. The Buyer and Seller had agreed to close escrow on each facility as the change of ownership for each property was approved by each state. With the closing of this skilled nursing facility sale, their is only one deal left to close which is in Vermont. The skilled nursing facility transactions in Massachusetts and New Jersey closed in 2015. This three story facility was built in 1972 and is 61,085 square feet. The facility is licensed for 162 beds and there are 2 private resident rooms, 28 semi private resident rooms and 26 four bed resident rooms. The census at the time of sale was 80% with a 16.2% quality mix. The most notable area of upside is increasing not only the census but the quality mix back to levels achieved in previous years when the skilled nursing facility demonstrated positive net operating income. At the time of the sale, the facility was experiencing a negative EBITDA of over ($1,000,000). The gross income multiple was .34X at the time of sale. Senior Living Investment Brokerage, Inc. was able to procure multiple qualified offers for the four skilled nursing facility portfolio which benefited the Seller because there was minimal interest in acquiring this particular skilled nursing facility as a single asset. The Buyer is a newly formed partnership of owners based in New York that will also operate the portfolio of skilled nursing facilities. For additional information on this Skilled Nursing Facility sale or to inquire how Senior Living Investment Brokerage, Inc. can assist you or your company with acquisitions or dispositions, please contact Toby Siefert siefert@slibinc.com, Nick Cacciabando nbando@slibinc.com or Pat Byrne byrne@slibinc.com.