assisted living community – Page 4

How to Sell Assisted Living Facilities Faster (part 1 of 2)

July 8, 2015/in assisted living, assisted living community, cap rate, due diligence, independent living, Jason Punzel, memory care, Oregon, senior housing, senior living, Senior Living Investment Brokerage, Washington/by ryanmsaul

Deciding when to sell your assisted living facility (Independent Living Community or skilled nursing facility) can be a daunting task and there are many factors to consider. However, once an owner decides to sell, typically they want to close as quick as possible. As a company, Senior Living Investment Brokerage, Inc has sold more senior living and skilled nursing facilities than any other brokerage company over the past seven years. Over the years, we have found a number of things an owner can do to help sell their senior housing community faster, below is a list of the top six (3 will be in this blog and 3 will be in a future blog post):

Price the community reasonably – Of all the things an owner can do to sell their senior housing community quickly, pricing it reasonably is the most important. Overpriced properties do not sell. They tend to sit on the market for months as buyers do a quick analysis and pass. Eventually, the seller drops their price to a reasonable market price. Unfortunately, many buyers will not go back and re-look at the property or they wonder if the sell will have additional price drops. Effectively the property becomes a stigmatized property. Financially qualified buyers tend to be smart and know the market well. They purchase properties that make financial sense and don’t get persuaded emotionally. Over pricing a property in hopes to “get lucky” and find a buyer that will pay the higher price rarely works and usually ends up wasting time and often times can result in a lower price than if the seller priced the property reasonably from the beginning.
Hire an experienced brokerage company – An experienced broker can help a seller price the property reasonably. It is important to make sure the brokerage company has a team of brokers that work together as a team to contact hundreds of potential buyers across the country quickly. Additionally, most owners want a confidential sale of the seniors housing community and many brokers do not do a good job of this.
Talk to an attorney and accountant ahead of time – Owners should talk to their accountant before the marketing process starts to make sure they understand the tax implications of the sale and decide if they want to consider a 1031 Exchange. Additionally, it is very important for a buyer to be working with an attorney who has specific experience in health care real estate sales. Most brokers can recommend a good attorney if an owner does not already know one. If an owner waits until offers start to come in to talk to their accountant and retain an attorney, it can slow down the process and make the seller look very inexperienced.

For more information on selling your seniors housing property, please contact Jason Punzel at 630-858-2501 x 233 or [email protected].

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How additional sources of funds are impacting the seniors housing market

June 12, 2015/in Alzheimer, Alzheimer's, assisted living, assisted living community, assisted living price, assisted living sale, buy, buy assisted living, buy nursing home, cap rate, Capitalization Rate, cash flow, CCRC, Dementia, financing, hud, independent living, independent living facility, interest rate, Lesley Arlasky, long term care, market, Matthew Alley, memory care, nursing home, nursing home price, prepare to sell assisted living, prepare to sell nursing home, private equity, proposal, sell, sell assisted living, sell CCRC, sell long term care, sell memory care, sell nursing home, sell portfolio, sell retirement community, sell seniors housing, sell skilled nursing, sell to REIT, senior housing, senior housing brokerage, Senior Housing community, senior housing sales, senior living, Senior Living Investment Brokerage, seniors housing, seniors housing brokerage, Skilled Nursing Facility, SLIB, Texas, valuation, what is my assisting living worth, what is my nursing home worth/by ryanmsaul

Over the past couple of years, we have seen capitalization rates (defined as Net Operating Income divided by Purchase Price) drop steadily to historically low levels, which in turn has led to purchase prices being driven upwards.

Now is the time to take advantage of this market and either exit the business through a sale entirely or divest of a few properties from your portfolio that do not fit with your current strategy.

Why is the market so strong right now? More so than any other factor, the market has been impacted by the increased availability of capital (both debt and equity) and the low cost nature of said capital. Interest rates are still at historically low levels, and while rates may creep up a bit, most analysts expect a measured increase.

During the Great Recession, transactions were mainly financed by three different methods: (1) all cash; (2) HUD financing; or (3) mostly public REIT financing. Community banks were only lending to their best clients on the most conservative of terms, and there were not a great deal of smaller, private REITs or private equity firms willing to support the acquisition of seniors housing facilities.

Over the past couple of years, community banks have become more aggressive as they are sitting on a large reserve of cash that they need to deploy and there has been a growth in the private REIT space. According to investment banking firm , Robert A. Stanger & Co., and reported by Seniors Housing Business, a handful of non-traded REITs devoted to seniors housing have amassed $6.4 billion in equity over the past few years. The availability of these capital sources has had a huge impact on the seniors housing acquisition market in the form of increased pricing.

The most recent example of this was a $30M nursing home portfolio that Senior Living completed in Texas. It was purchased by an independent, regional owner-operator and financed by a community bank out of Louisiana. Until recently, that size of transaction would have been almost certainly REIT financed or purchased by a large, national owner-operator.

If you have any questions on the topic of this post or would like a confidential valuation of part or all of your seniors housing portfolio, please contact Matthew Alley at 630-858-2501 ext. 225 or [email protected].

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Seniors Housing – Small buildings vs. Large buildings

June 11, 2015/in assisted living, assisted living community, assisted living sale, cap rate, Capitalization Rate, independent living facility, Jason Punzel, Senior Living Investment Brokerage, seniors housing/by ryanmsaul

As a company, Senior Living Investment Brokerage Inc, sells all types of senior living and long term care communities. One type of senior living community type we are seeing more of is the “pod” style of smaller buildings grouped together on a single parcel of land. Thus, instead of having one 80 unit facility, there might be five, sixteen unit facilities with one of the facilities being a bit larger where more of the community activities take place. There are some advantages and disadvantages to them. We find that often times residents like the feel of the smaller facilities because they feel more like a home and it is easy for them to get to know the other residents. From a marketing/occupancy standpoint, these types of facilities also seem to be attractive and often times enjoy very high occupancy.

The biggest disadvantage is staffing and efficiency. Depending on the state and acuity level, often times these smaller facilities require a staff person to be in each facility 24 hours a day. For only 12-16 residents, this can be very inefficient and costly. Also, while each facility usually has its own kitchen, it can be very inefficient to have a cook in each facility or to cook in one facility and have to transport to the other facilities. We often find that this type of community set up operates at an operating margin around 25% while a similar age/acuity level facility that has all of the residents under one roof might operate at a 32-35% margin. Thus, it limits that maximum amount of cash flow a community can create, decreasing its value. However, smaller facilities can be more attractive to residents and thus have great occupancy, some of the cash flow deficit may be eliminated. While we see more buyers prefer the larger facility communities, both styles can be very effective in delivering great resident care and producing profitable returns for the owner.

To have Senior Living Investment Brokerage, Inc. help you analyze the value of your senior living community, contact Jason Punzel at 630-858-2501 x 233 or [email protected].

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Brad Clousing and Ryan Saul Sell Georgia ALF/MC Community

March 16, 2015/in assisted living community, assisted living price, assisted living sale, Brad Clousing, development, Georgia, memory care, Ryan Saul, Senior Living Brokerage, Senior Living Investment Brokerage/by ryanmsaul

Ryan Saul and Brad Clousing recently sold a Georgia Assisted Living and Memory Care community. The 49 unit, purpose built facility is located north of Atlanta. Built in 2014, the 43,500 square foot building is licensed as an assisted living community. It features 39 ALF units and 10 memory care units. It is 100% occupied with a waiting list. The Seller was a local partnership and this was their first asset. The Buyer is a national owner/operator and this property will complement their other assets in the region. The transaction closed at $14,550,000 ($296,939/unit). For additional information contact Brad at [email protected] or Ryan at [email protected] 630/858-2501

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Ryan M Saul