Patrick Byrne and Bradley Clousing Sell Alabama Assisted Living and Skilled Nursing Community

Brad Clousing and Patrick Byrne recently sold a 125 bed skilled nursing facility and a 30 unit assisted living facility in Northwest Alabama. The property has been family owned and operated since it opened and was currently being operated by the owner's second generation. This is the only skilled nursing asset in the family's portfolio. The community was built in stages beginning in 1976 with additions in 1991, 1993 and 1998. A majority of the 74,140 square foot property(s) was renovated in 2013. The community is a CMS 5-Star rated facility with over 30% Medicare mix. In the Fall of 2013, the city experienced a Legionella event which impacted the nursing/assisted living facility. Management implemented a self imposed admissions ban affecting the census and expenses. Despite these challenges, Senior Living Investment Brokerage, Inc. was able to procure five qualified offers on the property in two weeks. The buyer is a New York based investment group and has entered into a lease with a national operator. The financing was provided by CapitalSource. For additional information, please contact Pat Byrne at byrne@slibinc.com or Brad Clousing at clousing@slibinc.com

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.

Matthew Alley Sells Another Texas SNF

Matt Alley has sold another Skilled Nursing Facility in Texas. The property consists of 199 licensed beds/165 usable beds. The facility was built in 1963 with an addition in 1973 and most recently remodeled/upgraded in 2011. The facility enjoys a strong census (84%) but is reliant upon Medicaid residents(80%). The single story building consists of 47,250 square feet and is located approximately 90 miles east of Houston. The property sold for a 13.3% capitalization rate/1.03 EGIM. The Seller was a regional owner/operator. The Buyer is an owner/operator from the Dallas/Ft. Worth area with several facilities throughout Texas. For more information, please contact Matthew Alley at alley@slibinc.com or 630/858-2501.

Patrick Byrne Sells Illinois Skilled Nursing Facility

Patrick Byrne sold a 75 bed skilled nursing facility in Coulterville, Illinois, a small town 50 miles east of St. Louis. The 28,606 square foot building was built in 1999 on 0.83 acres and sold for almost $60,000/bed. Originally developed by a non-profit organization, the property struggled financially. Sold to a for profit owner, they were able to stabilize the property, improve operations(91% census at the time of sale). Despite being profitable, Illinois' delay in Medicaid reimbursement and poor rates, led the owner to pursue a sale. Although the Medicaid rate is $101.09 and Illinois is approximately 6 months behind in reimbursement, Senior Living Investment Brokerage, Inc. was able to procure three strong offers within 10 days. The ultimate Buyer was a regional operator from Missouri. For additional information on this transaction, please contact Pat Byrne at 314/961-0070 or byrne@slibinc.com

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.

Matthew Alley Sells a Texas Skilled Nursing Facility.

Matt Alley has sold a 115 bed skilled nursing facility in East Texas. The multi story, 57,500 square foot building was originally constructed in 1919 and the census at the time of sale was 72%. The Seller is a national operator headquartered on the East Coast. The Buyer is an owner/operator located in Central Texas already operating several facilities throughout the state. The transaction was funded by a local community bank. For additional information, please contact Matt Alley at alley@slibinc.com or 630/858-2501

Jeff Binder and Toby Siefert Sell Portfolio in the Northeast

Toby Siefert and Jeff Binder have sold 7 Skilled Nursing Facilities in the Northeast. The portfolio consisted of over 750 beds and was in receivership. At the time of sale, the overall census was 91%. GIM of .58X and a capitalization rate of 10.5%. This was a confidential sale. For additional and/or detailed information, please contact Toby at 630/858-2501 siefert@slibinc.com or Jeff at 314/961-0070 binder@slibinc.com

How Closely are Cap Rates and Interest Rates Correlated?

A cap rate is calculated by dividing the net operating income of a property by the purchase price.   The cap rate would equal the rate of return on equity if a property was bought with all cash and the net operating income stayed the same for the next twelve months.    As cap rates increase, the purchase price decreases, and vice versa.  

The interest rate on a US Treasury Bond is considered the “risk free” rate of return, since US Government has never defaulted in the past, it is the World’s trade currency, and it has the ability through the Federal Reserve to print money to meet its obligations.   Therefore, many investments are analyzed by their spread over the US Treasury rate.   The riskier the asset, the larger the spread is over the US Treasury.  Over the past 10 years, skilled nursing cap rates have averaged about 1,000 basis points above the US 10 year treasury rate and assisted living cap rates have averaged about 600 basis points above the US 10 year treasury rate.   This is because skilled nursing is considered a riskier asset than assisted living.

This raises the question, is the risk “spread” over the US Treasury a constant or not?  Or, when interest rates change, do cap rates always change in exact correlation?   Although interest rates and cap rates are closely connected, there is not a 100% correlation. 

However, inherently, the risk premium over the “risk free” rate of a US Treasury Bond of any asset is going to vary based upon the demand of investors.   Additionally, the risk premium varies based upon future expectations of a given asset.  Seniors Housing assets still have a greater risk premium than traditional market rate apartments since the investment community considers it a more risky asset.  However, given the future demand for seniors housing, this risk premium may decrease, resulting in a lower cap rate, even if interest rates increase.  Thus, while interest rates do have a strong correlation with cap rates, there are many other factors that go into determining a cap rate, mostly importantly, the future risk that investors perceive in a given asset.

For more information about Senior Living asset values, please contact Jason Punzel, Senior Associate, at Senior Living Investment Brokerage, INC.  punzel@slibinc.com.

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

Jeff Binder Sells Missouri Skilled Nursing Facility

Jeff Binder was able to procure multiple offers on a 120 bed Skilled Nursing Facility that had struggled with census and had negative cash flow. The Seller is a national owner/operator that chose to exit the Missouri market. The Buyer is an Illinois-based owner/operator looking to add to their existing portfolio in the state of Missouri. Due to the confidentiality of this sale, please contact Jeff at binder@slibinc.com or 314/961-0070 for additional information on this transaction or on how he can assist with marketing your community.

Brad Clousing and Ryan Saul Procure a Buyer for Two Florida Skilled Nursing Facilities

Ryan Saul and Brad Clousing recently sold 2 Skilled Nursing Facilities in Northern Florida. Both facilities have solid reputations and have achieved at least a 40% Medicare mix since 2007. One facility is 60 beds and was developed by the Seller in 1999. The other property is 90 beds originally built as 60 beds in 1993 with a 30 bed Medicare addition in 2007. The dedicated Medicare wings at both locations contribute to the strong financial performance and high Medicare census. The Seller is a Florida based owner/operator. The Buyer is an investment group that leased the operations to a national provider. Senior Living Investment Brokerage sold the two properties for $139,000/bed. To find out how we can assist you in the sale of your seniors housing community, contact Ryan or Brad at 630/858-2501 or ryansaul@slibinc.com or Brad at clousing@slibinc.com

Ryan Saul Achieves Record Price for Illinois Skilled Nursing Facility

Ryan Saul has sold a 292 Bed Skilled Nursing Facility in Norridge/Chicago, Illinois. The 99,979 square foot building on 1.36 acres, sold for over $135,274/bed, a record for Illinois. The Seller is a regional owner/operator who plans on focusing his energies on his other skilled nursing facilities in the Chicagoland area. The Buyer is a Chicago based owner that aligned with a local operator to run the property day to day. The overall census at the time of sale was 89% (23% Medicare/13% Private Pay). The price reflected the reputation of the property coupled with the rare opportunity to acquire facilities on the north side of Chicago. The capitalization rate at the time of sale was 8.10% on approximately $24,000,0000 in revenues. Aside from the record price per bed, the transaction took 47 days from listing engagement to closing. For additional information on this transaction or how Ryan can assist you in buying or selling your seniors housing community, contact Ryan Saul at 630/858-2501 or ryansaul@slibinc.com

Nick Cacciabando Sells Colorado Skilled Nursing Facility

Nick Cacciabando was engaged to sell a Colorado Skilled Nursing Facility for a regional owner/operator. This was their only facility and the Seller intends on acquiring a property in their core market, Iowa, using a 1031 Exchange. It is an older building in a quality market in the Denver MSA. Because of the age, the Buyer was able to purchase the facility at a relatively low cost. The Buyer is a start-up owner/operator based in Colorado. The Buyer has identified numerous operating inefficiencies and opportunities within the market. The facility was profitable at the time of sale and sold for a 13.4% capitalization rate/0.8 EGIM. Nick was able to procure multiple offers from interested parties. For additional information, please contact Nick Cacciabando at 314/961-0070 or nbando@slibinc.com

Jeff Binder Handles Michigan Skilled Nursing Transaction

Jeff Binder has sold 2 Skilled Nursing Communities in Michigan. Both of the communities are located in Eastern Michigan. One of the buildings has 124 beds and was constructed in 1989. The two-story building has approximately 48,000 square feet on 1.89 acres. The other building was constructed in 1966 and renovated in 1985 and has 149 beds. The one-story building has approximately 58,000 square feet on 5.3 acres. Although the overall census for the two communities was only 66% at the time of the sale, Jeff was able to procure multiple offers with a final sales price of $8,000,000. The Seller, a national healthcare and senior living services provider, was seeking to divest these assets to utilize the capital for other corporate purposes. The Buyer is a regional owner/operator seeking to increase their operating presence in Michigan. For additional information, please contact Jeff Binder at 314/961-0070 or binder@slibinc.com

Matt Alley and Jeff Binder Sell Texas Skilled Nursing Facility

Jeff Binder and Matt Alley have sold an 80 bed Skilled Nursing Facility outside San Antonio. The facility was operated by a regional operator from San Antonio and owned by a trust. The facility has enjoyed a solid census with a favorable payor mix. It is a single story building built in the 1960's. The Buyer is a publicly traded REIT with other facilities in Texas and the new operator is out of San Antonio. Senior Living Investment Brokerage, Inc. was able to procure multiple, qualified offers for the trust. For additional information, please contact Matt at alley@slibinc.com or Jeff at binder@slibinc.com

Matt Alley and Ryan Saul Sell Texas Skilled Nursing Portfolio

Ryan Saul and Matthew Alley have sold 3 Skilled Nursing Facilities in Texas,  The facilities combined for a total of 337 beds.  They were operated by a regional operator based in San Antonio and owned by a trust.  The Buyer is a publicly traded owner/operator with other facilities in Texas.  The properties are older (one built in 1940 while the other two were built in the 1970's) and the new owner will invest in the communities and hope to increase cash flow by improving operating efficiencies.  There is also room for improvement in census at two of the facilities.  For additional information, please contact Matt or Ryan at 630/858-2501.

Skilled Nursing has great demand

Uncertain long-term reimbursement environment.  Legislation risk.  Obamacare extra employee cost.  Difficult surveyors trying to raise more revenue.  You would think skilled nursing would be tough to sell today.  Not the case.  There is a huge shortage of quality skilled nursing facilities for sale right now.  The skilled nursing properties we are fortunate to list today are receiving 6-12 qualified offers in the first couple of weeks with aggressive terms.

The low cost of capital combined with the fact that there will always be a need for the nursing home to take care of the frail elderly lead to huge demand for this product .

If you have thought about selling your nursing home (skilled nursing facility - SNF), please don't miss this opportunity to sell in what many consider to be the strongest market ever.

Contact Ryan Saul for a confidential proposal to find our what your facility is worth.

Matt Alley and Ryan Saul Sell 150 Bed Texas Skilled Nursing Facility

Ryan Saul and Matthew Alley sold a 150 Bed Skilled Nursing Facility in the Texas panhandle.  The facility was operated by a regional operator from San Antonio and owned by a trust.  The Buyer is a publicly traded owner/operator with other SNF's in Texas.  Originally built in 1963 and extensively remodeled in 2001, the facility has a strong census and a 12% quality mix.  The transaction closed at a .80x GIM.  Senior Living Investment Brokerage was able to filed several offers while maintaining confidentiality throughout the marketing process.  For additional information on this transaction, please contact Matt or Ryan at 630/858-2501.      

Bid deadline or no bid deadline? That is the question....

Since we represent approximately 30% of all announced seniors housing and nursing homes sold, we are often asked about timing and process as it relates to the sales process.  We don't believe in setting a bid deadline for a number of reasons.  

1) It often limits the amount of groups that will be interested.  Either they don't have the time to meet the deadline or they prioritize other deals that they can come to terms quickly with the Seller and move to the next step.

2) Buyers typically wait until days before a bid deadline to actually look at a deal and do any level of due diligence.  This leads to uneducated offers and little marketing feedback throughout the process.  Momentum and competition are a seller's best resource.

3) If a bid deadline is set when an offering goes to market and no offers come in, the offering is negatively impacted.  At that point, buyers know the asset has no interest and then look to purchase at distressed levels.

4) The first offer is typically the best offer.  Those buyers that drop everything to spend time on an opportunity should be rewarded with the opportunity.  It doesn't make sense to force a ready, willing and able buyer sit on the sidelines just waiting out a period of time before they submit an offer.

Buyers: Do you agree?  Do you like when there is a set bid deadline?  If you are one of the few that do, what do you think is the right amount of time to give to review the information?

Please contact Ryan Saul for a proposal to see what your assisted living, independent living, memory care or skilled nursing facility is worth.

Matt Alley Sells Another Texas Skilled Nursing Facility

Matthew Alley has sold an 110 bed skilled nursing facility in Western Texas.  The facility is in a rural area and is the only facility in the county.  The one-story, 33,600 square foot building was constructed in 1996.  At the time of sale, the census was 82% and the facility sold for a 12.5% capitalization rate.  The facility was operated by a regional operator out of the Dallas-Fort Worth area and owned by a publicly traded REIT.  The Buyer is an owner/operator from Central Texas with several facilities throughout the state.  The purchase was financed by a local community bank.  For additional information, please contact Matt Alley at 630/858-2501 or alley@slibinc.com