Senior Housing Investments & Transactions: Mainstreet Completes Reverse Takeover

IPA Closes Record Sale of 33 SNFs in Texas

Institutional Property Advisors (IPA), a division of Marcus & Millichap that specializes in serving institutional and major private real estate investors, sold 33 skilled nursing facilities (SNFs) in South Central Texas. The transaction is the largest seniors housing sale on record in the state, according to IPA.

The portfolio consists of approximately 4,200 licensed beds and some “shovel-ready development sites. The purchase price was not disclosed.

IPA’s Joshua Jandris, Mark Myers, Peyton Stanforth and Charles Hilding represented the seller, Regency Post-Acute Healthcare System. IPA also procured the buyer, Capital Senior Ventures.

“This is one of the largest portfolio sales of skilled nursing facilties since the $6.1 billion sale of HCR ManorCare’s portfolio to HCP back in 2011,” said Myers, executive director at IPA.

Mainstreet Returns to Canadian Public Markets in Reverse Takeover of Kingsway Arms

Mainstreet Investment Company LLC, an affiliate of the national real estate development company, has completed a reverse takeover (RTO) transaction with Kingsway Arms Retirement Residences Inc. (TSX VENTURE: KWA), a publicly traded Canadian corporation. The new company was renamed Mainstreet Health Investments Inc. (TSX VENTURE: HLP).

The transaction was previously announced November 6, 2015. The RTO was completed April 4 and was approved by KWA shareholders. It results in the company owning a portfolio of 10 senior care properties in and around Chicago for a total of 2,305 beds.

The transaction marks Mainstreet’s return to Canadian public markets and is part of a long-term strategic plan to assemble a high quality portfolio of senior care properties. The company plans to acquire an 11th property located in Hanover Park, Illinois, in the coming months.

Certain changes were made to the agreement after it was initially announced last fall, including the removal of an annual incentive fee payable to Mainstreet under the management agreement that was put in place upon completion of the RTO. The amendments also outlined changes to Mainstreet Investment Company LLC’s funding of the 11th property and the removal of the right of third-party investors to exchange their shares of Mainstreet Health Holdings Inc. (MHI) for shares of the new company following the completion of the RTO.

Sabra Health Care REIT, Inc. Closes Sale of Forest Park Medical Center—Frisco

Sabra Health Care REIT, Inc. (NASDAQ: SBRA) has closed on a previously-announced sale of its investments in the Forest Part Medical Center—Frisco hospital.

The hospital was part of a group of Forest Park medical investments. Two Texas-based Forest Park assets filed for bankruptcy relief. Sabra had announced plans to sell all three assets in December.

The REIT plans to use the proceeds from the sale and repayment of its debtor-on-possession loan investment to repay borrowings under the company’s revolving credit facility.

SLIB Sells $40 Million Skilled Nursing Portfolio in Florida, $5 Million Texas SNF  

Senior Living Investment Brokerage (SLIB) facilitated the sale of three skilled nursing communities in Florida for $39,850,000. The three communities are located in St. Petersburg, Lakeland and Lewiston.

Palm Terrace of St. Petersburg consists of 96 beds; Palm Terrace of Lakeland has 185 beds; and Palm Terrace of Lewiston has 155 beds.

The operations and the real estate were offered as two separate offerings. The operations were offered as a function of a Chapter 11 court ordered sale of the operations. The buyer purchased both the real estate and operations for all three communities.

Bradley Clousing and Patrick Byrne of SLIB facilitated the transaction.

SLIB also sold a $5 million skilled nursing facility in Crane, Texas. The sale was handled by Matthew Alley. The facility holds 110 beds and was built in 1996. It was purchased by a Texas operator.

“The Crane transaction allowed for the outgoing operator to sell a facility that was outside its geographic scope,” Alley said.

ROC Buys StoneRidge 

ROC Seniors Housing Fund Manager purchased an entrance fee continuing care retirement community (CCRC) in Mystic, Connecticut. The fund bought out Westminster Capital’s majority stake in the community for an undisclosed price. The minority owner and manager, Life Care Services, will stay on.

The property was originally developed in 2004 by LCS Development, and features 267 independent living units, 12 memory care units and 40 skilled nursing beds.

The deal was arranged by Cushman & Wakefield, with acquisition financing from Bank of America Merrill Lynch on behalf of the buyer group. Richard Swartz, Jay Wagner and Aaron Rosenweig, with Stuart Kim and Caryn Miller, handled the transaction.

The same group of handlers also recently facilitated the sale of two newly developed memory care communities in Boston MSA.

The communities were developed by joint venture partners The Maggiore Companies and Monarch Homes. They are being purchased in a joint venture between Garrison Investment Group, Grand Park Management and Focus Healthcare Partners. Both properties will be managed by LCB Senior Living.

Cushman & Wakefield was also the exclusive debt placement agent to the buyer and arranged financing with a regional bank.

Blueprint Healthcare Real Estate Advisors Closes $11 Million Sale of New York Community

Blueprint Healthcare Real Estate Advisors closed the sale of an 84-unit assisted living community located in Suburban Buffalo, New York, for the purchase price of $11 million, or $130,000 per unit.

The marketing campaign was steered primarily toward regional buyers on behalf of a local owner/operator. Blueprint also played a role in structuring an expedited licensure transfer process that enabled an “unprecedented” timeframe in the state.

The community, Tonawanda Manor, was operationally stabilized at the time of the sale with a margin exceeding 30% of total revenue. The mix of residents at the community included private pay and beneficiaries of New York State’s Assisted Living Program (ALP) at the time of the sale.

Ben Firestone and Connor Doherty facilitated the transaction.

Lancaster Pollard Arranges Sales of Senior Housing EMHS Communities

Lancaster Pollard worked with Eastern Maine Healthcare Systems (EMHS) to sell its senior living campus, Dirigo Pines Retirement Community.

The campus has two primary components: the Dirigo Pines Inn, a 107-unit (123-bed) licensed facility with 56 independent living, 17 assisted living apartments, 22 memory care units and 12 specialized care units, and the Dirigo Pines Cottages, which offers 56 high-end independent living cottages across from the Inn.

EMHS decided to divest the campus in 2014 or find a joint venture partner. The campus was purchased by Chicago Pacific Founders (CPF), a private equity firm. The firm assumed the debt of a low-interest, fixed-rate, 30-year term FHA/UD loan in the transaction. The sale now allows EMHS to concentrate on its core business, including its eight hospitals, numerous medical practices and clinics, long-term care facilities, home health and hospice, and emergency ground and air transport services.

Lancaster Pollard’s Chad Elliott and Aaron Becker, vice president, facilitated the transaction for Lancaster Pollard.

Written by Amy Baxter