Ryan Saul Handles $63,000,000 Indiana/Iowa Transaction

Ryan Saul recently sold 19 Skilled Nursing Facilities of which 17 were in Indiana and 2 were in Iowa. The total portfolio consisted of 1,159 beds with an overall occupancy of 80% with approximately 12% Medicare and 10% Private Pay. A couple of the communities included assisted living but were higher acuity than normal. The Seller began accumulating his portfolio in 2000 adding a couple of buildings each year through acquisitions. He specialized in smaller, middle market properties that deliver quality care in addition to providing quality Rehab/Medicare services. The owner decided to sell the portfolio to start the transition out of seniors housing. As part of the transaction, the Seller granted the Buyer the option to assume/purchase an additional 12 facilities (prior to 2020) that are currently leased from a public REIT. The Buyer is a Midwest owner/operator that purchased the portfolio using a 1031 exchange related to the sale of a portion of their existing portfolio. The Buyer will absorb the operations into their existing Midwest portfolio of nursing homes. For additional information, please contact Ryan Saul at ryansaul@slibinc.com or 630/858-2501.

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.

Ryan Saul Sells $23,000,000 Seniors Housing Communtiy in Illinois

Ryan Saul sold a 171 bed/unit seniors housing community in the south suburbs of Chicago. The 87,105 square foot community consisted of 37 Assisted Living/24 Memory Care and 110 Skilled Nursing Beds/Units on 11.78 acres. The SNF was built in 1989, ALF in 1999 and the MC in 2009. The skilled nursing portion had a 38% quality mix at the time of sale. The Seller purchased the community in 2009 as part of a portfolio of properties in Indiana, Kentucky and Illinois. The Seller had holdings in all of these states except Illinois. The intent was to look for other opportunities to grow in Illinois, but that strategy did not materialize. Because the Illinois community was an outlier, the decision was made to sell and deploy the capital to their core growth areas. The Buyer is a regional owner/operator with more than 50 properties in Illinois. The property sold at an 11.2% cap rate/2.0 GIM. Ryan was able to generate multiple offers in a very short marketing period while maintaining confidentiality throughout the process. For additional information, please contact Ryan Saul at ryansaul@slibinc.com or 630/858-2501.

Pennsylvania Personal Care Home Sold by Ryan Saul and Toby Siefert

Toby Siefert and Ryan Saul recently sold a 38 unit Personal Care Facility in Pennsylvania. The 28,277 square foot building built in 1965 consists of 38 units/60 beds on 11.4 acres. It is a well maintained community that was renovated in the late 1990's. The facility had a consistent track record of high census (98% at closing) and is 100% private pay even though the building has mostly semi-private rooms. Rents average $2,200/unit. The Seller was a regional seniors housing owner/operator that sold to focus on their 10 other/larger communities and to develop CCRC's. The Buyer was a Pennsylvania-based operator growing their portfolio. This was a strategic acquisition that fit well with their smaller, profitable communities. The property sold at a 1.3x GIM/11.6% capitalization rate. For more information, please contact Ryan at ryansaul@slibinc.com or Toby at siefert@slibinc.com 630/858-2501

Are you going to NIC?

In our industry, the annual NIC National Conference (www.nic.org) is the "go to" conference that everyone attends.  Whether you are an owner, lender, broker or just want to learn about the seniors housing space, it is a must attend.  I have been attending this conference for the last fourteen years and plan to do so again this year.  I can usually tell how our space is doing by the number of lenders attending.  After scanning the preliminary attendee list, it is obvious, based on the number of individuals attending from the various lenders and REITs, that the market is stronger than ever. 

 

If you have thought about selling, rather that speak to the REITs or owners direct, it would be a good idea to speak with Senior Living Investment Brokerage, Inc. to find out what your community is worth.  We have access to all the REITs and buyers with strong relationships with aggressive lenders.

Based on the number of capital providers attending NIC, contact Ryan Saul today to hear more about the market and to discuss the current value of your community.

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.

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

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

The Price is Right....well, hopefully

It is extremely important to position a community at the best, most realistic price during the first market exposure.  In the sales process, once a property has been exposed to the most active, qualified Buyers, activity dramatically decreases to the less active, less qualified "bargain" Buyers.

Drawbacks of an Overpriced Property

Many Sellers feel that an overpriced property can always be reduced if it doesn’t sell.  The danger with this approach is that by the time the property is finally reduced to its market value, it may have been on the market so long that Buyers perceive it to be a “tainted” property.  Buyers then question how long the property has been on the market and why it hasn’t sold.  Their offer to purchase, based on that knowledge, may be below its actual value.  Senior Living Investment Brokerage uses market research and our vast knowledge of the Seniors Housing market to arrive at an ask price that is both realistic and fair to the Seller but also attractive to Buyers.  This pricing process takes into account a number of key factors including property location and condition, upside, financial indicators and sales comparables, as well as current activity.  We present realistic pricing and do not attempt to “buy” our assignments.

We do not over-promise pricing expectations and our marketing proposals do not exceed what the property can support in the open market.  Over the past three years we have sold our offerings for 96% of our initial market valuation.

Contact Ryan Saul to learn more about what your community is worth and how to get top dollar in today's market.

Toby Siefert and Ryan Saul Complete Skilled Nursing Sale in Pennsylvania

Ryan Saul and Toby Siefert recently sold a 97 Bed Skilled Nursing Facility in Pennsylvania. The Seller was a regional not-for-profit that had engaged Genesis Healthcare to manage the community. The property had bond financing and the hold on the bond was achieved. It was a mutual decision by the owner and the bondholder to divest of the community. The property was not in a core market of the owner or manager. The Buyer was a regional owner with other seniors housing properties in Pennsylvania. The 24,000 square foot building was built in 1967 and 1972 on 0.69 acre. The census at the time of sale was 89.9% Senior Living Investment Brokerage was able to procure multiple offers for the Seller. For additional information, please contact Toby or Ryan at 630/858-2501.

What a buyer can do

I am often asked by buyers of nursing homes and assisted living communities what they can do in order to "get the deal."  Well, there are a lot of things that a buyer can do in order to grab a seller's attention.  A little work up front can go a long way when that perfect opportunity comes up.  Here are a few things you can do in order to better your chances to get the deal.

1. Prepare a bio with company history and facilities owned and operated.  What is your mission?  Sellers want to know your philosophy and who they are leaving their property to.
2. Have your equity lined up.  Ask your personal banker to provide a letter referencing your financial strength and ability to provide the equity required for a transaction. 
3. Have your debt lined up.  Obtain letters from two lenders speaking to their interest to provide financing for you.
4. Put together a professional letter of intent with your logo.  The letter of intent should clearly state the purchase price, earnest money deposit, due diligence period and closing period.
5. Have your due diligence list ready so that a seller can anticipate the type of information that they will need to put together for you.
6. It might sound simple, but don't breach confidentiality and abide by the process that the broker and seller have established.  Meet timelines and provide all information that is requested.

If you would like to learn more about buying or selling a nursing home or assisted living facility, please contact Ryan Saul at Senior Living Investment Brokerage, Inc. at ryansaul@slibinc.com or 630-858-2501.

Ryan Saul Completes Indiana Nursing Home Sale For Record Price

Ryan Saul sold an 128 Bed Skilled Nursing Facility in Fort Wayne, Indiana. The facility has a stellar reputation for quality care which was reflected in the purchase price of over $100,000/bed. Although originally built in the 1970.s, the Seller had continually invested capital and upgraded the building. It is arguably one of the best SNF's in Indiana. The Seller was an Assisted Living owner/operator that purchased the SNF because it was adjacent to one of his ALF's. The Seller had recently sold his Assisted Living portfolio so he elected to sell the SNF. The Buyer, based in Chicago, aligned with a regional to operate the facility. The operator manages several properties in Indiana and Illinois. The 37,000 square foot building on 4.3 acres was built in the 1970's. The census at the time of sale was 84% with an 80% quality mix. The community sold at a 14.13% capitalization rate/1.4 GIM. For additional information, please contact Ryan Saul at ryansaul@slibinc.com or 630/858-2501.

Ryan Saul Secures Buyer for Illinois Skilled Nursing/Independent Living Community

Ryan Saul has sold a 62 bed skilled nursing facility with 8 independent living units in the rural community of Walnut, Illinois. The facility, on 11.5 acres, has minimal staff turnover and great quality care. The skilled portion was built in 1977 and the independent portion of the building was built in 1998. This was a rare situation where the transaction was a stock sale. The Selling entity consisted of 26 stockholders from the local community. The buyer was currently managing the facility making them the best fit for a stock sale/purchase. For additional information, please contact Ryan Saul at ryansaul@slibinc.com or 630/858-2501.

What you can do to close faster

In case you didn't know already, we are in a Seller's market.  It is still important for Sellers to be organized and prepared for due diligence to ensure a faster close.  Utilizing a broker with experience and a well organized data room will save you time and money in the long run.  Here are just a few items that you can focus on in order to make due diligence easier on everyone:

1) Real Estate: Your building (physical plant) can often be the main focus of due diligence.  Before you start the sales process, make sure you have evidence of ownership entities and that you are zoned correctly.  Also, make a list of any Environmental issues that you are aware of and be prepared to correct these problems, if you haven't already.  The best thing that you can do is develop a plan in advance.  Make your own list of contractors in case you need them for things like roof, foundation, HVAC and Environmental.  Accompany the Buyer's professionals on the tours so that if the need comes up for you to get a second opinion, you can explain the issue to your contractors.

2) Personal Property: Make a list of inventory that is going to be excluded from the sale.  It is also a good idea to remove these items before going to market.  For instance, if there is art or a sculpture that has sentimental value, remove it so that a buyer doesn't think it is staying after the sale.  Also, look into your community name, entities, phone numbers, website/Email, etc. and find out what can be transferred and what notices are necessary.

3) Employee Matters:  Make sure that you run a report with all of your employees.  Know what your PTO liability is going to be and make a plan for how that is going to be paid out.  You might want to leave a credit for a buyer so that they can pay out employees.

4) Insurance/Litigation:  Contact your insurance agent and obtain a Loss Run report for the last five years.  Make a list of any outstanding litigation and potential liabilities that you are aware of that need to be identified in the Purchase and Sale Agreement. 

5) Surveys:  Put together state and federal health surveys and any POC for the last three years.  It is going to be important that you are in compliance and you are going to want to show a buyer you are in compliance and what you have done in order to stay in compliance.

6) Finances: Obtain a copy of your mortgage and note.  Make sure there is no lockout or prepayment penalty.  Contact your tax accountant and discuss your potential tax liabilities associated with a sale.  They might be able to give you advice on how to mitigate that liability on the front end as well.

For more information on how to sell your facility faster and at a top-of-the-market price, contact Ryan Saul at ryansaul@slibinc.com or 630-858-2501.

Medicare - What no one is talking about . . . yet

So, you have heard me preach about how strong the market is.  I have been on my soap box, jumping up and down, pleading with people to think about what their nursing home or Seniors Housing community is worth.  Now is the time to sell.   Change is coming.  I don't think it is the kind of change that drives pricing up.

1) We know that interest rates and the cost of capital are increasing.  This will inevitably lead to downward pressure on pricing.

2) Our favorite White House is now talking about accelerating Medicare cuts to skilled nursing facilities.  They are looking to cut healthcare spending by $400+ billion over the next 10 years.  In the budget, 2015 brings a 2.5% reduction.

My crystal ball, which is often cloudy, says that as we get closer to the implementation of these Medicare cuts, we may see a correction in pricing.  My advice is to take advantage of the current market.  A market that we are seeing record prices per bed/unit.

If you would like to know what your nursing home or Seniors Housing community is worth, please contact Ryan Saul at ryansaul@slibinc.com.

Blockbuster deal: Good or Bad?

Brookdale buys Emeritus.  It is in the headlines of every Seniors Housing magazine, website and blog.  As a broker, I think these deals are good for our business.  It highlights the fact that our industry is doing very well.  I also believe that they will examine their newly acquired portfolio and divest those assets that are not a good fit (geographic, age, financial performance).  This gives local and regional operators the opportunity to acquire value-add deals. 

I also believe these blockbuster deals help those that own communities think about selling and ponder the question of what their property is worth.  So what is your assisted living community or nursing home worth in today's market?  The only way to know is to allow us to put together a confidential proposal.  We all know the market is constantly changing.  For more information about what your community is worth, please contact me at Ryan Saul.

Brad Clousing and Ryan Saul Sell Georgia Personal Care/Memory Care Community

Ryan Saul and Brad Clousing sold a Personal Care and Memory Care community in Oakwood, Georgia. Oakwood is located in the northern portion of the Atlanta MSA. It was built in 1998 and underwent an extensive renovation and additional units were added at this time bringing the total square footage to 36,766. Census at the time of sale was 92%. The Buyer is an institutional owner/operator. It was a cash purchase with the intent of placing FNMA debt on the asset. The Seller was a local owner that used a third party manager. The purchase price was $11,750,000. For additional information please contact Ryan at ryansaul@slibinc.com or Brad at clousing@slibinc.com 630/961-2501

Indiana Record Price Per Bed

What a way to celebrate the New Year.  On New Year's Eve, Senior Living Investment Brokerage, Inc. set the record price per bed in Indiana.  I received a number of inquires about how/why the price per bed in Indiana went from $25,000 ten years ago to achieving over $100,000 today.  Here are a few of the reasons:

1) A full moratorium is in the works.  This is a simple supply and demand issue.  Once a full moratorium is in place, less supply of beds increases the value of each individual bed.

2)  Premier communities with a high quality mix (over 50%) achieve a premium.

3) The presence of IGT (Inter Governmental Transfers) / UPL (Upper Payment Limit) in Indiana has enhanced revenue and returns for many of the facilites, translating to more overall value.

4) Interest rates are still at historic lows.

We are seeing record setting prices across the country, not only in Indiana.  If you have thought about selling, please contact Ryan Saul to learn more about the value of your facility.

Ryan Saul Sells Another Indiana Skilled Nursing Facility

Ryan Saul has sold a 43 Bed Skilled Nursing Facility in Indiana. The 18,097 square foot property was built in 1960. This facility is unique in that it is one of only three facilities in the country that serves those afflicted with an advanced neurological disorder called Huntington's Disease. This is the only facility in the Midwest that focuses on residents with Huntington's disease and it attracts residents from throughout the Midwest and is supported by Huntington's Disease specialty doctors. The Seller is a non-profit organization based on the East Coast which is strategically divesting of the property to concentrate on their operations in the East. The Buyer is based in Indiana and will continue to cater to HD residents while at the same time improving expenses through economies of scale and will also be enrolled in the IGT (Inter Governmental Transfer) program which will positively impact the cash flow moving forward. At the time of the sale the facility had negative cash flow yet Ryan was able to secure multiple offers. For additional information, please contact Ryan at 630/858-2501 or ryansaul@slibinc.com

Clousing, Saul and Binder Sell Georgia Assisted Living/Memory Care Community

Brad Clousing, Ryan Saul and Jeff Binder teamed together to sell a 93 unit Assisted Living/Memory Care community in north central Georgia. The community consisted of 74 assisted living units and 19 memory care units on 15 acres. The community consists of 2 buildings, built in 2011 and 2012, an additional 20 unit expansion permitted and graded overlooking a private lake. The property leased up ahead of schedule and was fully stabilized by April of 2013. The Seller is a local developer of which this was their first seniors housing development. The Buyer is a national REIT and the asset will be operated by their affiliated operating company. Senior Living Investment Brokerage was able to procure a sale price of $236,833 per unit at a 7.5% capitalization rate.