Patrick Byrne of Senior Living Investment Brokerage Sells Illinois Assisted Living Community

Patrick Byrne has sold a 65 unit assisted living community in Illinois located approximately 40 miles outside St. Louis. The facility opened in 2004 with much success. In 2008 the addition opened in the height of the recession and struggled before ultimately filling by offering "life contracts" to new residents. The facility census stabilized but the margins suffered due to below market rents. In recent years the margins began to improve as units leased at below market rates turned over. The Seller was a local group of investors. The Buyer was American Realty Capital who retained Meridian Senior Living as the operator. The census at the time of sale was 95.4% and the cap rate was 8.18%/3.67 GIM on annualized financials. For additional information contact Pat Byrne at 314-961-0070 or byrne@slibinc.com

Patrick Byrne, Nick Cacciabando and Matt Alley Team up to Sell Missouri ALF

Senior Living Investment Brokerage, Inc. sold a 23 unit, 46 licensed bed assisted Living community in Missouri. The building is approximately 11,600 square feet constructed in 1996 on approximately 4 acres of land. The community is located just outside of Branson, Missouri. The building has historically ran close to 100% census with stable financials. The sales price $2,300,000 ($100,000/bed) produced a cap rate of 10.5%/3.02 EGIM. The Seller was is an independent owner/operator exiting the business. The Buyer is a regional owner/operator based in Idaho with other operations in Missouri. For additional information, please contact Pat or Nick at 314/961-0070 or Matt at 630/858-2501

Brad Clousing Sells Another Florida Assisted Living Community: $26,600,000

Brad Clousing has sold an 89 unit Assisted Living Community in Florida for $26,600,000/$298,876 per bed. The property is adjacent to The Villages, Florida. The purpose built community was constructed in 2010 and has land available for expansion with plans in place for an additional 59 units. The current configuration of the building provides for 69 assisted living units and 20 memory care units. The 74,112 square foot community boasts many high-end finishes such as granite countertops in the units, expansive common areas and well appointed courtyards. The floor plan consists of studio and one bedroom units ranging from 345 to 619 square feet. Within 3 weeks of commencing marketing, Senior Living Investment Brokerage was able to procure 5 offers to purchase this community from "top tier" institutional buyers. The asset was encumbered by approximately $11 million HUD insured financing, which was paid in full at closing. The buyer and seller split the pre-payment penalty which was approximately 7% of the loan balance. The census at the time of sale was 96% and the property sold for a 7.5% cap rate. For additional information, please contact Brad Clousing at 630/858-2501 or clousing@slibinc.com

Operating Margins of Senior Living Communities compared with Apartment Buildings

In analyzing thousands of communities each year, we find a very wide range in operating margins.  Newer, larger communities have higher operating margins than older, smaller facilities.  Communities with high occupancy rates, have higher operating margins than facilities with lower occupancy rates. 

However, stabilized assisted living communities typically have operating margins (EBITDA margin) between 25-40%, and independent living communities between 30-40%+.   Stabilized apartment buildings that are similar in age and size have operating margins between 40-55%.  This is due to the fact that apartment buildings do not have all of the extra services, medical, food, activities and staffing that independent and assisted living communities have.  Additionally, apartment buildings typically have less common areas; kitchens, dining rooms, etc, allowing for more rentable square feet, than senior living facilities. 

Because of the higher operating margins and lower variable expenses, investors perceive apartment buildings to be lower risk than senior living facilities resulting in lower cap rates (higher prices).  Apartment buildings can have cap rates 150-250 basis points lower than a similar age and size senior living facility.   However, as senior living facilities continue to become more main stream with investors, the perceived risk decrease resulting in a smaller spread in cap rates.

For more information on what your Seniors Housing Community may be worth, please contact Jason Punzel at punzel@slibinc.com or 630-858-2501.

Selling..Keep calm..Where to start?

So, you have thought about selling your seniors housing or long-term care community.  Now what? 

For most of our clients the stress and anxiety immediately sets in.  Put that fear to rest by working with a professional that handles hundreds of transactions.  Senior Living Investment Brokerage, Inc. is there to help you.  

Here is one tip.  As part of the process, take inventory of your community and what might need to be fixed or improved.  One of the biggest stresses is when someone points out the things wrong with your community.  Beat them to the punch and it will avoid a lot of unnecessary stress.  Make sure floors/carpets are clean, paint is touched up and it is a pleasant experience to walk the halls.  If you make a good first impression with the condition of the community, it will alleviate a lot of the tedious investigation.  What they see first will give them the impression of how the rest of the community is taken care of.

Contact Ryan Saul to discuss our sales process and other things you can do to alleviate stress.

Tom Rusthoven and Brad Clousing Sell Three Assisted Living Communities in Michigan

The three Assisted Living Communities are located within a mile of each other in Southeast Michigan. The buildings, constructed in 1985 and 1992, have a total of 78 units. One of the buildings is dedicated to memory care services. The transaction sold at an 11.9% capitalization rate for over $68,000 per unit. The Buyer is a regional owner operator planning to implement additional marketing resources to neighboring Ohio residents as a means to increase census from the current 65%. For additional information, please contact Tom Rusthoven at rusthoven@slibinc.com or Brad at clousing@slibinc.com or 630/858-2501.

Ryan Saul and Patrick Burke Sell Virginia Certificate of Need

Patrick Burke and Ryan Saul sold a 120 Bed Skilled Nursing CON in Virginia. The nursing home was to be closed and the CON was sold to a developer headquartered in the Southeast. The Buyer plans on relocating the CON to a neighboring county and building a new community/building. For additional information, please contact Ryan at ryansaul@slibinc.com or Patrick at burke@slibinc.com 630/858-2501