Is Now a Good Time to Sell?

This is the question that I am asked most often in my conversations with owners and operators of senior housing communities.  The answer is never simple and depends on several factors.  What are some of these factors?

 

1. Is it a strong market?  The answer is a resounding yes.  There is more debt and equity to be placed now than in recent memory and not enough inventory on the market to keep up.  Simple supply and demand theory leads to higher pricing.  

2. How is my facility performing?  While that answer is different for every community, it is likely that as the summer is almost over and the fall is beginning, your community is operating at its peak levels for the year. 

3. When do I want to close?  Many potential sellers want to sell before the beginning of a new year in order to reduce partial year paperwork, i.e. cost report, prorations, capital gains tax treatment.  It typically takes 3-4 months to close, so if you want to close by year end, now is an ideal time to list your facility.

4. Is the cost of capital low?  When the cost of debt (interest rates) and equity (internal rates of return) is low, buyers can afford to pay a higher price for obvious reasons.  Interest rates are near historical lows and with the economy improving, there is risk in those rates increasing.  Equity internal rates of return are also very competitive right now.  All of this leads to low costs of funds for buyers and lower cap rates for sellers!

Although I don't have a crystal ball, there may never be a better time to consider a sale of your long-term care or senior housing community.  For a complete analysis of what your community is worth, contact Matthew Alley – alley@slibinc.com or (630) 858-2501

Matt Alley and Jeff Binder Handle Texas Memory Care Facility Sale

Jeff Binder and Matt Alley recently sold a 36 unit/48 bed Texas Memory Care Facility approximately 65 miles northwest of San Antonio. Built in 1997, the property is approximately 25,000 square feet and is situated on 2.5 acres of land. The community was underperforming due in part to recent turnover in staff. The census at the time of sale was 56%. The Buyer expects to be able to take advantage of increasing the marketing budget and stabilizing the staffing. The Seller is a national REIT divesting non-performing assets. The Buyer is a regional owner/operator based in Texas. For additional information, Please contact Matt Alley at alley@slibinc.com or Jeff Binder at binder@slibinc.com

Brad Clousing and Matt Alley Represent Seller of Alabama ALF/MC Community

Matt Alley and Brad Clousing sold a 27 unit Assisted Living/15 unit Memory Care (SCALF) Community in Jacksonville, Alabama. The building is approximately 26,500 square feet on approximately 4.6 acres and was built in 2009. The site offers an expansion opportunity and the Seller has an active CON for an additional 9 SCALF beds that are not being utilized. The Buyer intends on expanding the building with a new separate secured memory unit and potentially adding cottages to the site. The Seller is a local partnership that is exiting the industry. The Buyer is a regional owner/operator and this is their first acquisition in Alabama. The asset was at 79% occupancy at the time of sale and sold for a 7.3% capitalization rate. For additional information, please contact Brad at clousing@slibinc.com or Matt at alley@slibinc.com 630/858-2501

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

Sell now - No regrets.....none

The market continues to face a shortage of quality seniors housing and long-term care communities available for purchase.  There is significant demand.  Both regional and national companies are looking for growth opportunities....especially with the end of the year quickly approaching.

I am sure you are enjoying your current cash flow and ROI.  Maybe you haven't even thought about selling.  Why?  If you could cash in at the top of the market, why wouldn't you at least explore the idea?  You don't want to look back 3-5 years from now and regret not selling.  Do you know what your nursing home, assisted living, independent living or memory care facility is worth today?  Let me help you find out.

Everyone knows that interest rates are going to increase.  This will inevitably decrease the value of your facility.  Things are great now, but we all know things change.  Why not take advantage of just how great the market is?

I am always available for a confidential proposal to determine what your community is worth.  Please contact Ryan Saul for more information.