In yesterday’s article we discussed the rapid pace that mergers and acquisitions in the senior housing space are undergoing this year. In today’s article we will provide some specific examples of acquisitions that demonstrate this. These transactions are being fueled by increasing demand for senior housing services and low interest rates. Although demand is projected to increase for years to come since thousands of baby boomers are now retiring every day, interest rates are expected to rise as the economy improves and the Federal Reserve pulls back further on some of the stimulus measures it implemented to boost economic growth during the last recession. Before interest rates rise and the cost of borrowing increases along with them, senior housing providers and investors who are seeking inexpensive capital for acquisitions or other purposes should contact Cambridge Realty Capital to learn more about the different financing programs it offers for joint ventures, sale/leasebacks, acquisitions, and other purposes as well.
In the Mid-Atlantic region of the country, the investment firms Formation Capital and Safanad Ltd. recently teamed up to purchase 14 skilled nursing facilities in Virginia, Pennsylvania, and Maryland. These facilities were purchased for approximately $150 million and have a combined 1,658 units between them. All 14 facilities will be operated by Consulate Health Care, which happens to be one of the leading providers of skilled nursing care in the country. This purchase adds to a growing portfolio for these firms who also partnered together last year when they acquired 36 senior housing properties for $400 million. Clearly this partnership is working well for these companies and this is reflected by their continuing purchases in the sector and statements from executives at both firms. Indeed, Vincent Paca, the managing partner and president of Safanad’s U.S. subsidiary, has expressed his excitement at the opportunities in senior housing with his statement that “We continue to explore investment opportunities in the healthcare real estate sector.” Meanwhile, Arnold Whitman, the chairman of Formation Capital, expressed his enthusiasm over the recent purchases made by his firm and Safanad with his statement that “This transaction represents another solid investment opportunity that gives us an opportunity to leverage our healthcare and operating expertise as well as strengthen our relationship with a best in class operator.”
In addition to Formation Capital and Safanad, another investment group that is moving rapidly to acquire senior housing assets is the real estate investment trust CNL Healthcare Properties (CNL). CNL recently announced that it has acquired eight senior housing communities in Texas and Illinois for approximately $187 million. Between them, these communities have nearly 800 units and 72 skilled nursing beds. CNL has also enlisted JEA Senior Living, Harbor Retirement Associates, and Integrated Senior Living to operate them. CNL is excited about these purchases because of the strong demand for senior housing services and because it allows its management to strengthen CNL’s relationships with these operators as well. This was made clear by a statement from its CEO Stephen H. Mauldin, who said that “Our targeted investment in these communities further allows us to deepen our relationships with dynamic leading operators. We have developed great confidence in the capabilities of JEA Senior Living, Harbor Retirement Associates and Integrated Senior Living to create and sustain engaging environments and communities were residents thrive.”
These multi-million dollar acquisitions are just a few of the purchases that have taken place so far this month and indicate that the senior housing market has remained hot through the start of the third quarter. Accordingly, investors and others who are seeking capital for acquisitions or other purposes should continue to look toCambridge Realty Capital for assistance in financing these transactions.
