Senior Housing Investments & Transactions: Care Capital Properties

Care Capital Properties to Acquire $400 Million Behavioral Health Portfolio

Care Capital Properties, Inc. (NYSE: CCP) has entered into a definitive agreement to acquire six behavoiral health hospitals in a sale-leaseback transaction for $400 million and to fund up to $50 million in capital expenditures to finance expansion and improvements in the portfolio.

The properties are currently owned by affiliates of Signature Healthcare Services, LLC, one of the largest privately owned behavioral health care providers in the country. Upon completion of the transaction, CCP will lease the properties to affiliates of Signature on a ten-year triple-net basis, with five renewals of five years each. The transaction is expected to close in the second quarter of 2017.

The portfolio includes six behavioral health hospitals in California, Arizona and Illinois. The properties contain a total of 712 beds, and all six have either recently been expanded or are currently in planning or under development to increase bed capacity. The properties provide inpatient and outpatient psychiatric care, addiction services, geriatric psychiatric care, and child and adolescent psychiatric care. Signature operates eight other acute psychiatric hospitals in addition to the portfolio to be acquired by CCP.

CCP expects to fund approximately $380 million at closing and will have an option, exercisable beginning in the fourth quarter of 2018, to purchase one additional building for an amount that is expected to be approximately $20 million. In addition, CCP will have a right of first offer on future real estate investment opportunities with Signature.

The acquisition will be funded through cash on hand, disposition proceeds and borrowings under the company’s revolving credit facility. The full-year GAAP accretion is projected to be approximately 13 cents. The transaction is subject to regulator approval and other customary closing conditions.

LCS Buys Tennessee Community

LCS, a senior lifestyle products and services provider, has added Clarendale at Indian Lake to its real estate portfolio. The community is located in Hendersonville, Tennessee, and is the fourth Clarendale senior living closing for LCS and its partners, Ryan Companies and Harrison Street Real Estate Capital.

The transaction was facilitated by LCS Real Estate, and the community will be managed by Life Care Services, both LCS companies. Calendale at Indian Lake is a $48.5 million senior living community offering independent living, assisted living, and memory care apartments and services.

SLIB Sells Two Communities in Illinois

Senior Living Investment Brokerage (SLIB) facilitated the sale of two senior living communities in Decatur, Illinois, for a purchase price of $11,155,000.

Keystone Gardens is a 50-unit independent living community built in 2001. The community is approximately 62,218 square feet and sit on approximately 4.5 acres. Keystone Meadows is a 60-unit assisted living community built in 1999. It is approximately 45,498 square feet and sits on 3.62 acres. Both communities were approximately 72% occupied at the time of the sale.

The seller was a regional company based in Michigan, and this was their only community in Illinois. The seller reached their hold on the investment and the investors elected to liquidate.

The buyer was a regional company based in Michigan with three other communities in Illinois and others across the Midwest. Upon stabilization, it is likely the buyer will move forward with HUD debt as they have done on a majority of their portfolio.

Ryan Saul of SLIB facilitated the transaction.

SLIB also facilitated the sale of Maple Winds and Autumns View Personal Care for the purchase price of $5.2 million. The community is located in Portage, Pennsylvania, and consists of 50 skilled nursing beds and 22 beds of personal care. It was built in 2003, is 30,00 square feet and sits on 6.1 acres.

The building was the owner’s only facility. The buyer is a regional operator based in New York with a strong SNF presence in Pennsylvania.

The skilled portion of the building had a 30% quality mix and the personal care was all private pay with rates ranging from $1,755 to $2,000 per month. The building was primarily semi-private rooms and census typically hovered around 80%.

Toby Siefert and Nick Cacciabando of SLIB handled the transaction.

The Ensign Group Acquires Iowa SNF

The Ensign Group, Inc. (NASDAQ: ENSG) has acquired the Rehabilitation Center of Des Moines, a 74-bed SNF in Des Moines, Iowa. The facility is subject to a long-term lease and the acquisition was effective April 1, 2017. At acquisition, the property’s occupancy rate was 74%.

The acquisition brings Ensign’s portfolio to 214 health care facilities, 20 hospice agencies, 17 home health agencies and three home care businesses across 14 states.

Blueprint Sells SNF in Tennessee

Blueprint Healthcare Real Estate Advisors sold Renaissance Terrace, a 130-bed SNF in Harriman, Tennessee, for the purchase price of $6.1 million, or approximately $47,000 per bed.

The seller was a publicly traded real estate investment trust (REIT) based in California. Trailing 12-month operational performance on the asset yielded $6.6 million in total revenue and $444,000 in EBITDAR, representing a 6.7% operating margin.

Nick Martinez and Todd Okum of O&M Investments, LLC, made the successful bid to purchase the facility. O&M Investments will be leasing the facility to a regional operator with an existing footprint in Tennessee.

Christopher Hyldahl and Gideon Orion were the lead advisors on the transaction.

IPA Sells SNF in Texas

Institutional Property Advisors (IPA) sold Seabury Nursing Center, a 75-bed skilled nursing facility (SNF) in Odessa, Texas, for an undisclosed price in early March.

The facility was being run by a local non-profit, at a loss, for the last few years. With the sale, the group is exiting the long-term care business. Previous owners did major cap ex work on the facility in 2015 and 2016, draining the non-profit’s liquidity. Operations started to decline during renovations with one wing of rooms taken out of service.

Ryan Harrington of Trinity Healthcare assumed operations of the facility in October 2016. As recently as 2014, the SNF generated north of $3 million of revenue and operated at a 10% margin. Trinity finished the renovations, shored up operations of the asset and closed on the real estate on March 1, 2017.

The IPA team at Marcus & Millichap handled the sale, led by Charles Hilding, Ryan Fleming, Mark Myers and Joshua Jandris.

Springpoint Senior Living Adds Affiliates 

Springpoint Senior Living, a New Jersey-based nonprofit provider of senior housing and services, has added Cadbury Senior Lifestyles as an affiliate. Springpoint will assume management and oversight of a continuing care retirement community (CCRC) in Lewes, Delaware, and the Cadbury Senior Lifestyles at Home program on or about May 1, 2017, subject to regulatory approvals. The CCRC has 130 independent living apartments and cottages, 45 assisted living and 40 skilled nursing beds.

Cadbury currently operates the CCRC and a home CCRC program. Springpoint currently has seven CCRCs, 19 affordable housing communities and a home care division in New Jersey. It serves nearly 4,000 senior living residents and employs more than 2,000 people.

Written by Amy Baxter