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

Brad Clousing and Jeff Binder Sell Two Residential Care Communities in Arkansas

Jeff Binder and Brad Clousing were selected to assist in the disposition of 2 Residential Care Facilities in Arkansas. Located approximately 85 miles from each other in the northern region of the state, the two communities offer a combined total of 102 units. Both buildings were constructed in 1997 and each consist of 51 units (45 private and 3 semi-private). Each building is on approximately 4.5 acres. At the time of the sale, the combined census had stabilized at 62%. The Seller was two separate but related entities. The Buyer is a regional owner/operator based in Missouri. They plan on increasing the license to Level II which will provide for additional reimbursement and census enhancement opportunities. For additional information, please contact Brad Clousing at clousing@slibinc.com or Jeff Binder at binder@slibinc.com

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.

Nick Cacciabando Sells Kansas Retirement Community

Nick Cacciabando has sold a 54 bed Skilled Nursing Facility and 40 unit Residential Care Facility. Census at the time of sale was 94.7% and the capitalization rate was 9.9%. The communities were family owned and operated by a local owner/operator. These were the Seller's only remaining long term care/seniors housing communities as they are retiring from the business. The Buyer is a regional owner/operator with numerous properties and their headquarters are nearby. This was a strategic acquisition as they have a significant presence in Kansas and are hoping to realize operational efficiencies through economies of scale. For additional information, please contact Nick at nbando@slibinc.com or 314/961-0070.

Brad Clousing and Jeff Binder Sell Two Georgia Personal Care Homes

This transaction consisted of 2 personal care homes located approximately 40 miles from each other. The first community is comprised of 94 personal care units, 22 of which are memory care units, and it is licensed for 105 beds. The building was originally constructed in 1997 but underwent renovations in 2001, 2006 and 2008. The 48,905 square foot building offers a variety of unit options and amenities. The second community is a personal care home that features 59 units and is licensed for 70 beds. The building was constructed in 2008 and is 43,201 square feet. This community also offers a variety of unit options and common area amenities. It also benefits from limited competition in the area. The Seller is a local owner/operator that developed both of the assets. The Buying entity is a partnership between a publicly traded REIT and their affiliated national operator. Both facilities were trending towards 90-95% occupancy at the time of closing. The sales price was $19,000,000 ($124,837/unit) which was an 8.0% capitalization rate. For additional information please contact Jeff Binder at binder@slibinc.com 314/961-0070 or Brad Clousing at clousing@slibinc.com 630/858-2501.

Retrades Defined (and what it means for you):

Retrades have become a relatively common occurrence in seniors housing M&A.  For those readers who are fortunate enough to have not experienced this, a retrade is renegotiating the agreed upon purchase price - oftentimes at the point after the buyer has completed due diligence and earnest money is about to become non-refundable.  Retrades are often linked to some unexpected decline in census or performance, or findings in the physical plant which will require major expense.  These retrades are much easier to negotiate than the times a buyer asks for a reduced price and it appears that they didn’t do their homework on the front end, or never planned on following through on their offer price which secured the deal.

There are two hurdles that retrades create: 

1. Seller’s Sales Expectations: If we are under contract on a facility for $12 million and before closing the buyer asks for a retrade down to $10.5 million and the deal falls apart, the Seller will never forget that at one time their facility was “worth” $12 million, even if all the other market feedback was $10-10.5 million.  The original buyer set an unrealistic sales expectation that can be very difficult to duplicate.

2. Wasted Time:  When a buyer retrades to a lower price, oftentimes our firm already had multiple offers in that lower range, only now we may be closing in on year-end or other deadlines and/or both sides have a significant investment into the deal.  

What does this mean for Sellers?  One benefit of working with Senior Living Investment Brokerage is to utilize our knowledge of who closes deals at or near the original terms and who “ties” deals up.  However, too many times the reason we have to deal with a retrade is because the seller “took their hands off the wheel” once the deal was under contract.  A Seller needs to run the community as if they weren’t selling- right up until the day of closing.

What does this mean for Buyers?  We have already experienced clients who request that potential buyers put up non-refundable earnest money at the time of signing the LOI.  That doesn’t fly in today’s market, but we can see things moving that direction, even if only a “token” amount is non-refundable.  As more and more buyers enter the market, sellers are looking for ways to differentiate between Lookers and Closers.  

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

Patrick Byrne and Jeff Binder Sell Central Illinois Assisted Living Community

Jeff Binder and Patrick Byrne facilitated the sale of a 37 unit Assisted Living Community in Central Illinois for over $140,000/unit. The facility was developed by a group of local investors to service the local seniors housing residents. After years of stable operations, the facility experienced a downturn in 2011-2012 and a decision was made by the partners to sell. The Buyer was American Realty Capital which retained Good Neighbor Care as the operator. The census at the time of sale was 92%. The 37,000 square foot building was built in 2005. For additional information, please contact Pat Byrne or Jeff Binder at 314/961-0070.

Matthew Alley and Jeff Binder Sell Two Idaho Assisted Living Communities

Jeff Binder and Matt Alley sold two Assisted Living Communities in Northern Idaho located approximately 30 miles from each other. The properties totaled 90 units and are newer (2005/2006), purpose built facilities aligned in a pod format on attractively landscaped sites. A Receiver was appointed for the properties in July 2012. There were two major challenges regarding the census once the Receiver was appointed: 1. "No further placement" order until September 2012, 2. The buildings did not meet bathroom/resident ratio. Significant capital was invested to bring the properties to code. The 2006 site is four 15 unit one and two story buildings on 1.43 acres totaling 34,700 square feet. The 2005 site is two 15 unit one and two story buildings on 0.82 acres totaling 18,300 square feet. At the time of sale, the census had risen to 71%. The Buyer is a national owner/operator looking to expand their presence in Idaho. The properties sold for close to $80,000/unit. For additional information, please contact Matt Alley at alley@slibinc.com or Jeff Binder at binder@slibinc.com

Senior Living Investment Brokerage, Inc. Sells Oregon Assisted Living Facility

Senior Living Investment Brokerage, Inc. facilitated the sale of a 32 unit/38 bed assisted living facility in eastern Oregon. The Seller is a local owner/operator that originally developed the building in 1995. They are retiring from the business. The Buyer is a regional operator out of Idaho looking to expand their presence in the region. The census at the time of sale was 97% and the ultimate sales price of $2,700,000 ($84,375/unit) for a 11.3% capitalization rate. The Buyer also has an option on an adjacent 5.7 acre parcel of land with the intention of developing a secure memory care facility. For additional information, please contact Senior Living at 630/858-2501 or 314/961-0070 www.slibinc.com

Patrick Burke Handles North Carolina Sale

Pat Burke has sold a 21 unit/42 bed Adult Care Home in North Carolina. The 14,000 square foot building is on 13 acres. The Sellers had plans to develop independent living on the site as well. The census was 88% at the time of sale and had a quality mix of 50% private pay and 50% Medicaid. The Buyer of the community is a local non-profit that owns and operates more than a dozen assisted living facilities in North Carolina. The new owner plans on upgrading the building and possibly adding independent living. The sales price was over $75,000/unit. For additional information, please contact Patrick Burke at 630/858-2501 or burke@slibinc.com

What to do about Alzheimer's?

Most development I have seen across the country has been for residents with Alzheimer's.  Will it be enough?  If you know anyone that has Alzheimer's, it is a terrible disease.  As the US population ages and grows, the number diagnosed is expected to triple by 2050.  They are predicting close to 14 million people will be affected by the disease.  This is millions more that previously anticipated.

This is going to be a huge challenge for our society and will challenge caregivers, facilities and personal financial safety nets.

Owners and operators of Seniors Housing should be preparing now for the tidal wave of those affected with Alzheimer's disease.  Repositioning assisted living and independent living facilities is an ideal way to serve these residents.

If you have thought about buying or selling a memory care, Alzheimer's, or assisted living facility, please contact Ryan Saul.

Jeff Binder, Matt Alley and Toby Siefert Team Up to Sell New Mexico Assisted Living/Memory Care Community

Senior Living Investment Brokerage, Inc. was engaged to sell a 69 unit Assisted Living and Memory Care community in New Mexico.  The building consists of 54 assisted living units and 15 memory care units.  Originally constructed in 1964 as a hotel, the building was converted in 1990 to seniors housing.  The building was subsequently renovated in 2002 and again in 2010.  The one and three story building is comprised of approximately 63,500 square feet on 2.4 acres.  The community has a strong operating history and an excellent reputation in the market.  At the time of sale, the census was 87%.  The Seller is a national owner/operator based in Oregon who was divesting this asset to utilize the capital for other corporate purposes.  The Buyer is a regional owner/operator based on the east coast.  For additional information, please contact Toby Siefert or Matthew Alley at 630/858-2501 or Jeff Binder at 314/961-0070.  www.slibinc.com

Brad Clousing Facilitates Florida Assisted Living Sale

Brad Clousing sold a 129 unit Assisted Living Community in St. Petersburg, Florida.  The building was originally built as a hotel in 1971.  In 1995 it was renovated and converted to an assisted living facility.  It was again substantially renovated in 2005.  The facility was unable to survive the high leverage placed on it in 2007 and was foreclosed on by the syndicate of lenders.  The facility has been closed but the new owners plan on upgrading the building.  Because of the large resident rooms, good condition and favorable location, the project will re-open as an ALF.  The Buyer is a regional owner/operator of assisted living and has had success with hotel conversions to seniors housing.  They plan on investing significant capital to upgrade and rebrand the facility.  The demand within the primary market area is very strong and the facility will serve a needed niche.  Once it opens, the facility will compete well with other communities in the market and it is anticipated the asset will reach stabilization within 3 years.  For additional information, please contact Brad Clousing at 630/858-2501 or clousing@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

Ring in the New Year

Now that the excitement of year end closings is over and we have turned the calendar to 2013, it is time to start thinking about what's next.  Buyer demand continues to outpace supply.  The Senior Living Investment Brokerage team has been inundated with proposals over the past two weeks.  This is great news for the market as we expect new inventory to become available over the next couple of months.

If you have thought about selling your Seniors Housing or Long-Term Facility, now is an ideal time to take advantage of record pricing and strong buyer demand.  Buyers are constantly calling looking for properties to acquire.  Please contact Ryan Saul for a confidential proposal to determine the market value for your asset. 

Matthew Alley and Patrick Burke Sell 2 Texas Assisted Living Facilities

Pat Burke and Matt Alley have sold a 38 unit ALF (licensed for 60) and a 30 unit ALF (also licensed for 60) in Southeastern Texas. Located next to each other, one of the facilities focused on Alzheimer care.  The Seller is a local independent owner/operator.  The Buyer is headquartered on the East Coast and owns several facilities in Texas.  The facilities sold for $6.750,000 ($99,250/unit).  The census at the time of sale was 77% and the transaction sold at a 10.3% cap rate.  The new owner expects to take advantage of increased marketing and expense management to further improve the financial performance.  For additional information, please contact Matt Alley or Patrick Burke at 630/858-2501.

Ryan Saul, Toby Siefert and Patrick Burke Sell Pennsylvania ILF/ALF

Toby Siefert, Ryan Saul and Patrick Burke sold a 94 unit/120 bed Independent Living and Assisted Living facility in Pennsylvania. Originally built in 1927, the facility was extensively renovated in 1998 and converted to ILF/ALF. Even though the facility is licensed for 120 beds, it is configured with nearly all private rooms resulting in a census upon sale of 42%.
In 2010, The Pennsylvania Department of Public Welfare placed a ban on admissions as well as increased staffing requirements at the facility citing care related issues. The property lost almost $1,000,000 annually in 2010 and 2011. The Seller, a group of TIC investors, hired an experienced management company to address the issues. The new management company was able to remove the ban on admissions and begin focusing on repairing the image of the facility and turn around the facility in terms of profitability. Although the facility was losing ($500,000) annualy at the time of sale, Senior Living Investment Brokerage was able to work with the Seller to obtain a price of $5,800,000 or $61,700/unit. 3.67 GIM.
For additional information, please contact Toby, Ryan or Pat at 630/858-2501.

Housing Improving?

It is exciting to see the economy improve. It has been a stressful couple of years. Thankfully, the long-term care and seniors housing market has remained resilient during this time. I believe that when we see housing improve and unemployment under control, the economy is going to take off. What is making the difference? The credit market is loosening. Borrowers are able to obtain lending and interest rates are at all time lows. As people keep their head above water by taking advantage of low interest rates and gain meaningful employment, consumer confidence will take off.

What does this mean for long-term care and seniors housing owners? All of those potential residents that have been holding off moving in for as long as they can will start to gain confidence in their wealth and take advantage of care that is at their disposal.

If you are thinking of buying a nursing home, assisted living facility or independent living facility, take advantage of the low cost of capital. If you have thought about selling, now would be a great time while demand is surpassing supply.

Please contact me at ryansaul@slibinc.com to learn more about what we have for sale or to talk about selling in today's market.

Take advantage of the GAP

Sellers - Because of the low cost of capital there is significant downward pressure on capitalization rates. The gap between interest rates and capitalization rates is meaningful right now. What does that mean for you? If you have thought about selling your facility or a portfolio, now would be an ideal time. We are achieving top-of-the-market pricing right now. Take advantage of the current market and lack of inventory available.

Buyers - Act now. I don't know when we will see cost of capital this low again! As the economy continues to improve, occupancy and returns in Seniors Housing are continuing to improve as well. With the current interest rates, Real Estate and Seniors Housing is best option for investment and growth.

To discuss buying and selling in today's market, please Email me at ryansaul@slibinc.com or call 630-858-2501.