Why Build?

Who wants to deal with all of the hassles associated with development and building.  We constantly hear about overruns of time and money.  Wouldn't a better use of time and resources be to buy an existing, struggling facility and reposition the asset?  That is where the highest return exists.

There are a number of turn around opportunities that just need some physical plant or operational TLC.

If you have a turn around assisted living or skilled nursing facility that you would like to sell, please contact me to discuss your value and how we can help you achieve your investment objectives.

If you are looking for turn around facilities to purchase, please contact Ryan Saul to see if there are any properties available that meet your criteria.

Know the Lingo

If you are new to the industry, it won’t be long before you have a conversation that includes an unfamiliar acronym or abbreviation.  “Why does everybody keep saying Sniff?” (skilled nursing facility).  Here are some common acronyms that will help strengthen your vocabulary: 

GSEs: Government Sponsored Enterprises (such as Fannie Mae and Freddie Mac).   Established with the purpose of improving the efficiency of capital markets.

TPA: Transfer of Physical Assets- In reference to the application used for a property sales transaction involving the assumption of a HUD-insured loan.

ACOs: Accountable Care Organizations.  Providers such as hospital systems or physician groups take on responsibility for groups of patients.  Medicare and participating insurers will generally offer financial rewards for ACOs that save money and meet quality goals for these patients.

RUGs: Resource Utilization Groups. Nursing homes have a daily base rate of reimbursement that is adjusted based on the grouping of nursing or therapy service for each patient.

CHOW: Change of Ownership.  When you buy a facility, you will need to go through the CHOW process to get the approval of the State licensing department.  This process can vary from 30-365+ days depending on the state.

For other questions surrounding the sale of nursing homes or sale of assisted living facilities, please contact Toby Siefert at siefert@slibinc.com  or 630-858-2501 ext. 235

Matt Alley Closes Another Texas Transaction

Matthew Alley has sold a 120 bed skilled nursing facility in Texas.  The Seller was a local owner/operator.  Matt was able to utilize the Senior Living Investment Brokerage, Inc. database/network to procure numerous offers on the facility.  The Buyer is from the East Coast and this is their first facility in Texas.  Due to the confidential nature of this offering, additional information is not available publicly.  For additional information on this transaction, please contact Matt Alley at 630/858-2501 or alley@slibinc.com

Nick Cacciabando and JeffBinder Handle Oklahoma Transaction

Jeff Binder and Nick Cacciabando represented the Seller of a 60 bed skilled nursing facility in Marshall County, Oklahoma.  The facility, which was built in 1976, was owned and operated by a local family and has a great reputation in the southern Oklahoma community.   The Buyer is a regional owner/operator expanding their operations in Oklahoma.  They plan to improve on a number of operational inefficiencies.  Although the facility was only operating at 60% census, it was profitable and sold at a 15.1% capitalization rate.  For additional information, please contact Nick or Jeff at 314/961-0070.

Nick Cacciabando Represents Kansas SNF/RCF Seller

Nick Cacciabando has sold a 59 bed skilled nursing and 13 bed residential care facility in southwest Kansas.  The facility was owned by a local non-profit owner/operator.  The Buyer is an owner/operator based in Denver, Colorado, with an existing presence in southwest Kansas.  The facility's census was 74.7% and the operations had been running at a deficit for the past few years.  The one story building contains approximately 31,500 square feet and was originally constructed in 1963 with additions in 1988, 1995 and 2001.  For additional information please contact Nick Cacciabando at 314/961-0070 or nbando@slibinc.com 

Patrick Byrne Sells Missouri CCRC

Pat Byrne has sold a CCRC located in a suburb of Kansas City, Missouri.  The facility consists of 112 skilled nursing beds, 46 residential care beds (23 units) and 48 independent living units and was built in 1992.  This represents the seller's last senior housing asset.  Although the facility's profit margins had dropped in receent years despite a relatively consistent census, the Buyer looks forward to achieving profit margins experienced as recently as 3 years ago.  The Seller had also recently placed attractive, assumable HUD debt on the property.  The facility also benefited from a recently funded $6.00 PPD Medicaid rate increase and another rate increase is scheduled for the near future.  The Buyer is an Ohio based REIT which will be leasing the property to a Missouri based operator.  The purchase price was $13,500,000.  For additional information, please contact Patrick Byrne at 314/961-0070 or byrne@slibinc.com

REITs are here to stay.....For good!

REITs have been around for 50 years, but have most recently made their splash on the Seniors Housing industry.  The headlines have been dominated by the REITs making acquisitions.  A billion here, A billion there, a couple hundred million over there.  Traditional financing is having trouble competing with the rock bottom cost of capital of the REITs.  The REITs have their pick of the litter and have been buying high quality, cash flowing deals anywhere they can get their hands on them.  What happens when there aren't any portfolios left to purchase?  I believe we will start to see the REITs acquire high quality, individual assets to throw into the master leases of some of their existing portfolios. We are seeing capitalization rate compression and higher pricing simply from the blockbuster deals that the REITs are completing.

Senior Living Investment Brokerage has completed a number of deals with healthcare REITs.  We have relationships and access to all active REITs in Seniors Housing.  If you have thought about selling your nursing home, assisted living, independent living or CCRC, please contact me at Ryan Saul to talk about how we can access all of the REITs and maximize your return.

Government Regulation and its Effect on Sales

As we come towards the end of 2012, we begin to reflect on what sales trends we saw emerging in 2012 that may have been different or more pronounced than years prior.  As I cover sales of assisted living facilities and skilled nursing facilities throughout the Mid Atlantic and Northeastern states, one thing that came up over and over again this year was the effect of government regulation on both Sellers and Buyers.  Besides those looking to retire, the second most common reason individual owners told me they wanted to sell was that they just couldn’t handle the increasing regulation and oversight on their business.  In my territory, Sellers in Pennsylvania and Virginia seem to have been especially over-burdened.  This is a shame to hear, since the majority of owner/operators we work with have been in the business a long time, and have made a career of compassionate care for seniors.

Regardless of the election outcome, we expect that regulation over senior housing will continue to frustrate some owners to the point of selling, and require more patience on behalf of Buyers.  Each State has its own quirks, so if you have thought about buying or selling an assisted living facility or skilled nursing facility, we encourage you to contact Senior Living Investment Brokerage, Inc. to discuss our experience in each state, and the expected time frame and hoops to get from start to finish.

For more information, contact Toby Siefert at siefert@slibinc.com or 630-858-2501

Ryan Saul Sells Assisted Living/Memory Care Facility in Ohio

Ryan Saul has sold a 61 unit assisted living/memory care facility in Ohio.  Ryan had previosly sold the facility 4 years ago for $6 million.  It had been operationg just below breakeven and the Buyer's plan was to expand in the state.  The owner's plans changed and they made the decision to focus on other states within their portfolio.  The new Buyer, based out of Kentucky, plans on increasing occupancy by utilizing the Medicaid waiver which the facility was certified for in July.  For additional information please contact Ryan Saul at 630/858-2501.

Jeff Binder Presents at the HUD Kaizen in Washington, DC

Jeff Binder was one of three industry participants invited by the Department of Housing & Urban Development, Office of Healthcare Programs to spend two days in Washington participating in their Kaizen. Binder spent much of the first afternoon presenting an overview of the current M&A market for seniors housing & long-term care properties. He pointed to Senior Living Investment Brokerage, Inc.'s participation in well over 100 transactions over the past three years as the foundation for the depth of the analysis and wide-ranging market statistics he was able to profile. Over the remaining time Jeff was in Washington, he participated in a round table discussion with the Office of Healthcare Programs employees to discuss HUD policy related to their various senior housing and long-term care programs.

Pat Byrne Leases a Missouri Skilled Nursing Facility

Patrick Byrne has leased a 76 Bed Skilled Nursing Facility in north Saint Louis County.  As part of the lease agreement, a purchase option was executed as well.  The facility has always stood out as one of the area's best providers and boasts a quality physical plant to complement it's great reputation.  Located in a middle class municipality, the facility has historical census ove 90% with an emphasis on Alzheimer care.  The Lessee is based in St. Louis but lacked a presence in this market.  This offered a strategic acquisition near their home office.  For additional information, please contact Pat Byrne at 314/961-0070 or byrne@slibinc.com 

22nd Annual NIC Conference

Senior Living Investment Brokerage, Inc. will once again be sponsoring the National Investment Center Conference September 26th-28th.  Ryan Saul, Managing Director will be speaking 3:30-5:00 on Thursday:  Not All Valuations Are Created Equal: Pricing Variables Today—and Tomorrow.
Call or email one of our brokers to schedule an appointment to meet while at the conference or stop by our table at the Meet the Investors Reception.

Ryan Saul Sells Another Indiana Skilled Nursing Facility

Ryan Saul sold a 180 bed skilled nursing facility in Northwest Indiana.  The facility was built in 1972 and was in excellent condition.  The census at the time of sale was 80% with a 38% quality mix.  Senior Living Investment Brokerage, Inc. conducted a confidential sales process while fieldng multiple offers that resulted in a record price per bed for a skilled nursing facility in the State of Indiana.  Ryan, working with the Seller, negotiated a sale price of $12,850,000 ($71,389/bed) for an 11.7% cap rate.  The Seller is a regional owner/operator that has utilized Ryan's services in the past.  This particular facility does not fir their prototype of skilled beds combined with assisted living.  Ryan was able to identify a Buyer from outside of Indiana.  The Buyer currently owns 12 facilities and were actively looking to diversify their portfolio.  They plan on focusing on certain cost centers and raising census.  for additional information, please contact Ryan Saul at ryansaul@slibinc.com or at 630/858-2501.

Market Gaining Strength

The evidence is there.  The market continues to be torrid.  There is very little supply available, interest rates are at historic lows and buyers are aggressively looking for assisted living and long-term care facilities to buy.

Please join me at this year's NIC Conference September 19-21 in Chicago to network and hear about the current state of the market.  I will be guest speaking and presenting a case study at a breakout session on Thursday where you can hear the variables that impact you as a buyer or a seller.  Learn how we value properties and the variables that come into play in the current market.

Please contact Ryan Saul to discuss the current market and the value of your property.

Matt Alley Sells 52 Medicaid Beds in Texas

Matt Alley recently represented a local non-profit group in the sale of 52 Medicaid beds in Williamson County, Texas.  The buyer is a developer located in Texas.  The buyer will also have the opportunity to benefit from an increase of 13 additional Medicaid beds upon development of a new facility per the State of Texas allowing a 25% increase in the number of beds for new development projects.  For additional information, please contact Matt Alley at alley@slibinc.com or 630/858-2501.

Patrick Byrne and Ross Sanders Sell Iowa Skilled Nursing Facility

Ross Sanders and Patrick Byrne sold a 50 bed skilled nursing facility in Western Iowa.  The facility had experienced a sharp decline in revenue recently due to a new facility opening nearby.  Although the facility was unprofitable and was facing competition for residents from a newer facility, Pat and Ross were able to procure multiple offers from local and regional Buyers.  The Seller was an owner/operator from outside the state that wanted to focus on their core markets.  The new owners are committed to improving the asset and giving it additional attention.  Also, the reimbursement environment in Iowa is improving which will have a significant improvement on the bottom line.  For additional information, please contact Ross Sanders or Patrick Byrne at 314/961-0070.

What's happening with CCRCs?

A continuing care retirement community (CCRC) is a facility that includes multiple levels of care.  That includes Independent Living, Assisted Living, and a small Skilled Nursing component.  While the concept of aging in place is appealing, the distressed sales and financial troubles of CCRCs have taken over the headlines.

Based on the difficulties in the housing market, we believe the troubles for CCRC communities is going to continue for the next couple of years.  These properties, with an entry fee model, can't capture residents until they sell their homes.  In addition, the communities have a significant amount of debt.  The only thing that might save these communities is the low cost of capital and groups with strong balance sheets that can purchase them for cents on the dollar.

If you are interested in acquiring a CCRC, please contact me at Ryan Saul.  If you have a community that you have thought about selling, I would be happy to put together a confidential proposal.

Brad Clousing and Patrick Byrne Sell Georgia Skilled Nursing Home

Patrick Byrne and Brad Clousing sold a 160 bed SNF for a local hospital authority.  The 45,000 square foot facility was built in phases between 1968 and 1974 but was well maintained and recently updated.  The facility was operated similar to a hospital and staffed at a level that could not be supported by the margins in the nursing home industry.  Despite the poor financial performance, substantial upside could be found in the existing operations and the foundation was there for a new owner to succeed.  Although it was losing over $400,000/year at the time of the offering, the facility was expecting a substantial Medicaid increase which was expected to reduce the losses soon after closing. 
Within 7 days of the initial offering, Senior Living Investment Brokerage, Inc. was able to procure multiple offers, with several buyers positioned  at the list price.  After a request for best and final offers and an evaluation of the interested parties, AdCare Health Systems was chosen.  The terms of their offer, history of transitioning non-profit facilities and their ongoing working relationship with Senior Living Investment Brokerage, Inc., resulted in the Seller selecting their proposal.  The ultimate sale/closing price was $240,000 over the intitial offering price.  For additional information, please contact Brad Clousing at clouisng@slibinc.com or Patrick Byrne at byrne@slibinc.com 

Cacciabando, Alley and Binder Sell Kansas Facility

Jeff Binder, Matt Alley and Nick Cacciabando have sold a 56 bed skilled nursing/20 unit assisted living facility in Kansas.  The facility is located in Rose Hill, Approximately 18 miles outside of Wichita.  The one-story, 33,000 square foot facility was built in 1971 and 1978 and renovated in 2001-2002.  At the time of the sale, the census was 94% and the property sold at a 14% cap rate/.97x GIM for $55,900/bed/unit.  The Seller was a local owner/operator.  Senior Living was able to generate multiple offers and after a competitive bidding process, the successful Buyer was an owner/operator headquartered in the Dallas-Fort Worth area with an existing presence in Kansas.  For addisional information on this sale or to request a confidential proposal on your seniors housing facility, contact Senior Living Investment Brokerage, Inc.

Summer is heating up

The M&A market for long-term care and seniors housing has been somewhat quiet over the last few months.  However, Senior Living Investment Brokerage has been busy with a number of proposals most recently.

What does that mean for you?  We predict there will be a wave of new inventory to hit the market in the next couple of months.  Summer vacations and travel may cause some delays, but we are confident that you will see a surge of deals closing in the fourth quarter.  If you have thought about selling, now would be a great time to go to market with limited supply of quality opportunities available.

Please contact Ryan Saul for a confidential proposal or to learn more about what we have available.

Patrick Byrne and Ryan Saul Sell Alzheimer's Care Facility

Ryan Saul and Patrick Byrne sold an underperforming, 46 Bed Skilled Nursing Facility (offering assisted living services) located in a suburb of Kansas City, Missouri.  Originally built by a local hospital to service the MI population in 1990, it was sold and renovated to an alzheimer care facility in 2002.  The facility operates at or near capacity but has recently shifted to a heavy Medicaid/Hospice census mix.  The Buyer is a regional operator with a growing presence in the Kansas City market.  The property includes acreage for expansion and  a vacant building that the new owner plans to renovate to use as a corporate office.  For additional information on this facility or to inquire how Senior Living Investment Brokerage, Inc. can assist you in the sale or purchase of your seniors housing property, please contact Patrick at byrne@slibinc.com or Ryan at ryansaul@slibinc.com

Who Needs To Know?

Perhaps we (Senior Living Investment Brokerage, Inc.) take such things for granted since we have been involved in the Seniors Housing sector for so long, but there can be a list of people who need to be made aware of the pending sale of a long-term care facility. Most notably, the state regulatory authority, where notice of a change of ownership must be made anywhere from a few days to several months prior to closing. Obviously, when you see an approval period of multiple months, the rest of the structure of the transaction must take this into consideration. We are strong believers in having all contingencies removed prior to notifying the state of the change of ownership. Therefore, there could be several months between the end of due diligence and closing. The longer this time period, the greater likelihood something material can occur which potentially could impact the transaction: a bad survey, dramatic change in census, key personnel leaving, etc.  While it is common for a seller to feel comfortable at this point in the transaction, it is crucial to maintain operational focus to minimize the risk of any event occurring which could derail the deal. Senior Living Investment Brokerage, Inc. remains a key partner in the transaction process, and we are aware of the many challenges a Seller faces while going through the sales process.  Having closed transactions in so many different states, we are aware of the nuances of dealing with different states and the challenges of navigating the final months of a transaction.

Important Tax Information

The following article is important tax information for anyone considering the sale of their seniors housing facility.  Contact Grant Kief at kief@slibinc.com or 630/858-2501 if you would like a marketing analysis prepared for your property.
http://online.wsj.com/article/SB10001424052702303879604577410143118102490.html

Brad Clousing and Ryan Saul Handle Florida ALF Sale

Ryan Saul and Bradley Clousing sold a 63 unit Assisted Living and Memory Care Facility in central Florida.  The facility, constructed in 2010, is located adjacent to The Villages, a premier retirement community with over 80,000 residents ages 55 and over.The facility was constructed under the HUD 232 program.  Since opening in 2010, the facility has steadily improved to over 80% occupancy.  The improving census combined with the location and newer construction, should make this a successful investment for the new owners.  For addisitional information, please contact Brad or Ryan at 630/858-2501.

How Senior Living Can Help

It is more than just finding a seller and matching up a buyer.  One area where we help get a deal done is  managing the back end once a purchase agreement is executed.  Most recently, appraised values are coming into question.  Senior Living Investment Brokerage, Inc. knows all of the active, qualified appraisers in the Seniors Housing Industry.  How can we help?

We know the market inside and out and will be sure to connect with the selected appraiser before they begin their work.  Senior Living Investment Brokerage can provide the most current, valid comparable data that support the subject property.  We find that being proactive and detail-oriented often translates into a higher success rate of getting deals closed.  Please contact Ryan Saul to discuss the current market and how we can help with your buying and selling needs.

Brad Clousing Sells 168 Unit Florida Assisted Living Facility

Bradley Clousing sold a 169 unit Assisted Living/Memory Care Facility located in the St. Petersburg/Tampa Bay MSA.  The facility was built in 2010 and consists of 168 units/218 beds and 8 commercial suites.  The facility has enjoyed a steady lease-up to over 80% occupancy since opening and outpacing the initial projections.  The facility had existing assumable, non-recourse HUD debt with favorable terms.  For additional information on this transaction or information regarding the Florida seniors housing market, contact Brad Clousing at 630/858-2501 or clousing@slibinc.com