Senior Housing Investments & Transactions: Columbia Pacific Advisors

American Healthcare REIT III Completes $350 Million in Acquisitions in Q1

American Healthcare Investors and Griffin Capital Corporation, the co-sponsors of Griffin-American Healthcare REIT III, Inc., announced recently that the real estate investment trust (REIT) completed the acquisition of 18 health care properties in 11 states, as well as a collateralized debt instrument, for an aggregate purchase price of $353.7 million during the first quarter of 2015.

The acquisitions were comprised of 14 medical office buildings, three senior housing facilities, a surgical hospital and the aforementioned collateralized debt instrument.

“Griffin-American Healthcare REIT III remained very active on the acquisition front during the first quarter of the year, adding a diverse collection of health care properties to our rapidly growing portfolio,” said Danny Prosky, president, chief operating officer and one of the largest stockholders of the REIT. “In just six months’ time, we have grown from approximately $41 million worth of assets to more than $631 million with a robust pipeline of acquisitions on the horizon.”

Additionally, the REIT has announced that it has executed letters of intent and/or purchase and sale agreements to acquire 30 additional health care-related buildings for an aggregate purchase price of approximately $509 million. At least 14 of those assets are senior housing buildings, whose aggregate purchase price would total approximately $255 million if all of the acquisitions are completed, a spokesperson for the REIT told SHN.

These pending acquisitions are subject to customary closing conditions and the satisfaction of other requirements as detailed in the agreements.

Among the REIT’s completed senior housing acquisitions in the first quarter are:

• North Carolina Assisted Living Portfolio, North Raleigh and Mooresville, N.C.

Consisting of approximately 77,000 square feet of senior housing space and comprised of 192 licensed beds among 124 units, the North Raleigh and Mooresville buildings are the first two facilities acquired comprising the five-facility North Carolina Assisted Living Portfolio.

Located in North Raleigh and Mooresville, N.C., both buildings were built in 2013 and are operated by Carillon Assisted Living, LLC under a 15-year absolute net lease with two 10-year renewal options. Carillon provides assisted living and Alzheimer’s care services in North Carolina through 19 licensed facilities comprised of 1,888 beds and 1,162 units.

The North Carolina Assisted Living Portfolio was acquired from Carillon, an unaffiliated third party represented by Jason Ficken and Greg Throckmorton of Quadriga Partners.

• Springdale Assisted Living Facility, Springdale, Ark.

Springdale Assisted Living Facility is a one-story, approximately 51,000-square-foot senior housing facility comprised of 76 units in the city of Springdale in northwestern Arkansas.

The acquisition of Springdale completes the purchase of the three-building Delta Valley Assisted Living Portfolio. In September 2014, Griffin-American Healthcare REIT III closed on the acquisition of the other two components of the portfolio, located in Batesville and Cleveland, Miss.

The portfolio is 100% master leased to Providence Management LLC under a 15-year absolute net lease with two 10-year renewal options. Providence operates a portfolio of six purpose-built assisted living facilities located primarily in Mississippi.

Springdale Assisted Living Facility was acquired from Providence Management LLC, an unaffiliated third party represented by Dan Revie of Ziegler and Companies Inc.

Washington Skilled Nursing Facility Sells for $9.1 Million

The owners of Mira Vista Care Center have sold their 94-bed/48-unit skilled nursing facility for $97,074 per bed, according to an announcement made by Evans Senior Investments, a senior housing investment banking firm.

“With specialized rehab programs and an impressive physical layout complete with modern amenities, this facility represented an excellent chance for a buyer to grow in a very competitive state,” said Kristy Ortwein, exit strategy specialist for Evans Senior Investments, which facilitated the sale.

Built in 1987 and located north of Seattle in Mount Vernon, Wash., Mira Vista Care Center featured an above average quality mix census, but the NOI margin resided at only 13%. At the time of sale, the facility was 87% occupied.

“Because Mira Vista was the current owner’s only facility, the opportunity existed for a buyer with a portfolio of facilities to create economies of scale and further improve margins by folding Mira Vista into their existing portfolio,” Ortwein said.

Evans Senior Investments showcased the facility to a select group of buyers that had interest in the Northwest region, procuring numerous letters of intent from well-qualified buyers, including REITs, private equity firms and regional operators.

A national REIT in partnership with a regional family owner-operator emerged as the best and highest bidder for the facility, with a final purchase price of $9.125 million and a 12% capitalization rate.

The annualized July 2014 revenue was $8.1 million and the adjusted NOI for the facility was $1.1 million.

The Ensign Group Acquires Southern Utah Skilled Nursing Operation

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 it acquired Coral Desert Rehabilitation and Care, a 60-bed all-private/Medicare skilled nursing facility in St. George, Utah.

The acquisition of the operation and the commencement of a new long-term lease were effective as of April 1, 2015.

“Coral Desert is a great fit for our portfolio and we expect it to be a flagship operation in the growing health care market in Southern Utah,” said Christopher Christensen, Ensign’s president and CEO. “This acquisition is a perfect example of the effectiveness of our locally driven acquisition strategy.”

Coral Desert Rehabilitation and Care had an occupancy rate of approximately 68% at acquisition and is expected to be mildly accretive to earnings in 2015.

Ensign also announced that it acquired the underlying real estate of Panorama Gardens Nursing and Rehabilitation Center, a 149-bed skilled nursing facility in Panorama City, Calif., which has been operated by an Ensign subsidiary since September 2000 under a lease. The acquisition was effective as of April 1, 2015.

These acquisitions bring Ensign’s portfolio to 144 health care facilities, 19 of which are owned, 11 hospice agencies, 13 home health agencies, two home care businesses and 16 urgent care clinics across 12 states.  

Christensen noted in a written statement that Ensign continues to see a healthy pipeline for growth opportunities within its existing footprint and in new markets. He also indicated that the organization is actively seeking and negotiating several other transactions to acquire real estate and to lease both well-performing and struggling skilled nursing, assisted living and other health care-related businesses.

MedEquities Realty Trust Acquires California Senior Living Communities for $80 Million

MedEquities Realty Trust, Inc. has announced it has closed on the acquisition of four skilled nursing facilities and one assisted living facility for an aggregate purchase price of $80 million.

The company has an option to purchase an additional skilled nursing facility, which is expected to close in July 2015, for a closing price of $15 million. All six facilities are located in southern California markets.

MedEquities and various affiliates of Life Generations Healthcare have entered into a 15-year master lease pursuant to which MedEquities will lease the facilities to such affiliates. The master lease will be enhanced by a corporate guaranty by Life Generations.

Under the option agreement, Life Generations is entitled to additional purchase consideration of up to $10 million, with the amount contingent upon the achievement of certain performance thresholds relating to 2015 aggregate earnings before interest, taxes, depreciation, amortization, rent and management fees (EBITDARM) of the optioned property.

Greystone Real Estate Advisors Close Sale on Texas Seniors Housing Property

Greystone, a real estate lending, investment and advisory company, recently announced its Real Estate Advisors group has closed the sale of Aspens at Twin Creeks in Allen, Texas. Kayne Anderson Real Estate Advisors of Boca Raton, Fla., acquired the stabilized property from Cadence Capital Partners.

Built in 2011, Aspens at Twin Creeks includes 180 age-restricted units situated on more than 10 acres. Community amenities include a business center, library, movie theater, covered patio with outdoor dining, resort-style saltwater pool and spa, and exercise facilities.

“The Aspens at Twin Creeks is an age-restricted opportunity that will allow the buyer to potentially convert the property to a full-service independent living community,” said Cody Tremper, who is a managing director of Greystone Real Estate Advisors, and led the sale. “Available land adjacent to the property offers the potential future opportunity to add an assisted living building to create a continuum of care campus.”

Senior Housing Sale Furthers Columbia Pacific Advisors’ Strategy

Columbia Pacific Advisors, LLC, a Seattle-based alternative investment firm, announced recently it completed the sale of a senior care facility to South Bay Partners of Dallas, Texas. The sale marked the second exit for Columbia Pacific’s senior housing strategy.

The Kingwood, Texas, property, operated by Brookdale Senior Living, Inc. since February 2013, was developed in a joint-venture between Columbia Pacific and South Bay. Located northeast of Houston, Texas, the 117-bed development includes assisted living, memory care and skilled nursing facilities.

This transaction further reinforces Columbia Pacific’s strategy of investing in next generation senior housing facilities in communities experiencing healthy demand and outdated inventory.

“We are pleased with the results of our joint venture with South Bay,” said Todd Seneker, portfolio manager of Columbia Pacific’s senior housing and diversified real estate strategies. “We were successful in leveraging our proven development model to improve the facility’s cost structure and occupancy rates and, in turn, produce compelling returns for our limited partners.”

In December 2014, Columbia Pacific sold the only stand-alone memory care property in Peoria, Ill., to a national healthcare REIT. Columbia Pacific developed the facility with South Bay Partners to capitalize on the significant demographic strength of the market and lack of sufficient Alzheimer’s units. At the time of the transaction, the property had achieved 99% occupancy.

AdCare Completes Sublease Agreements for Six Facilities 

AdCare Health Systems, Inc., which is transitioning from an owner and operator of health care facilities to a health care property holding and leasing company, filed a form with the Securities and Exchange Commission that it has entered into certain sublease agreements, on varying dates, to which each sublessor will lease a respective skilled nursing facility of the company.

On April 1, 2015, sublease agreements for six facilities became effective. The six subleased facilities are as follows:

• College Park Healthcare Center, a 95-bed skilled nursing facility located in College Park, Ga.
• LaGrange Nursing and Rehabilitation Center, a 137-bed skilled nursing facility located in LaGrange, Ga.
• Powder Springs Nursing and Rehabilitation Center, a 208-bed skilled nursing facility located in Powder Springs, Ga.
• Tara at Thunderbolt Nursing and Rehabilitation Center, a 134-bed skilled nursing facility located in Thunderbolt, Ga.
• Georgetown Healthcare and Rehabilitation Center, a 84-bed skilled nursing facility located in Georgetown, S.C.
• Sumter Valley Nursing and Rehabilitation Center, a 96-bed skilled nursing facility located in Sumter, S.C.

Stroud Companies Announce 4-Property Sale Totaling Over $70 Million

Dallas-based Stroud Development and Stroud Investments have finalized the sale of four assisted living and memory care communities in the Houston, Odessa and Austin markets to ROC Seniors.

Each community serves 57 assisted living residents and includes a separate secured wing that serves 40 Alzheimer’s and/or dementia care residents.

The sale, valued at over $70 million, was financed using the HUD 232 debt program and has been a joint venture project with Orchard Park Senior Living. Development began in 2011 and was sold ahead of the original closing timeline.

The sale of these assets is in conjunction with the now open The Orchard at Katy development in the greater Houston market. When fully leased, the community will serve 97 residents in both assisted living and memory care.

Written by Emily Study