Preparing to Sell or Buy in 2011

A number of clients take time off this time of year for some much needed rest and relaxation. That is probably a good idea. I believe 2011 is going to be another record year for transaction volume. Debt and equity are more available with each day that passes.

Things Sellers can do this time of year to get ready for a possible sale:

1) Organize your records. Today, everyone should be moving to go paper free. Scan financial statements, rent rolls, old appraisal, tax records, payroll reports, staffing schedules, etc. If you have this information electronic, it makes life so much easier.
2) Spruce things up. Make a 2011 resolution to fix those annoying repairs you have been putting off. The first thing people see when they come to your facility is the parking lot. A wise owl once told me you can tell how someone takes care of people and the rest of the building structure by looking at the condition of their parking lot.
3) Professionals. Have your accountant and attorney on speed dial. Take those professionals out to lunch. They can be vital when you need information fast.
4) Broker. Call Ryan Saul at Senior Living Investment Brokerage, Inc. for a confidential proposal to determine your market value.

Buyers should update financial and bio information so they are available upon request. Update your goals and business plan so you are ready to tackle 2011.

Let us help you achieve your investment objectives in 2011. Email me at Ryan Saul or call 630-858-2501 for more information

Buyers - Think before you write

Buyers and investors need to think about their reputation before they write an offer. More importantly, before you sign an agreement with a Seller to purchase, be certain you are going to perform. Everyone understands that material items related to physical plant or the overall market can come up during due diligence. However, Buyers putting forth offers in which they do not intent to perform will not only hurt the deal at hand, but will jeopardize the likelihood that they will be selected as a buyer in the future.

Reputation is key in the M&A arena. If your goal is to acquire facilities, stand behind your offer and deliver on promises. Buyers with a reputation for not delivering on the terms of an agreed upon offer will quickly gain that reputation and might just do their last deal. Work with Sellers and brokers to be sure everyone is satisfied with the outcome of a transaction. If you are a person of your word and a handshake is as valid as binding agreement, you will successfully acquire properties for years to come.

If you are thinking about selling and want to secure a buyer with a strong reputation, please contact Ryan Saul at 630-858-2501 or Email by clicking the link on my name.

Matthew Alley Closes Another Texas Transaction

Matthew Alley has sold a 118 Bed Skilled Nursing Facility in Texas. The single story, 44,000 square foot facility was built in 2004. The purchase price was $7,250,000 ($61,440/bed) which was a 13.8% capitalization rate. The census at the time of sale was 75%. The Buyer is a regional owner/operator with several facilities in Texas. Conventional financing for the acquisition was provided by a regional bank. For additional information please contact Matt at 630/858-2501.

Ryan Saul Sells Another Indiana Facility

Ryan Saul has sold another seniors housing facility in Indiana. The 41 unit Assisted Living Facility is located in Batesville, Indiana. Built in 2003, the 31,551 square foot facility sold for $2,850,000. Over the past ten years, Ryan has sold more seniors housing facilities in Indiana than any other broker or brokerage team. For additional information on this transaction or any other Indiana transaction or facility, please contact Ryan at 630/858-2501 or saul@seniorlivingbrokerage.com

SNF / ALF...You Decide

Do you own a portfolio that is mainly skilled nursing with an outlier assisted living property or two? Does your portfolio of assisted living include a one-off skilled nursing facility?

Many of my clients have been divesting non-core assets. I repeatedly hear, "stick with what you know." If you have a property that does not fit within your core business, now is an ideal time to explore selling. Their is great demand for both Assisted Living and Skilled Nursing facilities.

It is a natural sell to the market when representing non-core assets to highlight the fact that we are selling an assisted living facility for a skilled nursing owner/operator. These opportunities tend to have the most upside potential yielding top-of-the-market pricing.

Please contact me at Ryan Saul to prepare a confidential proposal for your non-core assets.

Jeff Binder and Nick Cacciabando Facilitate Kansas ALF Sale

Nick Cacciabando and Jeff Binder have sold a 45 unit Assisted Living Facility in Kansas for $2,500,000 or $55,555/unit. Constructed in 1970 with a 17 unit addition in 2004, the facility sold at a 10.1% capitalization rate. The one story building is 25,000 square feet on almost 2.5 acres. The facility is in good condition and was 100% occuppied at the time of sale. for additional information, please contact Jeff or Nick in the St. Louis office at 314/961-0070.

Senior Living Announces Mississippi Senior Housing Sale

Ross Sanders, Nick Cacciabando and Jeff Binder have sold a Seniors Housing Community in Brandon, Mississippi. The two story building consists of 75 Assisted Living units and 25 Memory Care units. Constructed in 1999, the facility is comprised of 85,000 square feet and sits on 5.4 acres. The occupancy at the time of sale was 98% and sold for $10,600,000 ($106,000/unit) at a 9% capitalization rate. For additional information please call the St. Louis office at 314/961-0070.

Ryan Saul Sells Two Illinois Skilled Nursing Facilities

Ryan Saul has sold two skilled nursing facilities in the Chicago suburbs for a local owner/operator. The first facility, located in the western suburbs, is 180 beds and was built in 1976. The second facility is in the south suburbs and was built in 1964/1999. It is 80 beds. The total purchase price exceeded $65,000/bed. Financing was provided by Private Bank. For additional information, please contact Ryan Saul.

2013 - 3.8% Tax when you sell your facility

3.8% No reason tax. Thanks a bunch Health Care reform!

The new health care reform includes a number of disturbing items. If you are thinking of selling your long-term care or seniors housing facility, I would seriously look into doing so between now and the end of 2012. As it stands today, in 2013, there will be an additional 3.8% tax on gains from the sale of investment property. Consult your tax advisor, but if you are planning on selling in the near future, now would be an ideal time to determine market value before the new tax goes into effect.

What will the new tax mean for capitalization rates, return on equity and overall value. I don't want to wait to find out. With lending back in the market, limited supply and stabilized value, please contact me at Ryan Saul for a confidential analysis.

If you are in the market to purchase, give me a call at 630-858-2501 to see what we currently have available to purchase.

PS - Let's make a change....get out and vote on November 2!

Jeff Binder and Brad Clousing Facilitate Sale of Senior Housing Community

Brad Clousing and Jeff Binder have sold a Senior Housing Community in Chattanooga, Tennessee. The five story building consists of 42 Independent Living units, 59 Assisted Living units and 15 Memory Care units. Constructed in 1985 and renovated in 2004, the facility is 109,463 squre feet on 12.36 acres. At the time of the sale, the facility's census was 97%. The Seller is a national owner/operator of seniors housing and the Buyer is a Florida based real estate investmant company. For additional information,please contact Brad or Jeff.

World Alzheimer's Day 2010 Today - Sept 21

Senior Living Investment Brokerage, Inc. would like to recognize World Alzheimer's Day today, September 21. I lost a good family friend to Alzheimer's two weeks ago and would like to increase awareness.

www.alz.org

Economy Improving...Recession Over!

Recent news that the recession officially ended in June/July 2009 brings welcomed positive news to the economy. The Seniors Housing industry has done well despite the recession. Slow and steady improvement in the overall economy can only translate positively to the Seniors Housing industry. A few transactions north of $1B is a clear indicator that the M&A market is picking up. Look for more assisted living and nursing homes to be sold moving forward. Bring on the lenders!

We are excited for the 20th annual NIC Conference this week and will report back on developments and the outlook for the rest of 2010 and 2011.

Please contact Ryan Saul to discuss the market, selling your facility or properties available to purchase.

Michael Brundage Completes Assisted Living Sale in Michigan

Michael Brundage has sold an assisted living facility in Michigan. The 21 unit facility has been run very well from a resident care standpoint, enjoys a strong reputation within the local community and has historically been 100% occupied. The Seller, a local hospital, had struggled to control expenses and had been operating the facility in the red. The Buyer plans on increasing resident rates, control expenses and expand the facility. Senior Living has sold more Seniors Housing in Michigan than any other firm. For additional information, please contact Michael Brundage at 630/858-2501.

Brad Clousing Closes $15,100,000 Florida Portfolio

Brad Clousing has completed a sale-leaseback of three assisted living facilities in Central Florida for $15,100,000. The transaction comprised of a 43 unit facility built in 2005, a 42 unit facility built in 1997 and a 42 unit facility built in 1988-expanded and renovated in 2005. This transaction allowed the Seller to retire the existing debt, free up liquidity and maintain operation of the facilities. The Seller operates other facilities in the area and has several properties under development. For additional information, contact Brad Clousing at 630/858-2501.

Ryan Saul Sells Facility for Third Time

Magnolia Health Systems has purchased a 77-unit assisted living facility for $8.0 million that Sunwest had purchased in 2007 for $7.35 million. The property was developed in 2001 for $5.5 million but was only open for a few months before closing its doors for three years. Senior Living Investment Brokerage sold the vacant building in 2004 for $3.8 million. The Buyer then completed extensive renovations before selling it to Sunwest at a much higher price via Senior Living Investment Brokerage. Ryan Saul of SLIB has sold it once again. At the time of the current sale, occupancy was just under 80%. Current rents range from $2,000 to $3,195 per month with an average of $2,400. The new owner should be able to raise rates and occupancy. . Magnolia operates 26 facilities in Indiana, mostly skilled nursing plus a handful of assisted living facilities.

Ryan Saul Brokers Sale of Las Vegas Memory Care Community

Ryan Saul handled the sale of a Class "A" Memory Care Facility in Las Vegas. The 46 unit (52 beds) facility sold for $2,850,000. Overall occupancy was 90% and the financial performance was close to break even due to 37% Medicaid residents paying below market rent of $2,400/month. The 31,727 square foot building was built in 1999. For additional information please contact Ryan Saul at 630/858-2501.

Patrick Byrne and Jeff Binder Sell Iowa CCRC

Jeff Binder and Patrick Byrne have sold a Continuing Care Retirement Community in Iowa for $10,000,000. The facility consists of 84 Skilled Nursing beds, 20 Alzheimer units, 34 Assisted Living units and 19 Independent Living cottages. Constructed in 1999, the community has approximately 72,276 square feet on 100 acres. For additional information, please contact Pat or Jeff at 314/961-0700.

Senior Living Announces Iowa SNF Sale

Jeff Binder, Ryan Saul and Ross Sanders sold a 102 Bed Skilled Nursing Facility in one of the largest cities in Iowa. Constructed in 1976, the facility is in good condition and is comprised of approximately 29,000 square feet on 2.83 acres. Census was 66% at the time of sale.
The Seller is a for-profit group of investors and they were the original owners of the facility. This was their only long-term care facility.
The West Coast based Buyer owns/operates a number of skilled nursing facilities in both the Midwest and West Coast. The new owners seek to significantly enhance the Medicare census by offering a number of new therapy programs at the facility. The Buyer looks forward to taking advantage of the new Quality Assurance Program/Provider Tax which the State of Iowa implemented in April 2010. Please contact Ross, Ryan or Jeff for additional information.

Looking to buy?

The question I was repeatedly asked in 2009 was, where is all the inventory? It seemed with constricted lending and the economic downturn, potential Sellers thought buyers couldn't obtain financing. In addition, Sellers didn't think they could achieve their desired value with a sale. We had a record year in 2009, and a number of our potential Sellers took us up on our offer to complete a confidential proposal to determine market value in 2010. What they found is we are getting deals done at the value we propose. This caused a flurry of new inventory which is a good sign. The sales process and due diligence is taking longer, but deals are getting done. Sellers just need to realize that buyers and lenders can't pay for future upside and need to determine pricing on a trailing 12.

If you are in the market looking for nursing homes, assisted living or independent living facilities to buy, please contact me to be sure you are seeing our latest inventory. You can click on this Email link for more information. Ryan Saul.

Ross Sanders Closes Independent Living Facility Transaction in Iowa

Ross Sanders of Senior Living's St. Louis office has sold a 16 unit Independent Living Facility in Iowa. The facility is located in one of the largest cities in Southeast Iowa and was constructed in 2000. The Seller was a Texas based investment group that purchased the asset out of foreclosure in 2006. The Buyer is a local seniors housing owner/operator who hopes to increase census and cut operating costs. The new owner will also have the opportunity to almost double the size of the existing facility on the vacant 3 acres included in the purchase. For additional information please contact Ross at 314/961-0070.

Cacciabando and Binder Sell Four Nebraska Skilled Nursing Facilities

Jeff Binder and Nick Cacciabando represented a national provider in the sale of four underperforming skilled nursing facilities in Nebraska. Originally built in the 1970's, this 214 bed portfolio had been upgraded since the mid-1990's and are in above average condition. This package was a strategic disposition as the facilities did not fit into the long-term investment vision of the seller.

The Buyer is a regional long-term care provider with a strong presence in the Midwest. Their core business has centered on returning distressed, smaller, rural SNF facilities to profitability. With a successful track record of turning around similar underperforming/distressed facilities, this package will fit in well with their portfolio.

For additional information, please contact Nick or Jeff at 314/961-0070.

Brad Clousing Sells Seniors Housing Conversion in Florida

Brad Clousing sold a luxury boutique hotel in Melbourne, Florida, for a Chicago based lender. The hotel was originally built in 1973 and had significant hurricane damage in 2006, renovated and reopened in 2008.
Given the large room sizes, attached restaurant (currently vacant) with commercial grade kitchen and excellent location, the property was very appealing as an assisted living conversion. The building overlooks the intercoastal waterway with unobstructed water views less than one mile from Holmes Medical Center.
The Buyers have projected approximately $1,75 million will be spent to complete the conversion to assisted living. The purchase price was $4.5 million for what will become a 129 unit ALF. For additional information contact Brad Clousing at 630/858-2501.

Lending,...Where are you?

Deals are getting done and there IS lending in the market. However, we are finding that relationship banks are the main sources providing financing for our acquisitions. You must have a long-term, existing relationship with a proven track record in order to obtain financing in today's market.

If you have access to those types of lending relationships, make sure you take care of them. Be proactive in keeping in touch with your lender and remind them how well you are doing.

If you are looking for that next lending relationship, be on the look out for opportunities. Maybe a lender needs some help/advice with a troubled long-term care or Seniors Housing asset? Network with other successful operators and try to get referred to who they use for financing.

As the economy improves, our hope is that lending will continue to improve. More liquidity will be good for everyone and will improve the overall market.

Please Email Ryan Saul by clicking on the following link to learn more about the current market. Email

Pappas and Clousing Sell Washington Independent Living Facility

George Pappas and Bradley Clousing sold a 40 unit Independent Living Facility in Washington. Built in 1983, all of the units are one bedroom and are subsidized through HUD with a HAP contract that guaranteed all the rents. The facility is age-restricted to reseidents 55 and older. The Seller was the original developer and is exiting the seniors housing market. The Buyer, a regional non-profit, plans on renovating the building and utilized state and public funding to finance the acquisition and renovation. The facility sold for a 9.25% capitalization rate. For additional information, contact George or Brad at 630/858-2501.

Upside? What Upside?

The number of potential Sellers exploring the option of divesting has doubled in the last year. So why the lack of quality inventory on the market? The answer, no upside value.

Sellers realize that the lenders and buyers are back in the market aggressively looking for acquisitions. However, the market is not paying for upside. Lenders, appraisers, and buyers are only paying for what your property is worth today. In order for Sellers to maximize their value, my advice is to increase the census, improve cost centers and/or build that valuable program. A buyer won't pay you for the work they will have to do to see that value. If you want the value, improve the cash flow and you will be rewarded accordingly.

Please contact at Ryan Saul for a confidential proposal to determine the market value of your property.

Ryan Saul and Jeff Binder Sell Indiana Independent Living Facility

Jeff Binder and Ryan Saul have announced the sale of a 54 unit Independent Living Facility in Indiana. Originally developed in 2000 by a local hospital, the facility has been operated by a local nonprofit board since 2007. The management team was able to improve operations over the past 3 years and hired Senior Living Investment Brokerage, Inc. to sell the facility. At closing, the census was 100% with a waiting list. The Buyers plan on applying to license the facility for Assisted Living and also expand the facility to provide Skilled Nursing.
For additional information, please contact Ryan Saul or Jeff Binder.

Matthew Alley Closes on Texas Nursing Home

Matt Alley sold a 70 bed Skilled Nursing Facility June 2, 2010. The facility was owned and operated by a local family. All 70 beds are dually certified for Medicaid and Medicare residents. The facility had negative cash flow and the new owner expects to take advantage of the positive revenue base through cutting expenses and increasing census. The Buyer is a promineent real estate owner from California that owns several facilities in Texas. The new owner intends to lease the facility to a regional operator out of Houston.
For additional information, please contact Matt at 630/858-2501 or alley@seniorlivingbrokerage.com

Sell or refinance...that is the question

Many of our clients are experiencing loans that are maturing. Rather than focus only on refinancing, doesn't it make sense to explore selling? Even though lenders are getting back in the market and making loans, they are requiring significant equity. Our clients are often faced with having to come up with additional cash/equity in order to refinance. Gone are the days of pulling out cash/equity when you refinance in the current environment.

Thankfully Senior Living is off to a great start in 2010. Based on the number of transactions we are closing, we see acquisition lending improving across the board. Buyers that have been on the sidelines for the last two years are looking for opportunities to grow their portfolio.

So, please give me the opportunity to put together a confidential market analysis of what your property is worth before you automatically refinance your facility. Please Email me at saul@seniorlivingbrokerage.com for more information.

What Are You Seeing in the Market?

In the Senior Housing and Long-Term Care industry there has been a common belief that the slowing of the overall economy and restricted availability of capital that began in mid-2007 would cause a massive influx of properties coming onto the market as a result. So, where are they?

The common question right now is, “Where is all the deal flow?” Most buyers and operators felt there would be a large amount of sellers forced into the marketplace due to the inability to refinance properties, over leveraged properties, or facilities struggling with operations/occupancy.

The Numbers:

Let’s take a look at the number of transactions as well as related dollar volume for the past couple of years.

I think it makes sense to mention that for both 2006 and 2007, the five largest deals were all over $1B and accounted for approximately 60% of the dollar volume in the industry. Removing all transactions over $1B from the statistics, the remaining statistics dollar volume statistics look more like this:

Since 2006, the number of transactions is down (by 38.3%). However, from 2008 to 2009, the number of transactions is only down by (6.25%). The data also indicates that during the past three years, the number of “large” deals is has dwindled with the deteriorating credit markets. Take heed, when compared to other assets classes, we seem to be fairing relatively well despite the current credit markets.

As you can see in the following table, the year over year commercial real estate transaction volume from 2008 to 2009 was down, from 56% to 65%, depending on the property type.

The good news is that the dollar amount produced in 2009 happens to be approximately what the dollar volume was in 2003, the last time the acquisition market was struggling to get out of a recession. One noteworthy difference is that the industry fundamentals are much better today than they were in the 2002/2003 period. So what does this mean if you are an owner with a property you are contemplating selling in today’s market? After all, what is behind us is behind us.

Here is what we can tell you. Although the credit markets are more challenging than they were two years ago, we are completing transactions at aggressive prices. Our biggest hurdle is keeping an inventory of facilities to sell. While cap rates have ticked up somewhat for assisted and independent living properties, they are still at historically aggressive levels. The demand for nursing homes and assisted & independent living properties is through the roof due to the lack of supply in the market. Each time we list a property we continue to be amazed at the level of interest we are able to generate, simply because there are so few properties available. This, combined with a pent up demand from investors eager to grow their portfolios creates strong demand and pricing.

The result is multiple, qualified offers for each building we market. 2009 was Senior Living Investment Brokerage’s best year as far as number of properties sold and 2010 is shaping up to compete with or surpass our 2009 totals.

I would be happy to prepare a confidential analysis for any properties you may consider divesting. Contact Michael Brundage at brundage@seniorlivingbrokerage.com for more information.

Jeff Baxter Joins Senior Living Investment Brokerage

Jeff Baxter has joined Senior Living Investment Brokerage as a Senior Associate. Jeff will focus on seniors housing sales in the Southwest. Prior to joining Senior Living, Jeff began his career working in Private Client Services for UBS Financial Services Inc. Since 2005 he has served his alma mater, Wheaton College (IL) as Director of Principal Gifts, structuring numerous capital and endowment gifts of $1 million+ as part of their most recent $260 million campaign. Jeff earned his BS in Business and Economics from Wheaton College in Wheaton, IL. Jeff can be reached at 630/858-2501 or baxter@seniorlivingbrokerage.com

Matthew Alley and Jeff Binder Announce Washington Sale

On April 30th, 2010, Jeff Binder and Matthew Alley brokered a 115 unit Assisted Living, Independent Living and Memory Care facility for $16,250,000. The property was sold out of receivership through the Washington State Bankruptcy Court. The facility was purchased by a large national owner/operator out of the Pacific Northwest. This transaction was a court appointed sale and Senior Living Investment Brokerage contacted over 60 potential Buyers and multiple offers were received. For additional information, please contact Jeff or Matt.

Best time of year to sell?

I have been asked numerous times over the last few months if there is a better time of year to put a property on the market. Brokers of residential real estate will highlight why Spring is a good time to go to market. However, there is no better time of year to go to market with a long-term care or Seniors Housing property. This property type is stable, provides a level care and driven by investment supply/demand. A Seller should look at a calendar and expect slow response times around holidays and peak vacation times. Don't wait for a certain time of year. Contact me to find out what your property is worth and develop the best marketing strategy for your facility.

Jeff Binder and Patrick Byrne Close Skilled Nursing Facility Transaction in Illinois

Patrick Byrne and Jeff Binder have announced the sale of a 99 bed Skilled Nursing Facility in Southern Illinois. The facility, constructed in 1971, is located in a rural town with a population of approximately 1,000 but draws residents from the entire county. Marketing of the facility was enhanced by assumable HUD debt. The Transfer of Physical Assets took nearly eight months to complete. During the process the facility's performance improved considerably. The Seller is a national owner/operator that acquired the facility in 2006. The Buyer is a regional operator based near the asset that will be able to create some economies of scale by absorbing this property into their current operations.

Deals picking up

First quarter brought concern about little inventory on the market. We are selling all skilled nursing and assisted living we represent. Senior Living Investment Brokerage, Inc. is off to a great start and set to have a record year in 2010. Fortunately, proposals and new inventory has picked up dramatically over the last month. Lending and equity are showing strong signs of deploying capital in Seniors Housing. I would encourage you to think about selling any undesirable assets or capitalize on divesting any performing properties in the current environment.

I would be happy to put together a confidential analysis for any properties you may consider divesting. Contact Ryan Saul at saul@seniorlivingbrokerage.com for more information.

Patrick Byrne and Ryan Saul Sell Assisted Living Facility in Southern Illinois

Ryan Saul and Patrick Byrne have sold a 29 unit Assisted Living Facility in Metro East St. Louis for almost $100,000 per unit. The Seller had purchased the facilty to take advantage of an expiring 1031 exchange. He had no prior seniors housing experience and the facility struggled as a result. The Buyer is an experienced senior housing owner/operator and is confidentthey will be able to create efficiency within the operations. The facility, built in 1999, was sold with an adjacent lot that the new owners intend to use to expand the facility to 40-45 units. The sales price netted a 6.6% cap. rate. For additional information, please contact Patrick Byrne or Ryan Saul.

Clousing and Binder Sell East Coast Florida Assisted Living Facility

Jeff Binder and Brad Clousing have sold a 44 unit assisted living facility on A1A in Florida. The 44 unit facility is 32,000 square feet and was built in 1996. Census at closing was 60%. The Seller is one of the larger owner/operators in the U.S. and had purchased the facility as part pf a multi-state/multi-facility transaction in 2006. The Buyer is a regional operator out of Florida.
The Seller assisted the Buyer by providing Seller financing in the form of a second mortgage. The primary financing is being provided in the form of conventional financing by a regional lender out of Central Florida.
Please contact Brad or Jeff for additional information.

Brad Clousing Sells Hollywood, Florida Assisted Living Facility

Brad Clousing has sold a 78 unit assisted living facility in Hollywood, FL, April 1, 2010. All the units are studios and there is approximately 3,000 square feet of medical office space in the building. The owners were looking to exit the senior housing market and were the owners since it's original construction in 1999. The Buyer, TJM Properties out of Clearwater, assumed the existing HUD loan but simultaneously executed an A& to reset the rate and leverage. The facility sold for over $100,000/unit at a 7.1% capitalization rate. For additional information on this transaction, please contact Brad Clousing at 630/858-2501.

Ryan Saul and Brad Clousing Sell ALF/SNF in Alabama

Brad Clousing and Ryan Saul sold a 50 unit Assisted Living/20 bed Skilled Nursing Facility for a large non-profit corporation based in Alabama. The 46,000 square foot home was built in 1994. The 20 bed SNF is housed in a separate wing, has all private rooms and is only certified for Medicare, not Medicaid and is typically full. The assisted living wing averages occupancy of 65% and has a unit mix of 32 studios, 8 suites and 10 one bedrooms. The Buyer is a regional operator out of Alabama and utilized conventional financing through a local bank.

Brad Clousing and Ryan Saul Announce Sale of Two Florida Assisted Living Facilities

Brad Clousing and Ryan Saul handled the sale of two Assisted Living Facilities in Southwest Florida, March 1, 2010. The facilities had 184 units combined (92 units each) and were built in 1999. For the Seller, it was a strategic disposition. The Seller, a national skilled nursing operator, had purchased these assets as part of a portfolio transaction that included skilled nursing facilities. The Buyer is a regional operator based in Florida who utilized conventional financing arranged through a regional bank. The properties sold for a 5.46% capitalization rate. For additional information, please contact Ryan or Brad.

Time to Sell?

Is now a good time to sell? We are experiencing a lack of properties available across the country. Many buyers of assisted living and skilled nursing have been sitting on the sidelines waiting for the right opportunity to get back in the M&A market.

Local and regional lenders are active in the market and are currently looking to place loans. If you have ever thought about selling, I believe now is an ideal time. Capital gains and interest rates are going to increase. Take advantage of limited supply available with high demand in the market to maximize your pricing. I am available for a confidential proposal to help you determine the current market value for your facility.

Contact me via Email by clicking here (Ryan Saul).

Sincerely,

Ryan Saul
Managing Director
Senior Living Investment Brokerage, Inc.

Brad Clousing and Jeff Binder Close Washington, D.C. Sale

This Skilled Nursing Facility was a strategic disposition that simply did not fit into the long term investment strategy of the Seller. The Buyer is a regional operator and assumed the existing HUD insured financing. The facility had struggled with survey issues in the past and the rate environment in Washington, D.C. can be somewhat unpredictable.

The 296 bed facility was built in 1982 and is 136,142 square feet. It sold for a 14.1% capitalization rate/.50x GIM. This was the first D.C. Skilled Nursing Facility to sell in 10 years.

If you would like additional information, please contact Brad or Jeff.

Capital Gains Tax Increases – how does this affect my senior housing facility?

Long-term capital gains, defined by assets held for more than one year, are taxed at a lower rate than short-term gains. Under President George W. Bush, this rate was reduced in 2003 to 15% for individuals outside of the lowest two income tax brackets. These reduced tax rates are effective through 2010. If they are not extended before the end of this year (and the current administration has shown no desire to extend), they will expire and revert to the rates in effect before 2003, which were generally 20%.

What does this mean to the senior housing industry? If the capital gains tax rates are increased as is expected in 2011, we will see an uptick in transaction activity in 2010 as current owners attempt to maximize their after-tax return on investment. Of course, much of the transaction activity will depend on lending community, but I believe that we will see current owners push their transactions through to close by the end of this year. This will cause more quality inventory to come on the market.

How does this impact the potential sale of my facility? As an example, if an owner has a cost basis of $3 million and will be selling his/her facility for $5 million after fees, the owner will be on the hook for $2 million in capital gains. If the 2010 tax rate continues to be 15%, the owner will be obligated to pay $300,000 in taxes if the transaction is completed in 2010. If the 2011 tax rate increases to 20%, the owner will have to pay an additional $100,000 in taxes if the transaction is completed after December 31, 2010.

Since typical senior housing transactions can take 6-8 months or longer to close, now is a great time to explore selling your senior housing facility. Senior Living Investment Brokerage, Inc. had a record year in 2009 in an uncertain economy. SLIBCO provides non-binding marketing proposals, whether you’re interested in selling soon or are just curious of your facility’s value.

Contact me via email at alley@seniorlivingbrokerage.com

Matthew Alley
Senior Vice President

Senior Living Announces Chicago SNF Sale

Ryan Saul and Michael Brundage sold a 313 Bed Skilled Nursing Facility in Chicago. Senior Living was able to procure 10 offers on the facility. In addition, the transaction took 82 days from listing engagement to closing. The Seller was a regional owner/operator and the Buyer, located on the East Coast, was seeking an opportunity to expand into the Midwest. The price per bed was over $71,000 even though the facility had negative cash flow. The 72,432 square foot building on 1.15 acres had a census of 64%. The facility enjoys an excellent reputation and a great location.

Ryan Saul and Jeff Binder Sell Wisconsin SNF

Senior Living Investment Brokerage successfully sold a 161 Bed Skilled Nursing Facility in Northern Wisconsin for the second time in six years. Originally sold in 2005 while in bankruptcy, the Buyer was attracted to the favorable bed price, potential for improving Medicare census and challenge of a turnaround situation. This was the only facility the Seller owned in Wisconsin and they had achieved their goal of turning the facility around. The Buyer is a regional operator and this acquisition will improvew their economies of scale. The Buyer utilized HUD Lean financing.