Bloom Senior Living is offloading its skilled nursing and behavioral health assets in part to fund its future growth and focus on senior living.
Bloom’s parent company, Kandu Capital, announced the sale of two skilled nursing facilities and management of a mental health and rehabilitation center in California for just under $71 million or about $225,000 per bed.
That sum in addition to the $37 million sale of a senior living community it closed in 2021.
With the sales, Birmingham, Michigan-based Bloom Senior Living now operates a five-community portfolio, with three in Indiana and one each in Louisiana and South Carolina. The communities currently carry an average occupancy rate between 90% and 95%, and the company hit a new high watermark for occupied units and rates in 2022.
As the company pivots to focus solely on senior housing, it will target primarily communities in need for a turnaround. Some of the proceeds from the company’s recent sales will exclusively fund the growth of the company’s senior living platform, according to Bradley Dubin, principal for both Kandu Capital and Bloom Senior Living
“We think there is potentially a lot of distress in the environment and that is a good opportunity for us,” Dubin told Senior Housing News.
Dubin noted that the company has realized proceeds of nearly $108 million since May 2021 stemming from investments that initially totaled approximately $24 million, with $15 million of debt leverage.
“We have been pretty good at picking cycles,” Dubin said. “We started buying seniors housing in the last recession from 2009 to 2011.”
Dubin added that he sees the current landscape for M&A as advantageous for buyers.
Bloom’s growth in senior living and skilled nursing exit comes as the company’s portfolio of senior living communities is “doing great,” Dubin said.
“We’ve had record rate growth, record NOI growth and we have buildings that are performing well with good culture,” he said.
The company’s skilled nursing and psychiatric health facilities were also performing well enough to warrant a sale, he added.
Bloom started down the road of skilled nursing and behavioral health in 1963, when Bloom’s “chief inspiration officer” Richard Tischle “made a handshake deal and built Arizona’s largest nursing home,” according to the company.
The assets recently sold “represented the last piece of our legacy business,” Dubin said. But now that the last of Bloom’s non-senior living assets are gone, the company will focus further on growing its operator platform and its portfolio.
“We’re entering the next phase of really good fundamentals in the seniors housing space – mirroring what you saw in 2014 and 2015 with peak occupancy, peak rates, peak valuations and no new construction,” Dubin said.
Companies featured in this article:
