Know the Lingo

If you are new to the industry, it won’t be long before you have a conversation that includes an unfamiliar acronym or abbreviation.  “Why does everybody keep saying Sniff?” (skilled nursing facility).  Here are some common acronyms that will help strengthen your vocabulary: 

GSEs: Government Sponsored Enterprises (such as Fannie Mae and Freddie Mac).   Established with the purpose of improving the efficiency of capital markets.

TPA: Transfer of Physical Assets- In reference to the application used for a property sales transaction involving the assumption of a HUD-insured loan.

ACOs: Accountable Care Organizations.  Providers such as hospital systems or physician groups take on responsibility for groups of patients.  Medicare and participating insurers will generally offer financial rewards for ACOs that save money and meet quality goals for these patients.

RUGs: Resource Utilization Groups. Nursing homes have a daily base rate of reimbursement that is adjusted based on the grouping of nursing or therapy service for each patient.

CHOW: Change of Ownership.  When you buy a facility, you will need to go through the CHOW process to get the approval of the State licensing department.  This process can vary from 30-365+ days depending on the state.

For other questions surrounding the sale of nursing homes or sale of assisted living facilities, please contact Toby Siefert at siefert@slibinc.com  or 630-858-2501 ext. 235

Matt Alley Closes Another Texas Transaction

Matthew Alley has sold a 120 bed skilled nursing facility in Texas.  The Seller was a local owner/operator.  Matt was able to utilize the Senior Living Investment Brokerage, Inc. database/network to procure numerous offers on the facility.  The Buyer is from the East Coast and this is their first facility in Texas.  Due to the confidential nature of this offering, additional information is not available publicly.  For additional information on this transaction, please contact Matt Alley at 630/858-2501 or alley@slibinc.com

Nick Cacciabando and JeffBinder Handle Oklahoma Transaction

Jeff Binder and Nick Cacciabando represented the Seller of a 60 bed skilled nursing facility in Marshall County, Oklahoma.  The facility, which was built in 1976, was owned and operated by a local family and has a great reputation in the southern Oklahoma community.   The Buyer is a regional owner/operator expanding their operations in Oklahoma.  They plan to improve on a number of operational inefficiencies.  Although the facility was only operating at 60% census, it was profitable and sold at a 15.1% capitalization rate.  For additional information, please contact Nick or Jeff at 314/961-0070.

Nick Cacciabando Represents Kansas SNF/RCF Seller

Nick Cacciabando has sold a 59 bed skilled nursing and 13 bed residential care facility in southwest Kansas.  The facility was owned by a local non-profit owner/operator.  The Buyer is an owner/operator based in Denver, Colorado, with an existing presence in southwest Kansas.  The facility's census was 74.7% and the operations had been running at a deficit for the past few years.  The one story building contains approximately 31,500 square feet and was originally constructed in 1963 with additions in 1988, 1995 and 2001.  For additional information please contact Nick Cacciabando at 314/961-0070 or nbando@slibinc.com 

Patrick Byrne Sells Missouri CCRC

Pat Byrne has sold a CCRC located in a suburb of Kansas City, Missouri.  The facility consists of 112 skilled nursing beds, 46 residential care beds (23 units) and 48 independent living units and was built in 1992.  This represents the seller's last senior housing asset.  Although the facility's profit margins had dropped in receent years despite a relatively consistent census, the Buyer looks forward to achieving profit margins experienced as recently as 3 years ago.  The Seller had also recently placed attractive, assumable HUD debt on the property.  The facility also benefited from a recently funded $6.00 PPD Medicaid rate increase and another rate increase is scheduled for the near future.  The Buyer is an Ohio based REIT which will be leasing the property to a Missouri based operator.  The purchase price was $13,500,000.  For additional information, please contact Patrick Byrne at 314/961-0070 or byrne@slibinc.com

REITs are here to stay.....For good!

REITs have been around for 50 years, but have most recently made their splash on the Seniors Housing industry.  The headlines have been dominated by the REITs making acquisitions.  A billion here, A billion there, a couple hundred million over there.  Traditional financing is having trouble competing with the rock bottom cost of capital of the REITs.  The REITs have their pick of the litter and have been buying high quality, cash flowing deals anywhere they can get their hands on them.  What happens when there aren't any portfolios left to purchase?  I believe we will start to see the REITs acquire high quality, individual assets to throw into the master leases of some of their existing portfolios. We are seeing capitalization rate compression and higher pricing simply from the blockbuster deals that the REITs are completing.

Senior Living Investment Brokerage has completed a number of deals with healthcare REITs.  We have relationships and access to all active REITs in Seniors Housing.  If you have thought about selling your nursing home, assisted living, independent living or CCRC, please contact me at Ryan Saul to talk about how we can access all of the REITs and maximize your return.

Government Regulation and its Effect on Sales

As we come towards the end of 2012, we begin to reflect on what sales trends we saw emerging in 2012 that may have been different or more pronounced than years prior.  As I cover sales of assisted living facilities and skilled nursing facilities throughout the Mid Atlantic and Northeastern states, one thing that came up over and over again this year was the effect of government regulation on both Sellers and Buyers.  Besides those looking to retire, the second most common reason individual owners told me they wanted to sell was that they just couldn’t handle the increasing regulation and oversight on their business.  In my territory, Sellers in Pennsylvania and Virginia seem to have been especially over-burdened.  This is a shame to hear, since the majority of owner/operators we work with have been in the business a long time, and have made a career of compassionate care for seniors.

Regardless of the election outcome, we expect that regulation over senior housing will continue to frustrate some owners to the point of selling, and require more patience on behalf of Buyers.  Each State has its own quirks, so if you have thought about buying or selling an assisted living facility or skilled nursing facility, we encourage you to contact Senior Living Investment Brokerage, Inc. to discuss our experience in each state, and the expected time frame and hoops to get from start to finish.

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