Personal Care Home Sale

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Personal Care Home Sale

Bradley Clousing recently facilitated a Personal Care Home sale in Georgia. The 60 unit building is comprised of 47 Personal Care Home units and 13 Memory Care units. The 69,749 square foot is in a rural Georgia community. It was originally built in 1965 as a school and was converted and renovated to a Personal Care Home in 2007. The Seller had foreclosed on the asset after purchasing the note as part of a portfolio purchase from a local bank. The property was sold at auction to the highest bidder.

Transaction Overview

At the time of the Personal Care Home Sale, the census was 78% and the operations were negative cash flow. The Gross Income Multiple was 0.7X.

Contact

For additional information on this Personal Care Home Sale or to inquire how SLIB can assist you with a purchase or sale of seniors housing assets, please contact Bradley Clousing of Senior Living Investment Brokerage, Inc. at [email protected] or 630/858-2501

The post Personal Care Home Sale appeared first on Senior Living Investment Brokerage.

Residential Care Facility Sale

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Residential Care Facility Sale by Patrick Byrne

Patrick Byrne of Senior Living Investment Brokerage, Inc. recently facilitated a Residential Care Facility sale in Missouri. Cedars of Liberty is a converted school originally constructed in 1962, licensed for RCF-II. This licensure is effectively low-acuity assisted living, often carried by older buildings which do not meet current ALF standards. Many RCFs also service more of a mental health population, and that’s true of Cedars of Liberty. Years ago we toured this campus when it was a struggling, geriatric focused building with some mental health and we encouraged them to fully embrace that mental health model. Despite being in a major metropolitan market the facility was quite rural and with amenities like a basketball court & many common areas, the facility was uniquely equipped to care for a younger population. Given the low margin in this business, many smaller mental health facilities in the state were closing, leading to a steady increase in Cedars’ population.

While the facility is very large, 129,658 square feet with a capacity of 206 beds, the functional capacity of the license is only 130 beds. As such, the census at the time of marketing was above 90%. The buyer plans to expand the capacity and enhance the physical plant; whereas the seller lacked the capital to justify further investment. In the prior fiscal period the facility barely made $200k in EBITDA so the improvement was recent and combined with the aging physical plant and unique focus, attributed to a higher capitalization rate.

The Seller was a local family who had inherited the operations from their parents. The Buyer is a growing skilled operator and one of the largest mental health operators in the Midwest. The census at the time of sale was 57% and the Residential Care Facility sale was at a 13.94% capitalization rate and a 1.26X GIM.

Contact SLIB

Patrick Byrne of Senior Living Investment Brokerage, Inc. handled this Residential Care Facility sale. For additional information on this transaction or on how Pat can assist you with a purchase or sale, please contact Patrick Byrne at [email protected] or 314/961-0070

The post Residential Care Facility Sale appeared first on Senior Living Investment Brokerage.

Ryan Saul Featured Speaker

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2nd Annual Interface Seniors Housing Midwest Conference

Ryan Saul and Brad Clousing will be attending The 2nd Annual Interface Seniors Housing Midwest Conference June 2oth & 21st. Ryan will be a featured speaker on the panel: Investment Market Update: Who’s Buying, Who’s Selling & What’s Driving Deal Velocity?

http://www.cvent.com/events/2016-interface-seniors-housing-midwest/event-summary-48e392e9cac94ac1a3afaf5a576a358a.aspx

Contact

For additional information, contact Ryan Saul at [email protected] or Brad Clousing at [email protected] 630/858-2501

The post Ryan Saul Featured Speaker appeared first on Senior Living Investment Brokerage.

Pro-Forma vs. Actual Senior Housing Financial Statements

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Pro-Forma vs. Actual Senior Housing Financial Statements – By Jason Punzel

As brokers, Senior Living Investment Brokerage, Inc. reviews senior housing financial statements for sellers on a regular basis.  We typically look at the trailing 12 months of financials to help determine the value of the senior living community, along with the price per unit of sales comparables.

When preparing an Offering Memorandum to market a property, typically, we rely on the trailing actual financials versus using a pro-forma financial statement.   It is very easy to make assumptions based upon the market (i.e. 92% occupancy, 40% margin, 3% rent growth, etc.) and apply it to a given property.   However, if it was really that easy, the current owner would have already made the changes needed to achieve the pro-forma!  We have found it more valuable to present the actual financials, while highlighting upside opportunities for a potential buyer.   The potential buyer is going to develop their own 10-year cash flow analysis anyway, based upon their own assumptions and plans for the given facility.

Conclusion:

There are a few exceptions.  When there is a new facility, or large expansion, and the facility is in the lease-up process, it makes sense to develop pro-forma senior housing financial statements.   In this case, the trailing financials do not represent the near term future as the facility is moving towards a stabilization point.   This is a much different situation than a facility that has a track record of performing at a given level and without major changes, will probably continue to perform at a similar level.

Contact Information:

For more information about analyzing the financials of your senior living community, contact Jason Punzel at 630-858-2501 or [email protected].

Front View

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