May 28, 2021
Sale of Rochester Manor and Villa
ESI represented the sale of Rochester Manor + Villa, a 122 bed skilled nursing and 62 unit personal care community for $9,200,000 ($64,000 price per functional bed/unit).
Built in 1965 with a $2,500,000 renovation from 2015 - 2019, the community exhibited a modern physical plant with all of the rooms at the community being private or semi-private. Despite the contemporary design, the community was not profitable at the time of marketing the offering, with census averaging 69% and revenue of $10,450,000 resulting in a loss of over $1,000,000 in net operating income. Contributing to the below average profitability was the high expense structure, agency staffing costs in excess of $800,000 per annum, and declining census as the result of the COVID-19 Pandemic. Additionally, of the 62 Personal Care units at the community only 22 were currently operational as capital improvements were needed to bring the 40 offline units into operation.
“ESI ran a confidential marketing process to a select group of regional owners/operators and procured 6 competitive offers within 30 days of going to market. The competitive bidding process for a community losing over $1,000,000 per year prior to paying its debt service showcases the strength of the skilled nursing market today,” commented Henry Fuller, Senior Associate at ESI.
ESI represented the seller, an independent owner/operator who sought to exit the long-term care industry. Jason Stroiman, President and Founder of ESI, commented “Rochester Manor + Villa presented an exciting opportunity for a new ownership group with operational expertise and synergies in the state of Pennsylvania to place an emphasis on increasing skilled nursing census and to capitalize on the recent renovations in order to position the community as a post-acute care destination in its local market.”
The buyer was an East Coast based owner-operator of skilled nursing communities who wanted to grow their presence in the state of Pennsylvania.
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 continued crisis related to the COVID-19 pandemic will likely intensify the struggles of independent owners as the crisis strains the day to day operations at facilities nationwide. Since March 31st, 2020, Evans Senior Investments has closed over $419M in transaction volume, with over $1.5B in transaction volume set to close in 2021.