Ryan Saul and Jeff Binder Sell Two Skilled Nursing Facilities

Jeff Binder and Ryan Saul of Senior Living Investment Brokerage, Inc. were selected to represent a REIT in the sale of two skilled nursing facilities in Wisconsin. Located approximately 5 miles from each other in the northeast region of the state, the two facilities offer a combined total of 155 beds. At the time of the sale, the combined occupancy had been stable at 70.5%. Built in 1965 and 1969, the operations had a negative EBITDA of over $300,000. The Seller is a national REIT divesting non-performing assets. The Buyer is a national long-term care operator expanding their presence in Wisconsin. For additional information, please contact Jeff Binder at binder@slibinc.com 314/961-0070 or Ryan Saul at ryansaul@slibinc.com 630/858-2501.

Interest Rates and REITs

When interest rates start hitting the headlines, watch out.  We have seen the largest interest rate increase over the past few months.  We all know the Fed is going to slow down the bond buying efforts as the economy improves.  As interest rates increase, the value and appetite of REITs to aggressively acquire decrease.

Over the past 5-7 years, the REITs have maintained the lowest cost of capital in the low interest rate environment.  This has been a huge source of financing for many owners and buyers of Seniors Housing and long-term care properties.  Billion dollar deals in the headlines for REITs placing capital.  Could the end be near?  Not yet . . . . 

I don't see rates drastically increasing in a short period of time.  Rather, there will likely be smaller increases over a longer period of time.  What does that mean?  Act NOW.  If you have thought about selling, now would be an ideal time.  Sell in one of the strongest markets in history while you still can.  It is only a matter of time before the increase in interest rates causes a disconnect between seller expectations and what a buyer can pay based on their cost of capital.

Please contact Ryan Saul for a proposal to determine your current market value.

Matthew Alley Sells Another Pair of Texas SNF's

Matt Alley has sold two Texas Skilled Nursing Facilities located in Abilene and Waco. They are both 120 beds and specialize in dementia care. The facilities were owned by a non-profit organization based in Austin. The Seller specializes in Continuing Care Retirement Communities and these were there only stand alone skilled nursing facilities. Built in 1994 and 2004, these high quality facilities were profitable with an average 85% census, but should enjoy the benefits of being part of a large regional operator. The Buyer is a publicly traded REIT specializing in healthcare. The REIT will be leasing the facilities to an operator headquartered in Maryland that operates several SNF's in Texas. The facilities sold for over $59,000/bed at a 10.4% capitalization rate. For additional information, contact Matthew Alley at 630/858-2501 or alley@slibinc.com