assisted living sale – Page 3

What is the optimum and/or minimum size for a Seniors Housing Community sale?

September 18, 2015/in assisted living, assisted living community, assisted living sale, Capitalization Rate, independent living, independent living facility, internal rate of return, Jason Punzel, prepare to sell assisted living, sell retirement community, sell seniors housing, what is my property worth/by ryanmsaul

When considering a sale, there is no minimum size for an assisted living facility (or independent living facility). Different room counts will attract different types of buyers. A REIT or large private equity company will not have an interest in a single, 16 unit assisted living facility. Likewise, a local nurse typically will not have the financial ability to buy a 100 unit assisted living facility.

As a company, we have found that most larger Buyers have a minimum threshold of 40 units for an assisted or independent living facility, with a preference of over 60 units. However, there are exceptions to every rule. If there are multiple smaller facilities (15-25) units on the same parcel, or nearby, often times larger Buyers are still interested. We have also had a lot of success selling smaller communities (25-30+ units) that are in favorable locations in larger cities, newer, and specialize in higher end private pay residents who prefer a smaller setting. Recently, we closed on a newer 25 unit assisted living community in the Portland area that sold for over $220,000/unit. It was 100% private pay with high occupancy and excellent quality finishes. Since there are so many variables that factor into a purchase decision by any Buyer, it is important to work with an expert in valuing and selling a senior living community to ensure the optimal pricing and terms.

For more information on what your senior living community could be worth, please contact Jason Punzel at [email protected] or 630-858-2501 x 233.

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When is the best time to list a seniors housing or nursing home community?

September 17, 2015/in Alzheimer, Alzheimer's, assisted living, assisted living community, assisted living price, assisted living sale, buy assisted living, buy nursing home, cap rate, Capitalization Rate, CCRC, closing costs, confidentiality, development, due diligence, exclusive listing, independent living, independent living facility, Lesley Arlasky, long term care, market, Matthew Alley, new construction, not-for-profit seniors housing, nursing home, nursing home price, operating margin, prepare to sell assisted living, prepare to sell nursing home, private equity, proposal, residential care facility, sales process, sell assisted living, sell CCRC, sell long term care, sell memory care, sell nursing home, sell portfolio, sell retirement community, sell seniors housing, sell skilled nursing, sell to REIT, senior housing, senior housing brokerage, Senior Housing community, senior housing sales, senior living, Senior Living Investment Brokerage, seniors housing, seniors housing brokerage, Skilled Nursing Facility, SLIB, Texas, valuation, what is my assisting living worth, what is my nursing home worth/by ryanmsaul

I’m often asked when is the best time of year to list a seniors housing or nursing home asset? We are all used to residential real estate agents telling us to list in the Spring while the weather is starting to change (at least for us Northerners).

Does it matter for seniors housing communities?

Yes and no. While there is not the seasonality in the seniors housing market as there is in the residential market, there are good and less optimal times for getting buyers’ (even institutional buyers’) attention.

I would argue that we are entering into one of those sweet spots as we get into the middle of September. Typically, Senior Living Investment Brokerage, Inc. has its highest volume of listings in September and early October.

Why is that?

During the Labor Day / beginning of October time frame, Buyers have made it through the Summer and are looking to deploy capital before the end of the year. They are hoping to make one last push to meet their aggressive beginning of the year expansion goals.

With a typical 3-4 month closing period, now is as good of a time as any to consider listing your property with Senior Living Investment Brokerage, Inc. We can help you procure the right Buyer, who can close the transaction prior to year-end. Many Buyers are looking to “get money out the door” by December 31st and this may give you an advantage in coercing those groups into making a more aggressive bid than they would in the middle of the year.

If you have any questions on the topic of this post or would like a confidential valuation of part or all of your seniors housing portfolio, please contact Matthew Alley at 630-858-2501 ext. 225 or [email protected].

The post When is the best time to list a seniors housing or nursing home community? appeared first on Senior Living Investment Brokerage.

How additional sources of funds are impacting the seniors housing market

June 12, 2015/in Alzheimer, Alzheimer's, assisted living, assisted living community, assisted living price, assisted living sale, buy, buy assisted living, buy nursing home, cap rate, Capitalization Rate, cash flow, CCRC, Dementia, financing, hud, independent living, independent living facility, interest rate, Lesley Arlasky, long term care, market, Matthew Alley, memory care, nursing home, nursing home price, prepare to sell assisted living, prepare to sell nursing home, private equity, proposal, sell, sell assisted living, sell CCRC, sell long term care, sell memory care, sell nursing home, sell portfolio, sell retirement community, sell seniors housing, sell skilled nursing, sell to REIT, senior housing, senior housing brokerage, Senior Housing community, senior housing sales, senior living, Senior Living Investment Brokerage, seniors housing, seniors housing brokerage, Skilled Nursing Facility, SLIB, Texas, valuation, what is my assisting living worth, what is my nursing home worth/by ryanmsaul

Over the past couple of years, we have seen capitalization rates (defined as Net Operating Income divided by Purchase Price) drop steadily to historically low levels, which in turn has led to purchase prices being driven upwards.

Now is the time to take advantage of this market and either exit the business through a sale entirely or divest of a few properties from your portfolio that do not fit with your current strategy.

Why is the market so strong right now? More so than any other factor, the market has been impacted by the increased availability of capital (both debt and equity) and the low cost nature of said capital. Interest rates are still at historically low levels, and while rates may creep up a bit, most analysts expect a measured increase.

During the Great Recession, transactions were mainly financed by three different methods: (1) all cash; (2) HUD financing; or (3) mostly public REIT financing. Community banks were only lending to their best clients on the most conservative of terms, and there were not a great deal of smaller, private REITs or private equity firms willing to support the acquisition of seniors housing facilities.

Over the past couple of years, community banks have become more aggressive as they are sitting on a large reserve of cash that they need to deploy and there has been a growth in the private REIT space. According to investment banking firm , Robert A. Stanger & Co., and reported by Seniors Housing Business, a handful of non-traded REITs devoted to seniors housing have amassed $6.4 billion in equity over the past few years. The availability of these capital sources has had a huge impact on the seniors housing acquisition market in the form of increased pricing.

The most recent example of this was a $30M nursing home portfolio that Senior Living completed in Texas. It was purchased by an independent, regional owner-operator and financed by a community bank out of Louisiana. Until recently, that size of transaction would have been almost certainly REIT financed or purchased by a large, national owner-operator.

If you have any questions on the topic of this post or would like a confidential valuation of part or all of your seniors housing portfolio, please contact Matthew Alley at 630-858-2501 ext. 225 or [email protected].

The post How additional sources of funds are impacting the seniors housing market appeared first on Senior Living Investment Brokerage.

Seniors Housing – Small buildings vs. Large buildings

June 11, 2015/in assisted living, assisted living community, assisted living sale, cap rate, Capitalization Rate, independent living facility, Jason Punzel, Senior Living Investment Brokerage, seniors housing/by ryanmsaul

As a company, Senior Living Investment Brokerage Inc, sells all types of senior living and long term care communities. One type of senior living community type we are seeing more of is the “pod” style of smaller buildings grouped together on a single parcel of land. Thus, instead of having one 80 unit facility, there might be five, sixteen unit facilities with one of the facilities being a bit larger where more of the community activities take place. There are some advantages and disadvantages to them. We find that often times residents like the feel of the smaller facilities because they feel more like a home and it is easy for them to get to know the other residents. From a marketing/occupancy standpoint, these types of facilities also seem to be attractive and often times enjoy very high occupancy.

The biggest disadvantage is staffing and efficiency. Depending on the state and acuity level, often times these smaller facilities require a staff person to be in each facility 24 hours a day. For only 12-16 residents, this can be very inefficient and costly. Also, while each facility usually has its own kitchen, it can be very inefficient to have a cook in each facility or to cook in one facility and have to transport to the other facilities. We often find that this type of community set up operates at an operating margin around 25% while a similar age/acuity level facility that has all of the residents under one roof might operate at a 32-35% margin. Thus, it limits that maximum amount of cash flow a community can create, decreasing its value. However, smaller facilities can be more attractive to residents and thus have great occupancy, some of the cash flow deficit may be eliminated. While we see more buyers prefer the larger facility communities, both styles can be very effective in delivering great resident care and producing profitable returns for the owner.

To have Senior Living Investment Brokerage, Inc. help you analyze the value of your senior living community, contact Jason Punzel at 630-858-2501 x 233 or [email protected].

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Ryan M Saul