Affiliation or Asset Sale?

Many small skilled nursing operators and health systems are trying to decide what future they have within the senior housing sector.  One important question they are asking themselves is whether or not they should sell their facility outright, or affiliate with a larger operator?  Usually, the affiliation option is investigated first since the pool of firms to affiliate with is smaller and this tends to keep the discussion confidential.  In a recent conversation with a larger operator, the owner expressed his frustration that many smaller companies come to him wanting to affiliate, but then want his firm to conform to their way of operating, and not the other way around.  If you are thinking of affiliating, be prepared to give up a lot of control, because the "host" company will need to bring the operating model of your facility into alignment with the other facilities already in the portfolio.  The sale option obviously has more finality to it, but can oftentimes provide non-profit entities with funds they can reinvest into their core niche or mission.  If a potential sale is even on the table of discussion, it may help to know what your facility is worth in today's market.  Senior Living Investment Brokerage Inc. is always willing to prepare a free proposal to determine current market value and share what trends we're seeing in your geographic market.

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

Toby Siefert Brokers Sale of Pennsylvania Personal Care Home

Toby Siefert sold a 35 unit personal care home in Indiana, PA.  The facility was originally a hotel but had been converted and renovated into senior housing in 1986.  The facility is 17,530 square feet on 2 acres.  The building has 35 units of which 30 are private rooms.  The facility only accepts private pay residents.  The Seller was a local family and this was there only senior housing asset.  Senior Living Investment Brokerage was able to identify a first time Buyer for the facility.  Senior Living was also instrumental in assisting the Buyer in obtaining an SBA loan to purchase the personal care home.  The Buyer expects to be able to increase census and revenue at the facility.  For additional information, please contact Toby Siefert at 630/858-2501 or siefert@slibinc.com 

Sell Now - Skilled Nursing always changing

You can bet skilled nursing reimbursement will be one area the federal government will look at to reduce the national deficit.  They are looking into lowering the Medicaid provider tax threshold.  This is referred to as the "bed tax".  They want to limit the threshold to 3.5% from 6.0%.  Doing this would limit the states' ability to fund Medicaid dollars through matching federal funds.  Right now, operators lose money on Medicaid residents.  The government is thinking it will save close to $22 billion dollars over 7 years by reforming the bed tax.  What do you think will happen to values if this happens?  What do you think will happen to nursing home owners and those providing services?  Better yet, what do you think will happen to the resident's level of care?

If you have thought about selling your nursing home, now would be an ideal time.  Take advantage of the high demand and low cost of capital environment before the government makes more changes.  Please contact Ryan Saul for a confidential proposal to help determine market value.

Jeff Binder Sells Las Vegas Assisted Living/Memory Care Facility

Jeff Binder has sold a 58 unit/64 bed aasisted living building and a 20 unit/45 bed memory care building.  Included in the sale was an undeveloped parcel between the buildings that could be used for expansion of one or both of the facilities.  The Seller, a regional owner/operator, decided to divest of the property in order to focus on their larger facilities in the area.  At the time of sale, the facility was underperforming.  The Buyer is a regional operator from California.  They plan on increasing operating efficiencies and use their their marketing experience to improve census.  The Buyer is also in the process of purchasing another Las Vegas facility which they can use to increase hteir cost center efficiencies.  The buildings were constructed in 1996/1997.  Even though the facilities were underperforming, Senior Living Investment Brokerage, Inc. was able to field multiple offers and ultimately sell the facilities for $4,000,000.  For additional information on this sale or on how Jeff can assist you with the  confidential sale of your facility, contact Jeff at 314/961-0070 or binder@slibinc.com 

George Pappas Sells ILF/ALF in Montana

George Pappas has sold an assisted living facility and independent living facility that were currently in receivership.  The two facilities are connected.  The assisted living facility is 42 units and was built in 2000.  The independent liing facility is 198 units, built in 1966 and utilized a HUD 202 loan.  The ILF has a Rent Supplement contract with HUD that will expire June 1, 2015.  The property had previously been owned by Sunwest and was sold through the bankruptcy court.  The Buyer is a local real estate investor and this is his first seniors housing investment.  The propery sold for an 18% capitalization rate.  For additional information, please contact George Pappas at 630/858-2501 or pappas@slibinc.com