Senior Housing Acquisition and Investment Roundup (12/20/12)

With 2012 almost over and the new year—and new tax rates—approaching, there’s been a flurry of transaction activity, even though not all of the deals are closing before the end of the year and they’re not all fiscal-cliff related. 

Marcus & Millichap Brokers Sale of Calif. SNF for $10 Million

Marcus & Millichap recently brokered the sale of a 120-bed skilled nursing facility in Central Coast California at its listing price of $10 million.


Lompoc Skilled Nursing & Rehab, in Lompoc, Calif., is a 43,000-square-foot property built in 2001 on 2.3 acres. The facility’s 2012 average occupancy rate was 81%, with a 12% quality mix (private pay and Medicare versus total census).

Gross revenues for the facility are $9.3 million, yielding a 12% operating margin. 

It sold for $83,333 per bed. The seller was a local owner/operator/developer whose core business was not operating senior care properties, says Rob Reis of Marcus & Millichap, who handled the transaction along with Christopher Hyldahl. The buyer was a regional operator that controls about 30 properties.


Diakon’s Pocono Lutheran Village to Stay Open After Sale to Local Group

Pocono Tranquil Gardens recently acquired Pocono Lutheran Village from Diakon Lutheran Social Ministries for an undisclosed price, the two parties recently announced, preventing the East Stroudsburg, Pa. community from closing.

The buyer plans to continue to operate 80-unit Pocono Lutheran Village as a personal care community. The transition between owners will be effective Jan. 14, and the community will be renamed Pocono Tranquil Gardens. 

Last month, Diakon announced it would be closing Pocono Lutheran Village after experiencing $4.6 million in losses since 2007. The public announcement prompted the local group to approach Diakon about buying the building. 

Tenn. Senior Living Community Sells for $11.6 Million

Evans Senior Investments recently represented the seller of a 90-unit senior living community that a REIT acquired for $11.55 million at a 7.4% cap rate.

Fieldstone Place has 48 assisted living and 42 independent living units and is located in Clarksville, Tenn. The 100,000-square-foot building sits on three acres and had a 93% occupancy rate at time of sale. It is 100% private pay.

The community was built in 2005 by the seller. It generated $2.4 million in revenue last year with an NOI of $860,000. 

CNL Lifestyle Properties Acquires Ga. Senior Housing Community 

CNL Lifestyle Properties, a real estate investment trust, has acquired a senior living community in Cumming, Ga. for $7.5 million from an affiliate of Servant Investments.

Laurel Creek Manor is a 48-unit assisted living and memory care community that was 100% occupied as of Oct. 31. The community will be added to the Dogwood Forest family of four senior living properties previously acquired by the CNL REIT in the Atlanta area in May, and will be renamed Dogwood Forest of Cumming.

The new acquisition has 36 assisted living units and 12 memory care units. It will be managed by Trinity Lifestyles Management, which manages the other Dogwood properties. 

Holdings Group Buys 2 Land Plots in S.C. for $9.2 Million, Plans Senior Housing

Chicora Gardens Holdings LLC is buying two plots of land from the city of North Charleston, S.C. for $9.2 million with plans to build senior living and a grocery store and create park space. 

Read more at the Charleston Regional Business Journal

Sabra Closes First ALF in Pipeline Agreement with First Phoenix Group

Completes $217.5 million of investments in 2012

Sabra Health Care REIT, Inc. (NASDAQ:SBRA) announced the acquisition of an assisted living facility located in Marshfield, Wisc., the first acquisition associated with the pipeline agreement entered into with First Phoenix Group, LLC in August 2012. With the acquisition, Sabra’s 2012 investments totaled $217.5 million.

Stoney River Marshfield is a 60-bed assisted living community that Sabra purchased for $8.2 million through a triple-net sale-leaseback transaction with First Phoenix. After the completion of license transfer on the community, currently expected to occur in the first quarter of 2013, Sabra will cancel the existing lease and enter into a new triple-net lease with a 50%/50% RIDEA-compliant joint venture partnership between affiliates of Sabra and First Phoenix. 

The initial lease and replacement lease will have similar terms, including an initial term of 10 years with two five-year renewal options and annual rent escalators equal to the greater of the change in the Consumer Price Index or 3.0%, resulting in annual lease revenues determined in accordance with GAAP of $0.8 million and an initial yield on cash rent of 8.0%.

Sabra funded the acquisition with available cash and proceeds from its secured revolving credit facility.

AIMCO Sells Conn. Senior Housing Complex for $11.2 Million

AIMCO (Apartment Investment and Management Co.) recently sold a four-story senior housing complex built in 1900 in New Haven, Conn. to Steele Property Holding LLC for $11.2 million.

The Section 8-subsidized property, Berger Apartments, was originally a corset factory that was converted to senior-designated apartments in 1981. 

Institutional Property Advisors, a Marcus & Millichap company, brokered the cash transaction for both parties, with Steve Witten, Victor Nolletti, Paul Davis, and Andy Daitch representing the seller and buyer. 

Berger Apartments has 144 units: 123 one-bedroom apartments and 21 two-bedroom units. It also features laundry facilities, a community room, game room, elevators, and a library. 

The complex was developed using Connecticut Housing Finance Authority financing, which matured in February 2012. 

Written by Alyssa Gerace

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