The purchase price was $52,000,000 or $73,342 per bed.
Comprised of seven assets, the portfolio includes 603 skilled nursing beds and 106 senior living units which were built between 1920 and 2012. At the time of closing the portfolio was 68% occupied and losing money. The portfolio received a significant Medicaid rate increase in July of 2022.
ESI ran a competitive marketing process to a select group of skilled nursing buyers. Despite the portfolio’s decreasing occupancy and continuous decline in net operating income, ESI received ten competitive offers after only 30 days on the market. “A regional operator with four homes in the Midwest and Southeast was chosen as the buyer due to their ability to close a portfolio in the midst of one of the toughest times the industry is facing,” commented Brendan DeSilvia, Associate at ESI.
Throughout the transition process, ESI was actively engaged with both the seller and buyer to help negotiate the contract, assist with the due diligence process, and helped each side work through regulatory issues that arose prior to close. In doing so, ESI was able to accomplish another seamless closing. “The M&A market continues to remain aggressive even with the headwinds that buyers and lenders continue to face” commented Jeremy Stroiman, CEO at ESI.
This marks the sixth transaction for ESI in the last 30 days with several more closings to come over the next few weeks.
Evans Senior Investments continues to observe the difficulty of operating long term care assets in today’s marketplace with rising labor costs and the increasing need for compliance oversight. The crisis related to the COVID-19 pandemic continues, while interest rates increase.