Senior Housing Investments & Acquisitions: Ensign Group, Sabra, American Realty Capital

Ensign Group Acquires Ariz. Senior Care Center for $9M

The Ensign Group, Inc. (Nasdaq:ENSG), the parent company of the Ensign group of skilled nursing, rehabilitative care services, home health care, hospice care, assisted living and urgent care companies, announced recently the acquisition of the Horizon Post-Acute and Rehabilitation Center, a 196-bed skilled nursing facility in Glendale, Arizona.

“This acquisition broadens Ensign’s existing operational base to the vibrant and well-regarded Glendale healthcare community,” said Christopher Christensen, Ensign’s President and Chief Executive Officer. “The combination of this facility along with Ensign’s existing operations in the greater Phoenix area strengthens our ability to exceed the clinical, emotional and social needs of patients and families we serve in Arizona.” 

The $9.1 million acquisition was effective Saturday, March 1, 2014. Evans Senior Investments represented the seller, an owner who along with operator Life Care Centers of America, had been frustrated about the facility’s performance. 

“We are excited to work side-by-side with each member of this outstanding team of caregivers, each of whom have put their hearts and souls into this building, to enhance the quality of skilled nursing care services provided to present and future residents and their families,” said John Albrechtsen, President of Bandera, Ensign’s Arizona-based portfolio subsidiary.

The resident and community response to Ensign’s acquisition of the facility has been “overwhelmingly positive,” according to Albrechtsen,  who said he expects the facility, which had an occupancy rate of approximately 45% at acquisition, to be mildly accretive to earnings in 2014.

Ensign purchased the facility with cash and the real estate it acquired in this acquisition will not be included in the previously-disclosed plan to separate Ensign’s real estate business from its healthcare operations. 

This acquisition brings Ensign’s growing portfolio to 120 healthcare facilities, seven hospice companies, nine home health agencies and nine urgent care clinics across 11 states. 

Texas Assisted Living Community Sells for $4.8 Million

Ashwood Assisted Living, an assisted living community in North Richland Hills, Texas, recently sold for $4.75 million in a transaction where Evans Senior Investment represented the seller, a local real estate company specializing in shopping centers and traditional real estate asset classes.

At time of sale, Ashwood’s occupancy was 78%, of which 56% was private pay, and the remainder federally reimbursed. The community, built in 2000, has 115 beds in 87 units. 

The sellers tried for years to maximize the community’s profitability, but finally realized that they were not suited for the senior housing industry, says ESI. A private equity company based in New York saw “tremendous upside” in the property, considering a Brookdale community across the street was full with a waiting list. 

Simultaneous with the acquisition, the buyer entered a triple-net lease with a Texas nursing home operator. 

Integral Senior Living Adds New Community to Management Portfolio

Integral Senior Living, a third-party senior living community management company, recently announced a new addition to its portfolio of managed properties. ISL has been chosen by Focus Healthcare Partners to manage its newly acquired community, The Montecito, an independent and assisted living community located in Peoria, Arizona. 

The Montecito provides an active, spacious, and comfortable resort-style living environment for residents. Designed and landscaped with desert flowers and water features, The Montecito has 195 rental apartments, Casitas and Villas for the independent residents, while assisted living residents reside in the main building. An additional memory care unit will be added to the building to allow a full range of offerings to the Peoria community by way of independent living, assisted living and memory care.

American Realty Capital Buys Fla. Assisted Living Community for $26.6 Million

Lexington Park, an assisted living and memory care community in Lady Lake, Fla., recently sold for $26.6 million in a transaction facilitated by Senior Living Investment Brokerage, Inc.

American Realty Capital purchased the community, which has 69 assisted living and 20 memory care units and is located adjacent to The Villages. The transaction also includes an adjoining parcel of land that could be developed into 59 more units. 

Concordis Senior Living is retaining operation of the community, formerly owned by a local partnership. Bradley Clousing of Senior Living Investment Brokerage handled the transaction. 

Sabra Exercises Options to Purchase Two SNFs for $24.5 Million

Sabra Health Care REIT, Inc. (NASDAQ: SBRA), announced it has exercised its options and completed the acquisition of two skilled nursing facilities in Colordado Springs, Colo. and Fort Pierce, Florida, for $24.5 million. 

The communities comprise a total of 254 licensed beds. 

Sabra’s option to purchase the properties was obtained i connection with a $12.4 million mezzanine loan Sabra originated in June 2013 with an affiliate of Chai Facilities Acquisition Company, Sabra said. Chai is the indirect owner of 12 skilled nursing facilities in seven states. The Chai mezzanine loan is secured by the borrower’s equity interests in the entities that own the Chai Portfolio; under which Sabra received an option to purchase up to $50.0 million of these facilities.

Of the sales proceeds, $5.8 million were used to repay a portion of the mezzanine loan, which resulting in Sabra funding an additional $18.7 million for the acquisition and leaving $6.6 outstanding under the loan. Sabra maintains the option to purchase up to an additional $25.5 million of the remaining portfolio. 

Sabra also entered into a triple-net master lease with affiliates of the seller, concurrently with the purchase. The initial terms of the lease are 15 years with two 5-year renewal options and an annual rent escalator equal to the greater of the change in the Consumer Price Index or 2.75%, resulting in annual lease revenues, determined in accordance with GAAP, of $2.8 million and an initial yield on cash rent of 9.5%.