Earlier this week we discussed how new entrants in the senior housing space and continued low interest rates have quickened the pace of mergers and acquisitions in the sector. We also discussed some specific purchases in Illinois that helped illustrate the attractiveness of senior housing assets in that state. Today we will expound on this further by discussing some acquisitions in other states that also help demonstrate the appeal of these assets. While interest rates remain low and the market for senior housing properties remains strong, industry participants and others who are interested in taking advantage of these conditions should contact Cambridge Realty Capitalto learn more about the different financing options that it offers for acquisitions, joint ventures, sale/leasebacks and other purposes as well.
A Healthcare REIT Adds to Its Senior Housing Portfolio
The Utah-based real estate investment trust Global Healthcare REIT Inc., just announced that it has entered into a purchase agreement to acquire a senior housing property in the Midwest for $3 million. The acquisition is the Meadowview Nursing Home in Seville, Ohio and with 27,000 square feet of space, it has plenty of room to accommodate the 100 skilled nursing beds that it is licensed for. The purchase of Meadowview will increase Global Healthcare’s portfolio to five facilities and it plans to grow this figure even more with additional purchases this quarter. Global Healthcare also plans to lease Meadowview to a third-party operator and will generate revenue from the lease payments that it receives. The company is clearly excited about this purchase and future purchases as well, as evidenced by the following statement from its president, Christopher Brogdon – “The forecasted financial metrics on this facility are extremely favorable once we have implemented our planned changes and upgrades. We continue to evaluate properties opportunistically and hope to complete several additional acquisitions currently in the pipeline.”
The Ensign Group Targets a Specific Market
The targeting of specific populations within the senior housing space is a strategy that some companies are beginning to follow and the Ensign Group recently demonstrated this with its purchase of four senior housing properties in southern California. All four properties were purchased from Keiro Senior Healthcare and specifically target the Japanese American market. Indeed, the word Keiro itself means “respect for our elders” and is included in the name of all of the properties that were acquired; for example, the skilled nursing facilities Keiro Nursing Home and South Bay Keiro Nursing Home; the assisted living facility, Keiro Retirement Home; and the intermediate care facility, Keiro Intermediate Care Facility. These facilities are nearly fully occupied at 94.5%, have a combined 615 beds between them and together they increase the number of senior housing properties owned by the Ensign Group to 11. Ensign’s president and Chief Executive Officer Christopher Christensen is excited about the company’s new properties because they already have a high occupancy rate and because they “strengthen [Ensign’s] presence in the Los Angeles healthcare community and [add] beautifully maintained real estate to our owned portfolio.” The high occupancy rate at these facilities shows that targeting specific populations in certain communities can pay off financially and once this becomes evident to other companies in the industry, purchases of similar assets could increase in frequency as acquisitions in the senior housing space continue throughout the year.
