Senior Housing Investments & Transactions: Chicago Pacific Founders

Marcus & Millichap Announce $13.8 Million Sale of Ohio ALF

Mark Myers, Joshua Jandris and Charles Hilding of Marcus & Millichap Institutional Property Advisors represented the seller in a transaction that closed recently, involving an 82-unit assisted living and memory care facility in Canton, Ohio.

The Landing of Canton was sold by a private seller with a multi-state portfolio. The buyer, a large private fund, plans on keeping the tenant in place.

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The transaction closed on February 6, 2015, for $13.75 million, or $167,683 per unit, representing a 4.75% capitalization rate on trailing EBITDAR. The buyer plans to effectuate operational changes that will greatly enhance the revenue and cash flow.

The community, which holds 62 assisted living units and 20 memory care units, is 100% occupied. 

Capitol Seniors Housing Acquires Maryland ALF for $18 Million 

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Keith Lipton, Avison Young principal and managing director of the company’s Washington, D.C. office, announced recently the sale of Residence on Greenbelt, an 89-unit assisted living and memory care community located in Lanham, Md., for $18 million.

IntegraCare Corporation retained Avison Young to present the property to the marketplace. The seller had acquired the underperforming property out of distress, invested $2 million in capital upgrades, implemented improvements to the operation of the community and raised occupancy to 88% at the time of sale.

Avison Young Principals Jim Kornick and Chip Ryan, based in the firm’s Washington, D.C. office, marketed the property as an opportunity to purchase a recently renovated facility positioned for additional income growth.

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After a competitive process, Capitol Seniors Housing was selected as the buyer.

The sale is the third senior-housing transaction brokered by the team over the past year.

SHA Capital Partners Announces Completion of First Senior Housing Acquisition

Real estate investment advisory firm SHA Capital Partners, LLC, has announced the completion of its first senior housing acquisition, buying Heritage House of Portage, a 66-unit assisted living property in metropolitan Madison, Wis., in a $5.9 million deal.

“We like the opportunity to generate strong current cash flow and also create significant value through modest occupancy gains,” said David Watkins, partner of SHA Capital Partners.

SHA Capital Partners purchased the property directly from the owner, with no broker involvement.

“Our acquisition process was collaborative and patient. We gave the sellers a fair price and allowed them to focus on running the property, rather than selling it,” Watkins said.

The firm expects to pursue similar opportunities in Wisconsin and elsewhere.

MB Financial Bank, NA, provided debt financing. SHA Capital raised equity from friends and family and from senior housing industry sources, including RSF Partners, LLC, a Dallas senior housing investment firm that has completed more than $700 million of investment transactions.

Chicago-based Matthews Senior Living will have an ownership interest in the partnership and will manage the community.

Tom Ostrom, president of Matthews Senior Living, said the capital improvement plan is an important step in attracting additional residents to the community. The plan calls for upgrades to the reception area, the dining room and other shared spaces.

“We see room for a few improvements that will enhance the quality of life for the residents, including creating a movie room, replacing flooring and reconfiguring the dining room,” Ostrom said.

Senior-Focused Tech Company Acquires Mobile App Development Startup

Connected Living, a Quincy, Massachusetts-based company that helps connect seniors to the Internet, announced recently that it acquired Tethered LLC, a mobile app development startup with offices in California, Colorado and Nevada, according to local reports. Terms of the acquisition were not disclosed.

Connected Living CEO Sarah Hoit said the combined company will have 150 employees. Hoit said the acquisition would give Connected Living a leg-up when it comes to development of apps for wearable devices, smartwatches and phones to connect seniors and their families.

Connected Living, which offers a closed social network for seniors, is currently available at hundreds of senior living communities in 36 states across the country.

Hoit said the platform has about 60,000 users, which includes seniors and their families.

Capital One Provides $150.6 Million in Loans to CNL Healthcare Properties

Capital One Bank has announced that it served as lead arranger, administrative agent and bookrunner for loans totaling $150.6 million for the acquisition of nine Class-A medical office buildings in North Carolina and Georgia.

The buyer was CNL Healthcare Properties Inc., a Florida-based real estate investment trust (REIT) that focuses on acquiring and developing properties in the senior housing and healthcare sectors. 

Five of the properties are located in and around Charlotte, N.C., on three Novant Health campuses. Of the remaining four, one is located in Asheville, N.C., on a Duke LifePoint campus, another is in Rome, Ga., at Floyd Medical Center, and two properties near Atlanta are satellite offices for Southern Regional Medical Center.

Together they total 907,300 square feet of rentable space. Certain properties have ground leases that prohibit cross-collateralization. As a result, Capital One financed them through individual term loans, consolidating the remaining properties into a single loan.

CNL Healthcare Properties is one of the largest third-party owners of medical office buildings, acute care and post-acute care medical facilities in the United States. The acquisition also increases the size of the company’s portfolio to approximately 100 assets, including health care facilities and senior housing communities. 

CCRC Merges With Presbyterian Senior Living

Cathedral Village, a continuing care retirement community (CCRC) in Philadelphia, Penn., has agreed to merge with Presbyterian Senior Living, according to local reports

Presbyterian Senior Living, based in Dillsburg, Pa., south of Harrisburg, operates 30 retirement communities in Pennsylvania, Delaware, Maryland and Ohio and provides services to 6,000 seniors.

Presbyterian had operating income of $13.8 million on revenue of $205.2 million in 2013, the local report indicates. Cathedral Village, by contrast, had an operating loss of $482,405 on revenue of $24.2 million in the year ended June 30. 

Cathedral Village has 293 apartments and a 133-bed nursing home, which was recently renovated with the help of a $4.2 million bank loan. A short-term rehab unit was added in the hope of bringing in more Medicare revenue.

Care Investment Trust Forms JV to Own, Operate 5 Senior Housing Communities

Care Investment Trust LLC, a senior housing-focused real estate investment and finance subsidiary of Tiptree Financial Inc. (NASDAQ: TIPT), has formed a joint venture to own and operate five senior housing communities with affiliates of Royal Senior Care Management, a privately held owner and operator of senior housing facilities in the Southeast region of the United States.

Care owns an 80% interest in the joint venture, while affiliates of Royal own the remaining 20% interest and provide property management services to the communities under a management contract.

Care and Royal expect to spend approximately $2.7 million in capital expenditures across the portfolio to enhance and reposition each of the properties. The 282-unit portfolio acquisition closed on February 9, 2015.

In connection with the acquisition, Care and Royal secured a $22.5 million, 5-year loan, which includes 36 months of interest-only payments and a $2 million earn-out feature provided certain financial hurdles are achieved. The initial funding amount was approximately $19.9 million and the remaining amount was held back at closing to reimburse the borrowers for capital expenditures.

“Care continues to execute on its business strategy of partnering with best-in-class regional operators with this acquisition of five senior housing facilities in South Carolina and Florida,” said Salvatore “Torey” V. Riso, Jr., president and CEO of Care. “We are delighted to have closed this first acquisition in partnership with Royal, and look forward to working closely with their team to add value to these facilities, as well as others in the future.”

Additionally, Royal said the southeastern demographic of this acquisition, specifically Florida and South Carolina, is a “perfect complement” to its existing portfolio where it is familiar with the local laws and customs. 

AdCare Health Systems Leases 2 Properties in Georgia

As part of its ongoing strategic plan to transition from an owner and operator of health care facilities to a health care property holding and leasing company, AdCare Health Systems, Inc. recently announced that it signed an agreement with affiliates of C-Ross Management, an operator of eight long-term care facilities, to lease two of its skilled nursing facilities in Georgia.

The lease is expected to become effective for one of the two properties on or before April 1, 2015, and the other on or before June 1, 2015, pending approval by the Department of Housing and Urban Development (HUD).

Under the terms of the triple-net lease agreements, the lessees of the facilities will be responsible for day-to-day management, ongoing maintenance and facility improvements for the duration of the leases. The initial term of the leases is five years with a five-year renewal option. The annual rent in the first year will total $1.4 million and will escalate at $24,000 each year through the initial term and 2% upon renewal.

“We are continuing to make steady and consistent progress in our plans to transition to a healthcare property holding and leasing company,” said Bill McBride, AdCare’s president and CEO. “With this announcement, we now have signed agreements to transition nearly three-fourths of our owned properties to the new leasing model. Our team is working diligently to identify quality partners to negotiate agreements and queue them up for the requisite approvals. While there is still work to be done, I am pleased with our progress.”

The company reaffirms expectations for the majority of the remaining facilities to be leased or subleased by the end of the first quarter of 2015.

Since the Board approved the strategic plan to transition the company’s business from an owner and operator of health care facilities to a health care facilities holding and leasing company, AdCare has entered into agreements to lease or sublease 28 of its 37 properties.

Integral Senior Living Expands Presence in Texas 

Integral Senior Living (ISL) has added a new community to its list of managed properties. Clayton Oaks Living will soon be opening in Richmond, Texas, making this the sixth community ISL is now managing in Texas. The new assisted living and memory care community anticipates opening in spring 2015.

It will have 98 residences with 73 assisted living units and 25 memory care units when completed.

“The demand for senior living options in the Richmond area is on the rise,” said Collette Valentine, CEO and COO for ISL. “Clayton Oaks Living will soon be providing wonderful care for residents looking for quality assisted living and memory care options. We are so pleased to be able to bring our expertise to this new community.”

Senior Living Investment Brokerage Sells Indiana CCRC

River Terrace Estates consists of 52 independent living, 41 assisted living, 14 memory care and 30 skilled nursing beds. The asset is three stories, approximately 138,920 square feet and is situated on approximately 37.85 acres of land.

The sale was part of a Chapter 11, planned bankruptcy sale. The purchase price for the real estate was $6 million, but as part of the bankruptcy, the buyer also assumed approx $2 million of refundable deposit liability and took over AP/AR. The all-in purchase price is approximately $8 million, which computes to a realized 7% cap rate.

The seller is a not-for-profit based in Tennessee that was hindered with significant bond debt. The buyer is a regional owner/operator with other communities in Indiana.

Episcopal SeniorLife Communities acquires Pinehurst Senior Living 

Episcopal SeniorLife Communities (ESLC) has announced that it has acquired Pinehurst Senior Living from The Conifer Group. The transition process is currently underway and ESLC will assume formal operations upon closing, according to local reports

Pinehurst is a 68-unit independent living facility in Honeoye Falls, N.Y., that was developed and opened by The Conifer Group in 1991. The addition of Pinehurst is consistent with ESLC’s plan to expand into new neighborhoods and reach seniors as they age in their place of choice. ESLC will look to add neighborhood outreach services and build a larger referral network to strengthen the supportive housing program that currently exists.

“Pinehurst holds a unique niche in the rural community of Honeoye Falls and is an area where we are eager to grow,” said Loren Ranaletta, president and CEO of ESLC. “It fits nicely with our vision of supporting and growing housing and community-based services for seniors.”

With the addition of Pinehurst, ESLC now operates 10 communities. Services include skilled nursing, transitional and rehabilitation care, assisted living, memory care, hospice, independent living, affordable housing, patio homes and an adult day program.

Latest Acquisition Enhances Greystone Health Network’s Presence in Ohio

Tampa, Florida-based Greystone Healthcare Management Corp.’s latest acquisition enhances the Greystone Health Network in Ohio by adding Executive Care of Columbus, a home health and private duty nursing services provider serving Columbus, Newark and Mt. Vernon in Ohio.

“Joining the Greystone Health Network is the right next step for us.” said the former owner, Penni McClain-Carver. “This ensures our legacy and our employees will now have expanded opportunities for professional growth and stability.”

This expansion of Greystone’s services complements its existing health network in the Columbus, Ohio community, which currently includes The Rehabilitation and Health Center of Gahanna and Greystone Hospice of Ohio.

“This is an important component in our continuum of care,” said Connie Bessler, CEO of Greystone Healthcare Management. “Executive Care provides compassionate care focused on enhancing the quality of life of our patients. We are adding a successful and distinguished home health care organization to Greystone’s growing network of resources in Ohio.”

The Highlands of Topsham Sold to Chicago Pacific Founders Subsidiary

The Highlands of Topsham, one of the largest and oldest retirement communities of its kind in Maine, was sold Friday to a private investment group that specializes in senior living communities and health care-related ventures, according to the Portland Press Herald

Sea Coast Management, the largest developer of senior living communities in Maine, sold The Highlands for an undisclosed amount to CPF Living Communities, a subsidiary of Chicago Pacific Founders, according to John Wasileski, Sea Coast’s founder and president.

“This is a giant step forward for Chicago Pacific Founders and we intend to build on the great legacy started by John Wasileski and his team,” said John Rijos, chairman and chief executive officer of CPF Living Communities.

The Highlands holds 450 residents in 350 units of independent living, assisted living and memory care housing on a 75-acre campus. Sea Coast’s other properties, including Highland Green in Topsham and OceanView at Falmouth, were not part of this transaction.

The sale encompasses the Highlands Retirement Community and its affiliated properties, including The Maine Lodge independent living apartments, Cadigan Lodge and Friendship Cove assisted living apartments and the Governor King Community for residents with Alzheimer’s and other memory issues.

“This sale represents a major investment in the future of The Highlands that is good for our region and the state,” Wasileski said. “Chicago Pacific Founders is made up of experienced partners with deep expertise in the health care and aging markets.”

The Highlands will be operated by its longtime management consultant, Grace Management Inc. of Minneapolis, Minn., which was recently purchased by CPF. The Highlands’ 140 employees will be transferred to Grace.

In addition to the sale, Wasileski announced that Sea Coast and CPF are entering a joint venture to complete the final phase of construction of the Town Hall Village, a part of The Highlands that includes the remaining lots and the historic building conversion that are currently underway.

Read the full article here.  

Senior Living Investment Brokerage Sells $29.5 Million ALF Portfolio

Senior Living Investment Brokerage, Inc. has announced that Matthew Alley and Toby Siefert sold a $29.5 million portfolio of assisted living facilities with a focus on memory care located in the Houston and San Antonio areas in Texas.

The ALF communities, which consist of 16 units, were built from 2005 to 2014. The purchaser was a nonprofit entity that was looking to expand its presence in Texas.

“The portfolio was very profitable and had upside from two properties that were in the fill-up stage,” Alley said. “Senior Living garnered four strong offers and moved forward with a group that financed the transaction through a bond issuance.”

Over the past four years, Senior Living has completed over 25% of the publicly announced senior housing transactions.

Written by Emily Study

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