June 30, 2023
Beth Sholom Non-Profit Long-Term Care Community in Virginia
ESI represents a mission-based non-profit group in the sale of Beth Sholom Village, a Skilled Nursing and Senior Living Community in Virginia Beach.
Beth Sholom Village opened the doors to its skilled nursing facility in 1980, which has 120 total licensed beds. The senior housing component was added in 2004 and includes 56 Assisted Living and 18 Memory Care Units. Over the years, the community has benefited from the advantages of its location, many of which boosted the communities desirability to potential new ownership groups.
The state of Virginia has an existing certificate of public need to develop new skilled nursing and assisted living communities, protecting the community from new competitors. The community also benefitted from a recent Medicaid rate increase in the state, and the surrounding population offers a large and growing number of seniors over the age of 80 years old. At the time of marketing the community was 93% occupied however it was only operating at a 3% net operating income margin. Considering the difficulties associated with managing an independent skilled nursing community today, the board had opted to sell Beth Sholom in order to construct a new senior living community that aligns more effectively with their long-term mission and commitment to providing exceptional care for seniors in the local vicinity.
ESI ran a confidential marketing process presenting several competitive offers to the board. A Mayland-based owner-operator was selected as the buyer. The ESI team worked through all stages of the deal, including the transition process, and closing.
“ESI highlighted a $2,600,000 potential expense savings that exists for a new regional operator, which the seller had not been able to achieve due to their lack of scale,” commented Hank Fuller, Senior Associate at Evans Senior Investments.
This is the second transaction ESI has closed for a non-profit seller in the last month. Stand-alone not-for-profit communities are becoming increasingly difficult to operate, with larger organizations often better equipped to manage the operating costs and meet the needs of residents in today’s environment.