Senior Housing Investments & Acquisitions (8/4/13)

Holiday Retirement Assumes Management of N.Y. Senior Community

Holiday Retirement announced in late July it has assumed management for The Manor at Woodside, an independent living community in Poughkeepsie, N.Y., following a recent acquisition from Woodside Associates. 

The Manor at Woodside is a 111-unit retirement community featuring a live-in management team available 24 hours a day. Residents have access to common areas including a dining room, library, beauty salon and barber shop, lobby, outdoor courtyard, and various activity rooms.

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Under Holiday’s management, residents will receive three daily meals prepared by professionally trained chefs; scheduled transportation; regular housekeeping and linen services; and a schedule of daily activities and events. —Alyssa Gerace

MEDICA Acquires Senior Living Group

MEDICA (Paris:MDCA), a France-based long- and short-term care provider, has agreed to acquire 100% of the capital of Senior Living Group, a long-term care company based in Belgium, for an undisclosed amount. 

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SLG was founded in 2004 and is currently the leading private long-term care provider in Belgium, operating nearly 5,500 beds in 47 facilities across the country. The company generated $183 million of revenue in 2012 and expects 2013 earnings of $200 million. 

MEDICA expects its portfolio of beds that are being either restructured or built to increase to more than 3,500, as SLG has a pipeline of 1,256 beds to be built. 

“This strategic acquisition marks a major step in expanding MEDICA’s operations in Europe,” said Jacque Bailet, chairman and CEO of MEDICA, in a statement. “The Belgian market offers good operating conditions, strong growth prospects and SLG is an outstanding operator. This operation benefits from our good financing structure and is fully in line with our growth strategy aimed at creating value.”

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The transaction was financed with cash and is expected to close in 2013’s third quarter. —AG

Prestige Healthcare Management Adopts OnShift Across All Facilities 

OnShift, a web-based staff scheduling and labor management software provider for the healthcare industry, announced in late July that Prestige Healthcare Management has adopted OnShift across all its communities. Prestige Healthcare Management has experienced significant benefits with the enterprise-wide implementation of OnShift, including a greater ability to manage and measure staffing, reduce costs and save time.

“Proper, consistent staffing is the foundation of our facilities, and Prestige has always been committed to demonstrating quality care through strong staffing,” said Bob Norcross, CEO and COO, Prestige Healthcare Management, in a statement. “By partnering with OnShift, we have been able to take staffing to another level, which is reflected across our financial, operational and clinical successes. We can now measure our staffing efforts, identify patterns and prevent potential issues. We have reinvested the financial savings into other areas of our healthcare operations so both employees and residents benefit. Prestige Healthcare Management is experiencing significant growth, and OnShift is a critical element of our strategy going forward.”

Prestige Healthcare Management manages more than 2,600 post-acute care beds across the Southeast and Midwest. Company executives selected OnShift based on its ability to provide visibility into staffing across properties, track and report on key metrics, reduce costs through overtime reduction, and manage staffing levels to provide high quality resident care. 

So far, improvements gained from the OnShift implementation include better management oversight into staffing across facilities and a comprehensive view into labor management and employee performance, along with reduced overtime, driving financial savings. 

“Healthcare reform and reimbursement cuts have truly changed the landscape of the long-term care and senior living industry,” said Mark Woodka, CEO, OnShift. “Prestige is out in front with a strategic approach that emphasizes positive outcomes, financial performance, efficient operations and ongoing growth. We are pleased to partner with Prestige in staffing and labor management and look forward to continuing to work together in their evolution as a leading post-acute care services provider.” —AG

Post Acute Partners Closes Purchase of ElderWood Senior Care

New York City-based health care services provider Post Acute Partners announced in late July the formal acquisition of substantially all of ElderWood Senior Care, a Buffalo-based senior care company owned by the Chur family.

The ElderWood company includes nine skilled nursing facilities, six assisted living communities, two independent living communities, and an institutional pharmacy. It was started by Carol and Robert Chur in 1978 which just one facility in Williamsville before expanding to 19 facilities across Western and Central New York. 

As part of the transaction, Post Acute Partners is contributing $100,000 to a charity in honor of the Chur family and its contributions to the community. 

“The post-acute level of care is changing. It has become extremely sophisticated and quality driven,” said Warren Cole, a co-founder of Post Acute Partners. “As we grow our company, we seek to acquire only best-in-class companies. ElderWood is one such company. This acquisition positions Post Acute Partners to become the largest and most fully integrated provider in upstate New York.”

Post Acute Partners operates in New York, Rhode Island, Pennsylvania, and Massachusetts, and seeks to acquire additional geographically concentrated portfolios. —AG 

Madison Realty Companies to Acquire Six Assisted Living Communities

Madison Realty Companies recently acquired four Colorado assisted living properties and has two more currently in escrow.

In order to quickly close on the first for properties, Madison obtained local bank financing and simultaneously arranged for HUD financing on the two assisted living properties currently in escrow.

This marks Madison’s entry into assisted living management in Colorado. It already manages assisted living properties from California to Florida and has also managed apartment complexes in Colorado. 

The properties’ seller currently manages 14 other assisted living communities in the area and will collaborate with Madison to implement a value-add program and fulfill unmet market demands for senior living. 

“We are a value added company. Every property we acquire has a business plan that mitigates risk while carrying out fundamental improvements,” said Gary Langendoen, senior managing director at Madison Realty Companies. “As a result, our investors achieve risk-adjusted returns, capital preservation, and significant increased cash flow potential from expansion.”

These sorts of acquisitions are the company’s niche, he said.

“We buy the properties that are a little smaller in size and in secondary markets than the large REITs prefer, giving us better pricing options,” he explained. “Next, we expand or upgrade the properties so the REITs will buy them in the future.” —AG

Edgewood REIT Acquires Four Senior Living Communities in S.D. 

Edgewood Group LLC announced recently that Edgewood Real Estate Investment Trust has acquired three assisted living communities and one independent living community in South Dakota, effective August 1, for an undisclosed sum. 

The REIT entered into a long-term agreement to lease the communities to Edgewood Group LLC, based in Grand Forks, N.D.

The newly acquired assisted living properties are in Mitchell, Sioux Falls, and Watertown, S.D. The independent living community is also in Watertown, S.D.

“We are pleased to expand our services in South Dakota,” says Russell G. Kubik, Chief Operations Officer of Edgewood Management Group. “The staff members in these communities have a long history of providing quality care and services to seniors in Mitchell, Watertown, Sioux Falls and the surrounding area. We intend to help these communities continue offering high-quality, consistent and innovative care to these wonderful residents today and for years to come.”

Edgewood REIT currently owns six assisted living communities in Minnesota, South Dakota, and Idaho and is in the process of purchasing other senior housing properties that it will lease to Edgewood Group under long-term agreements. Edgewood Group currently owns and/or operates 42 independent living, assisted living, and memory care communities in seven states. —AG

Prudential Real Estate Investors Buys Ga. ALF

Prudential Real Estate Investors recently acquired an assisted living community in Crabapple, Ga. from AEW Capital Management, a Boston-based real estate investment trust, on behalf  of one of its institutional clients. The seller was represented by ARA Seniors Housing.

Arbor Terrace at Crabapple is a 93-unit, Class A  community with 67 assisted living units and 26 memory care units. It was built in 2009 and was 99% occupied at time of sale. —AG

HBS Assets Buys Two Skilled Nursing Properties for $21 Millon

HBS Assets recently acquired two skilled nursing facilities in Florida from a local owner/operator based in Jacksonville for $20.86 million in a transaction facilitated by Senior Living Investment Brokerage, Inc.

Osprey Point is a 60-bed facility in Bushnell, Fla. constructed in 1999 and developed by the current owner. Baya Pointe has 90 beds and is located in Lake City, Fla. Originally built as a 60-bed facility, a 30-bed Medicare addition was added to Baya Pointe in 2007.

The dedicated Medicare wings at both locations contribute to their strong financial performance and high Medicare census; both facilities have achieved at least a 40% Medicare mix since 2007. 

The sale included 150 beds at a price per bed of nearly $140,000 and an approximately 13.1% cap rate. The two facilities were about 93% occupied at time of sale.

Bradley Clousing and Ryan Saul handled this transaction.

“Despite a challenging rate environment pricing has been extremely aggressive for newer, well-run facilities. Both Osprey and Baya benefitted from a high Medicare census, modern well-maintained physical plants, and an extremely strong reputation in their respective markets,” says Clousing. “These factors coupled with low cost of capital created pricing that reached nearly $140,000 per bed. Sellers should continue to see this type of pricing given the favorable market dynamics as we are facing a transaction inventory shortage of skilled nursing facilities across the southeast and more specifically Florida.” —AG

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