Senior Housing Investments & Transactions: NHI, LTC, Ziegler

NHI Acquires Ohio Assisted Living and Memory Care Community for $21 Million

National Health Investors (NYSE: NHI) announced on Aug. 3 that its NHI-Bickford Senior Living joint venture has acquired Fairfield Village, an assisted living and memory care community in Lancaster, Ohio, for $21 million in cash.

The 92-unit Fairfield Village was built in 2006 and was 95% occupied at the time of the acquisition. Unit mix is broken down into 69 assisted living units and 23 for memory care.

About 80% of the community is private pay and it generates approximately $3,900 revenue per unit per month. 

Friendship Village will be leased to the NHI-Bickford joint venture under terms structured to comply with RIDEA provisions and operations will be managed by Bickford. 

This acquisition expands the joint venture between the two companies to 32 communities in six states. 

The purchase was funded with borrowings on NHI’s revolving credit facility. Fairfield Village was valued at an 8% capitalization rate on its trailing net operating income performance. 

LTC Properties Purchases 10-Property Senior Living Portfolio for $142 Million

Following the release of its second quarter 2015 earnings, Westlake Village, Calif.-based REIT LTC Properties, Inc. (NYSE: LTC) announced that it entered into an agreement to purchase a 10-property portfolio totaling 891 units for an aggregate purchase price of $142 million. 

The portfolio, which includes independent living, assisted living and memory care, has nine properties located in Wisconsin and one located in Illinois. 

Upon closing, a triple-net master lease agreement entered into between LTC and an affiliate of Chicago-based operator Senior Lifestyle Corporation will become effective for a term of 15 years at an initial cash yield of 6.5%; escalating by 25 basis points upon each of the first and second anniversaries, and annually thereafter by 2.75%.

LTC anticipates a closing to occur during the third quarter of 2015, and expects to fund the acquisition utilizing its revolving credit facility as well as proceeds derived from the issuance of senior unsecured notes. 

Ziegler Completes Sale of Harmony Living Centers to The Ensign Group

Chicago-based specialty investment bank Ziegler recently announced the closing of the sale of leasehold interests and transfer of operations of Menomonee Falls, Wis.-based Harmony Senior Living to The Ensign Group.

The portfolio, which Ziegler notes as one of the largest in the state, included 20 assisted living communities on 15 campuses throughout Wisconsin.

Ziegler served as the exclusive advisor to Harmony in the sale and transfer of leasehold interest and operations to Ensign, working closely with the company’s senior management team to determine probable value; market the business to logical and qualified operators; navigate issues related to lender and landlord consents; and negotiate definitive agreements. 

In January 2007, Ziegler assisted Harmony in negotiating and completing a $100 million sale-leaseback transaction with Wakefield Capital, in which Harmony continued operating the portfolio but sold a substantial majority of its real estate holdings.

The communities are now part of a master lease structure with Ventas, Inc. (NYSE: VTR). As part of the transaction, Ensign assumed the long-term master lease, which includes an option to purchase all of the real estate. 

The acquisition was effective August 1, 2015.

Non-Profits Transfer Ownership of Calif. Assisted Living Facility

Two non-profit organizations, Glendale, Calif.-based be.group and the Glendale Chapter of the National Charity League, Inc., announced last week that they have agreed to transfer management and control of Twelve Oaks Lodge, a 4.5-acre assisted living facility in the neighboring Glendale-La Crescenta area.

Though terms of the transaction were not disclosed, the companies stated in a release that the deal is expected to close by August 14, 2015.

Twelve Oaks closed in 2013 because the wooded and hilly property was no longer appropriate for meeting the needs of its increasingly older and frailer population, said John Cochrane, president and CEO of be.group, in a prepared statement.

“The community could not be modified to meet be.group’s standards despite extensive efforts to do so,” Cochrane stated. “Prior to the closure, we assisted residents in relocating to other facilities, including several to other nearby be.group communities.”

Twelve Oaks will be managed by its owner, the Twelve Oaks Foundation, with assistance and guidance of the National Charity League, Inc., Glendale Chapter, which operated the facility until 2012.

Evans Senior Investments Arranges $7.75 Million Sale of Pa. Facility

Chicago-based Evans Senior Investments (ESI) facilitated the sale of Pocono Tranquil Gardens, a Pennsylvania-based senior living facility owned by doctors, for $6.75 million, or $112,318 per unit.

The community, which is licensed for 105 beds, offers 29 personal care units and 40 memory care units.  

Located in East Stroudsburg, Pa., Pocono Tranquil Gardens was in the midst of a financial turnaround at the time of its sale, ESI noted.

When purchased in 2012, the facility only had 12 residents. After remodeling the building’s third floor and building a reputation for care in the community, the owners brought the census up to 66 residents as of March 2015, with an occupancy of 95%. 

But after experiencing “operational fatigue” in managing the facility, the owners decided to sell, said ESI in a release. 

“Pocono Tranquil Gardens represented the opportunity to purchase a facility mid-turnaround,” said ESI Chief Executive Officer Jeremy Stroiman in a written statement. “The professional management skills of a national or regional operator could quickly stabilize the facility to 90%+ occupancy levels and generate a healthy IRR to an investor.”

In a competitive bidding process, a regional operator emerged as the winner—one that is comfortable with paying the pro-forma cash flows of the future performance of the facility and not the historical performance, ESI stated.

Point Communications Acquires Senior Living Marketing Firm Forte Group

The Point Group, a subsidiary of Point Communications, Inc., last week announced it will acquire Dallas-based Forte Group, Inc., a public relations, brand, marketing and digital communications agency exclusively serving the senior living industry.

As a result of the acquisition effective August 1, the company will create a new affiliate, Forte Senior Living Group, a division of The Point Group. 

“The addition of Forte expands our senior insights and rounds-out our acumen across consumer segments,” said Brenda Hurtado, president and cheif operating officer of The Point Group, in a prepared statement. “This enriched expertise will cross over our practice areas to benefit our existing clients in real estate and healthcare, among other areas, and paves the way for added business development opportunities.”

Forte has worked with more than 100 senior living communities across the country, serving clients across the industry spectrum from luxury residential, assisted living, inspired retirement living, memory care, nursing and in-home senior care, as well as home health providers, developers, hospitality and technology companies. 

Beth Wilbins, founder and CEO of Forte Group, Inc., will serve as president of the new entity Forte Senior Living Group.

“The Point Group is an exceptional firm and their robust marketing communications capabilities will enable the Forte team to bring to our clients more insights and opportunities from industries that intersect with senior living—specifically real estate, healthcare, technology and hospitality,” Wilbins said in a prepared statement. 

Written by Jason Oliva