Nick Cacciabando and Patrick Byrne Sell Oklahoma Portfolio

Patrick Byrne and Nick Cacciabando have sold two seniors housing campuses in Tulsa and Bristow, OK, for a local family. The Tulsa campus comprised of a 116 unit senior independent living facility, a 90 unit assisted living and residential care facility and a 117 bed skilled nursing facility. The Bristow campus comprised of a 106 bed skilled nursing facility and a 16 unit assisted living facility. The Seller was a local family that had been in the business for 50 years. They were the original owners/developers of these communities. These were their only LTC/Seniors Housing assets. The Buyer is a regional owner/operator with an existing presence in Oklahoma. For additional information on this transaction or how Nick or Pat can assist you with the sale of your family owned/operated seniors housing community, please call 314/961-0070 or contact Nick at nbando@slibinc.com or Pat at byrne@slibinc.com

Ryan Saul Brokers Indiana CCRC

Ryan Saul sold a 157 Unit CCRC in Evansville, Indiana. The 201,435 square foot building consisted of 80 Independent Living Units, 33 Skilled nursing Beds and 9 Villas on 73 acres. It opened in 1985 with an addition in 1999 (AL). In 2009, the first floor was converted to skilled nursing. The Seller was a not-for-profit trust created by a wealthy community member. The Buyer is a not-for-profit as well that hired an Indiana based operator. The operator will be able to leverage their efficiencies and operating model to improve the financial performance of the CCRC. The sales price was $12,500,000. For additional information, please contact Ryan Saul at 630/858-2501 or ryansaul@slibinc.com

Brad Clousing and Jeff Binder Sell 62 Unit Seniors Housing Community in Alabama

Jeff Binder and Brad Clousing sold a 62 unit seniors housing community consisting of 15 independent living cottages, 35 assisted living units and 12 memory care/SCALF units. The community benefits from being the largest facility in Walker County and the only facility in the area offering memory care services. This is the only facility the Seller operates in Alabama and was divesting of the asset in order to deploy capital to other projects and consolidate operations. The property was built in stages in 1998/2004/2006 and census averaged 94%. Senior Living Investment Brokerage, Inc. was able to generate national interest in the community. Multiple offers were procured and a national REIT was selected as the Buyer. The property will be run by a regional operator based in Florida- this is their second building in Alabama. The community sold for $7,000,000 at an 8.50% capitalization rate. For additional information, please contact Brad at clousing@slibinc.com or Jeff at binder@slibinc.com

Selling in a strong market

As debt and equity has become easier to access, the market for senior housing facilities has strengthened with cap rates, gross income multiples and per-bed numbers improving over the past 12 months.

There have been new investors entering the industry to take advantage of higher cap rates found in most other real estate sectors.  They have partnered with strong regional or local operators in order to acquire both cash-flowing and turnaround facilities.

What does this mean for an owner/operator?
The time has not been better to sell your senior housing facility.  While the uncertainty of "Obamacare", Medicaid reimbursement changes and concern over the future of Medicare undoubtedly weighs on all current operators, there continues to be aggressive buyers that are willing to purchase facilities at top dollar. 

What are the risks in holding?
An increase in interest rates, a retreating of debt and equity from the healthcare industry, major regulatory changes and cuts in reimbursement are all risks that could negatively affect your facility's value.

If you are considering selling your facility, take advantage of the current strong market.  Senior Living Investment Brokerage, Inc. provides non-binding marketing proposals.  We would be privileged to work with you in the sale of your facility.

Contact me via email at alley@slibinc.com or phone at (630) 858-2501.

Matthew Alley
Managing Director 

Impact of Tax Hikes on Senior Housing M&A Market

After the American public spent much of 2012 contemplating the uncertainty in Washington, President Obama and Congress were able to engineer a last-minute deal that addressed the President's campaign to raise tax rates on wealthy Americans and avoided the revenue side of the Fiscal Cliff.

Tax rates were raised on incomes above $400,000 for single earners and $450,000 for married couples, which I will define as the "top tax bracket".  It also blocks spending cuts, also known as "the sequester" for two months, which sets up a whole new negotiation at the end of February.  How that might affect Medicare and Medicaid reimbursement is a topic for another time.

What does this mean to the senior housing M&A market? For earners in the top tax bracket, capital gains tax rates will increase from 15% to 20%.  As of now, there will also be a 3.8% tax on capital gains for the Affordable Care Act, which is more commonly known as "Obamacare". These increases in capital gains tax rates led to a flurry of transactions being completed in the fourth quarter of 2012.

This uptick in activity has led to very little senior housing inventory being on the market currently, with many sellers opting to list their properties in the latter half of 2012, as opposed to wait until 2013 in order to lock in more favorable tax treatment.

How can this help sellers of senior housing facilities? The change in tax treatment for sellers has not affected buyers' appetite for acquisitions, as there is still a great deal of equity and debt financing available for strong operators throughout the country.  With many aggressive buyers at the table and little inventory available, simple supply & demand economics would suggest that the first half of 2013 will see an increase in pricing for senior housing facilities.

As a potential seller, what should I do? While there is still a lack of quality inventory on the market, it might make sense to pull the trigger on selling your senior housing asset.  I believe that as the year goes on, more owners will try to take advantage of strong pricing multiples, which will lead to a greater supply and less attention to each specific listing.

If you are interested in selling or are just curious of your facility's value, Senior Living Investment Brokerage, Inc. provides non-binding marketing proposals.

We sold over $260 million in senior housing facilities in 2012.  We would be privileged to work with you in the sale of your facility.

Contact me via email at alley@slibinc.com or phone at (630) 858-2501.

Matthew Alley
Managing Director

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

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.

Ryan Saul and Brad Clousing Announce Utah CCRC Sale

Brad Clousing and Ryan Saul recently sold a 327 Unit/Bed CCRC in Salt Lake City. The Seller is a not-for-profit health care system headquartered outside Utah. This was their only asset in Utah. The Buyer is a national owner/operator out of California. Brad and Ryan were able to procure 10 offers on the facility. Due to confidentiality, please contact Ryan or Brad at 630/858-2501 for additional information.

Matthew Alley and Jeff Binder Sell Texas CCRC

Jeff Binder and Matthew Alley sold a 142 Unit/178 Bed Continuing Care Retirement Community in Southeast Texas. Constructed in 2001, the community consists of 40 Independent Living Units, 78 Assisted Living and Adult Day Care Beds and 60 Comprehensive Nursing Beds. The 132,487 square foot facility is on 12 acres and census at the time of sale was 94%. The Seller was a local regional medical center and the Buyer is a publicly traded REIT and will be operated by a local regional operator. Senior Living fielded 8 bona fide offers from owner/operators across the country. For additional information please contact Matt or Jeff.

Pappas, Clousing and Binder Sell Iowa CCRC

Senior Living Investment Brokerage, Inc. has sold an Iowa CCRC for $11,250,000. The facility consisted of 10 Independent Living units, 41 Assisted Living units, 34 Memory Care units and 54 Skilled Nursing beds. The Seller is one of the larger owner/operators in the country and had purchased this asset as a multi-facility/multi-state transaction. They do not have a strong presence in Iowa. The Buyer is out of California but was originally from Iowa. Originally built in 1968 and renovated/expanded in 1998. Financing was provided by a regional lender. For additional information please contact Jeff Binder, Brad Clousing or George Pappas.

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.

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.

Sale of CCRC Announced

Nick Cacciabando and Jeff Binder have sold a CCRC in Kansas for a national owner/operator. The campus is comprised of a 140 bed Skilled Nursing Facility, a 37 unit Assisted Living Facility and 82 units of Independent Living. The property was originally developed in 1988 and underwent extensive remodeling/renovation in 2006 and 2007. The impact of these improvements are being realized in the steadily improving financial and census reslts since completion. Census at the time of sale was 95% and the property sold at a 9% cap rate.

The Buyer is a Real Estate Investment Trust (REIT) which owns senior living properties throughout the United States.