July 24, 2020, Ben Swett, SeniorCare Investor - Seven years after acquiring an assisted living/independent living community in Rochester, New York, Ardent Senior Living is selling the property to a New York-based owner/operator.
Originally built in 1974, the community features 115 assisted living units (with 200 licensed beds) and a 42-unit independent living building. The campus participates in New York’s Assisted Living Program (ALP), which provides a higher level of care (close to skilled nursing) in an assisted living setting for Medicaid residents.
It’s a win for the state, which can reimburse nearly skilled nursing level care at a lower rate, and for the providers, which can take in Medicaid residents at a significantly higher rate. Even with the higher care and staffing costs, those all-Medicaid facilities can often boast 30% operating margins. The AL community was around 80% occupied, while the IL building was relatively full.
In 2013, Ardent Senior Living acquired the property for under $30,000 per unit and at a roughly 10.5% cap rate at the time.
The current purchase price has not been disclosed. Humair Sabir and Jacob Gehl of Blueprint Healthcare Real Estate Advisors handled the current transaction, positioning the property as a value-add opportunity for a new owner to increase the resident acuity and the bed licensure.
Further physical plant improvements couldn’t hurt either. That will be the job of the privately held New York buyer.