At what age is a Senior Living Facility Obsolete?

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At a certain age, virtually any type property will become obsolete.  Thus, at what age is it for Senior Living and Skilled Nursing Facilities?   I believe it is more a matter of functionality than age.

In today’s competitive world, Assisted Living Communities that are older converted Skilled Nursing Facilities tend to have challenges in keeping stabilized occupancy.   Often times they have shared bathrooms, small one-room units and limited common areas.  With lower acuity residents, private bathrooms are a must when marketing a facility.   Larger units with multiple rooms that can function as an Independent or Assisted Living unit have great appeal to allow residents to age in a place as additional care becomes necessary.

Skilled Nursing Facilities that have 3 and 4 bed wards (rooms) are very difficult to fill and often times the total bed count needs to be reduced to allow for mostly private or 2 bed rooms.   Even if the facility is accepting mostly Medicaid residents, two residents per room tends to be the maximum that is acceptable.

Other facility challenges include long narrow hallways, low ceilings, lack of elevators, and poor lighting.  Depending on the structure, these challenges can be very difficult to rectify.   While it tends to be the older Skilled Nursing Facilities that were built in the 1960s and 1970s, some Assisted Living Communities built in the 1980s and 1990s can also have a functionally obsolete design and layout.

If lack of private bathrooms and small rooms are the challenge, sometimes a solution is to focus on higher acuity Assisted Living and/or Memory Care where residents have higher acuity needs and can use a bathroom or kitchen on their own.  Unfortunately, there are some communities that have too many design and layout issues to overcome and possibly the best solution is to build a new facility on the existing ground.

To discuss the age, functionality and sale ability of your Senior Living or Skilled Nursing Facility please contact Jason Punzel at 630-858-2501 x 233 or [email protected]  or Joy Goebbert at 630-858-2501 x 230 or [email protected].

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Non-Core Properties Present Best Buying Opportunities Today

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I recently participated on a panel that discussed where the most opportunities are today. Non-Core Properties Present Best Buying Opportunities Today.

Ryan Saul Sell Assisted Living

Here is a link to read more about the latest Seniors Housing News and what is driving deal velocity.  Senors Housing Midwest Conference Article

To discuss your buying and selling goals, please contact Ryan Saul.

The post Non-Core Properties Present Best Buying Opportunities Today appeared first on Senior Living Investment Brokerage.

Independent Seniors Housing Sales

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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 [email protected] or http://www.matthewdalley.com/

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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 [email protected] or 630/858-2501

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