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.

Portfolio Sales

Pricing Premiums for Portfolios vs. Single Asset Sales

As a company, we value many senior living and skilled nursing facilities both as portfolios and single asset sales.  Often times we get asked the question if there is a premium to sell a portfolio of facilities instead of an individual facility.  In general, the answer is “yes”.  However, it depends on the size of the single asset vs. the size of the portfolio, the location of the portfolio and the make-up of the portfolio. 

In general, portfolios are more attractive to buyers if they are in the same general geographic location, are similar in size and quality and are either mostly seniors housing or mostly skilled nursing.  A portfolio is easier to manage and will fit the acquisition criteria of a buyer better when it is more homogeneous.

When comparing prices of an individual asset vs. similar assets that are in a portfolio of multiple assets we typically see a premium of 5-15% for the portfolio.  A portfolio allows a buyer to deploy more capital at once, achieve greater economies of scale, makes it easier to enter a new geographic location, and often allows for more attractive financing terms. 

Whether you own one community or several, the first step in determining value is to engage an experience professional to assist in the valuation and analysis of your property/properties.  Let us know if you would like a no-obligation market analysis.  

Jeffrey Binder and Bradley Clousing Sell $30,750,000 ALF/ILF Portfolio

Brad Clousing and Jeff Binder sold a portfolio of 3 Assisted Living and Independent Living facilities located in central Illinois. The three facilities are located within 90 miles of each other and are easily accessible to major highways. The facilities had a total of 183 units with a census of 96%. The facilities were constructed between 2007 and 2009. The Seller is a national owner/operator of seniors housing who divested of these assets to utilize the capital for other projects. The Seller's affiliated operating company will remain in place via a third-party management agreement. For additional information, please contact Jeff Binder at binder@slibinc.com or Brad Clousing at clousing@slibinc.com

George Pappas Sells 4 Facilities in South Dakota

George Pappas has sold a portfolio of four Assisted Living Facilities in South Dakota. Built between 1999 and 2003, the four facilities total 104 units/130 beds. At the time of sale, the overall occupancy was 85%. The Seller is looking to exit the seniors housing market. The Buyer is a regional operator looking for immediate savings with many of the larger cost centers. For additional information, please contact George at 630/858-2501 or pappas@seniorlivingbrokerage.com

M & A Frenzy

We can't keep inventory on our books. There is very little product available to purchase and a flurry of blockbuster deals announced monthly.

What is driving the surge in M & A activity?

1) Low interest rates
2) Sellers taking advantage of current capital gains tax rates
3) Real Estate is a prudent hedge against inflation
4) Large companies need to make more acquisitions to gain market share
5) Seniors Housing REIT stocks outperforming the market and are high yield

What's next? What are your predictions?

If you have thought about selling, please contact me for a confidential proposal to determine value in this ever-changing market.

Ryan Saul
Managing Director
630-858-2501
Email: Ryan Saul