Senior Housing Investments & Acquisitions: Capital Senior Living, HealthLease Properties

HealthLease Properties REIT Acquires Senior Care Facility for $34.3 Million

HealthLease Properties Real Estate Investment Trust recently announced it had completed the acquisition of a Canadian senior care facility in High River, Alberta, from Continuum Healthcare Holdings, Ltd. for $34.3 million.

Sunrise Village High River is a newly built facility with 176 units that provide both assisted living and independent living. The facility is leased to Continuum on a 10-year triple-net lease with two five-year renewal options. The facility is licensed by Alberta Health Services.


Sunrise Village has an implied cap rate of 7.3%.

Brookdale Senior Living Buys Denver Heritage Club for $20 Million

Tennessee-based Brookdale Senior Living Inc (NYSE:BKD) has purchased the building where it operates the senior living community Heritage Club of Denver for $20 million.


Heritage Club is located at 2020 S. Monroe St. in Denver and was formerly owned by Chicago-based Lillibridge Healthcare Services Inc.

Brookdale has operated Heritage Club for several years, and the company has decided to take advantage of an opportunity to purchase the property. No changes in operations are expected.

Senior Housing Investment Specialists Close on $30 Million Property

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Marcus & Millichap, investment specialists in the National Seniors Housing Group (NSHG), closed on the sale of a 240-bed nursing home in Brooklyn, N.Y. called Bishop Hucles.

The sales price was just over $30 million. The seller was the an arm of Episcopal Health Systems (EHS) of New York and the buyer, Providence Care, Inc., is a local New York investor with four other nursing homes in New York City.

While the property had a negative earnings before interest, income taxes, depreciation, amortization and management fees (EBITDAM) when Providence Care took over management in 2012, the buyer was able to turn a significant profit within 12 months of taking over the facility. During the change of ownership, a myriad of factors delayed the closing, including Hurricane Sandy, when the subject facility provided care to about 200 displaced nursing home residents from the other EHS facility located in Far Rockaway, one of the areas hit hardest by the hurricane.

Other hurdles included the need to obtain Supreme Court approval, because it was a nonprofit seller, and approval by the Dormitory Authority of New York (DASNY) for the assumption by the buyer (who bought the facility with a nonprofit entity) of about $21 million in bond debt. These factors, combined with the lengthy Change of Ownership (CHOW) process, made this a particularly difficult transaction, Marcus & Millichap says in a news release. Senior Director Mark Myers and Josh Jandris closed the sale.

American Realty Healthcare Trust Acquires 2 Assisted Living Communities for $75 Million

American Realty Healthcare Trust (NYSE:HCT) has acquired two assisted living communities in Arizona and New Mexico for $75 million.

Woodmark of Sun City, Ariz., was built in 1998 and Woodmark of Uptown in Albuquerque, N.M., was built in 2000.

The seller, AEW Seniors Housing Investors, purchased these properties in September 2011 for $52.5 million and a cap rate of 7.5%. Senior Lifestyle Corporation has been managing them and will continue to do so for American Realty under a RIDEA structure.

Kandu Capital Expands Into Louisiana Through $5.5 Million Deal

Kandu Capital, LLC, a private investment company with a portfolio of senior living communities, and its operating company Bloom Senior Living have acquired a 119-unit senior living community in Bossier City, La., for $5.5 million.

The community name has been changed from Glenview Gardens to Bloom at Bossier, and a portion of the community will be converted to assisted living and memory care in order to offer residents additional senior living solutions and create a continuum of care campus.

With the acquisition, Bloom continues to expand its portfolio of independent living, assisted living and memory care communities throughout the United States.

Legacy Healthcare Acquires Health Center for $10.5 Million

Legacy Healthcare has acquired St. Matthew Center for Health, part of Lutheran Social Services of Illinois, for approximately $10.5 million. The property has been reflagged as Avantara Park Ridge.

Located at 1601 N. Western Avenue in Park Ridge, Ill., Avantara will provide post-hospital nursing and rehab services.

“This geography, right next to Advocate Lutheran General Hospital, presented an opportunity with the right location and the right facility,” said Michael Manuel, vice president of business development and strategy, in a written statement. “It will allow us to deliver first-class amenities and concierge services to build preference among patients, families, physicians and others in the health care community.”

Renovation and expansion is expected to begin on Avantara Park Ridge late this summer.

This is the fifth addition to the Legacy Healthcare portfolio in the past year. Other properties include Warren Barr Gold Coast in Chicago, Arlington Long Grove, Aurora Rehabilitation and Nursing and Warren Barr North Shore located in Highland Park.

The Ensign Group Acquires Angeles Home Health Care in California

The Ensign Group, Inc. (NASDAQ:ENSG), the parent company of the Ensign group of skilled nursing, rehabilitative care services, home health care, hospice care, assisted living and urgent care companies, has acquired Angeles Home Health Care located in Los Angeles, Calif., for an undisclosed amount.

Angeles will be operated by Cornerstone Healthcare Inc., Ensign’s home health and hospice operating company.

The purchase was made with cash and brings Ensign’s portfolio to 11 home health agencies and nine hospices, across nine states. Ensign expects the newly acquired agency to be mildly accretive to earnings in 2014.

“Expanding our service offerings to include home health reflects our strategic commitment to establishing the full continuum of post-acute care in the communities we serve,” said Christopher Christensen, Ensign’s president and CEO, in a written statement.

Christensen noted that Ensign is actively seeking additional opportunities to acquire both well-performing and struggling home health and hospice operations across the U.S.

Capital Senior Living Acquires 2 Communities For $34 Million

Capital Senior Living (NYSE:CSU) announced in its second quarter earnings release it has completed the acquisition of two senior living communities for a combined purchase price of $33.9 million. The communities, unnamed, add to the company’s operations in Virginia and Wisconsin.

They were financed with approximately $26.2 million of non-recourse, 10-year mortgage debt and a blended fixed interest rate of 4.59%.

The acquisitions are expected to add adjusted cash from facility operations (CFFO) of $0.04 per share, increase annual revenue by $8.2 million and add $2.9 million of EBITDAR.

Average occupancy at each community is greater than 90%, and averse monthly rents for the communities are approximately $3,700.

With the acquisitions, Capital Senior Living will have acquired seven communities for a combined purchase price of $145.6 million through the first three quarters of the year. These 2014 acquisitions are expected to generate greater than a 17% cash on cash return.

Written by Emily Study

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