Senior Living Investment Brokerage Sale of ILF/MC Community

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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 [email protected]

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Have Senior Housing prices peaked?

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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.

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 [email protected] or Joy Goebbert at [email protected], 630-858-2501.

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Skilled Nursing Facility Sale

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Skilled Nursing Facility Sale in Texas

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%. 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. 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 Senior Living Investment Brokerage, Inc.

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 [email protected] or 630/858-2501

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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 [email protected] 314/961-0070.

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