January 20, 2020, Ben Swett, SeniorCare Investor - Two Blueprint Healthcare Real Estate Advisors teams arranged a couple of sales of struggling senior care facilities. First, Christopher Hyldahl, Gideon Orion, and Kendra Gonzalez represented a private real estate investor in its sale of a 50-bed skilled nursing facility in the Los Angeles, California market.
Some $1.7 million was spent on capital improvements over the past three years, of which $800,000 was used to prepare the facility for the approval of 27 subacute care beds. The facility has strong per-patient day reimbursement rates and a good historical CMS star rating. However, it was losing money on about $4.25 million in top-line revenue and had over $250,000 in outstanding QA fees.
Blueprint positioned the property as a value-add opportunity and received multiple offers from investments and owner/operators, ultimately selecting a reputable real estate investor with a significant California footprint. The purchase price came to $4 million, or about $80,000 per bed. With all the recent upgrades and the new subacute beds, the turnaround has a good head start.
Then, Joshua Salzman and Ben Firestone sold a 100-unit assisted living/memory care community in Round Rock, Texas (Austin MSA). Developed by Prevarian Senior Living and TRISUN Healthcare in 2012, this was the only seniors housing asset of New York-based publicly traded REIT One Liberty Properties, which had Senior Care Centers LLC as the tenant and operator.
Before SCC’s Chapter 11 bankruptcy protection filing in late 2018, the relatively new community was performing well. But operations quickly deteriorated, and when SCC rejected its lease with One Liberty, the REIT was left with two choices: re-tenant or sell.
Originally, they decided to re-tenant, hiring Blueprint to run the process. But they were soon directed to sell, finding a New York-based private equity fund growing its seniors housing holdings across the country as a buyer. The purchase price came to $16.6 million, or $162,700 per unit.