The community sold for $25,000,000 or $181,159 per bed.

At the time of marketing, the community was 96% occupied and making over $2,000,000 in net operating income. Along with the community’s strong surrounding demographics, the facility also held a contract for 50+ Therapeutic Residential Care beds. The performance continued to hold strong throughout the marketing and closing process.

Despite the heavily regulated healthcare environment of California, ESI’s competitive process yielded 7 offers within 25 days of being on the market. The buyer, an East Coast real estate holding company, structured a lease with a local operator in the state. “The Evans Senior Investments team was able to showcase to buyers the expense-saving opportunity for a new regional operator in excess of $750,000. The owner received full value for it, as if they were operating the community with an additional $750,000 of net operating income” commented Hank Fuller, Senior Associate at ESI.

ESI brought both the seller and buyer together to ensure a streamlined transaction process, despite the challenges and uncertainty of the overall lending market. Having worked closely through the negotiations of the contracts and the due diligence period, ESI was able to guarantee a smooth transition for the residents and staff along with the new operator. Matt Jassak with Foley & Lardner represented the sellers on the transaction.

Evans Senior Investments continues to observe the difficulty of operating long-term care assets in today’s marketplace with rising labor costs, the COVID-19 Pandemic, rising interest rates, and the increasing need for compliance oversight.