Senior Living News Wire

Ballard Nursing Center was sold to Resurrection Health Care, a not for profit, that owns six hospitals and six nursing facilities in the Chicago area.

The sale was facilitated by Senior Living Investment Brokerage and was a strategic acquisition that provides specialized acute medical services and care for residents that require ventilators, dialysis, and tracheotomy care.

“Ballard Nursing Center is a unique facility that provides specialty care services and benefited from the implementation of RUGs IV,” said Ryan Saul, Managing Director at Senior Living Investment Brokerage, Inc.  ”Senior Living Investment Brokerage, Inc. was able to procure several offers and achieve one of the highest price per bed  values by matching  a not-for-profit organization that was looking for an opportunity to acquire these types of services.”

According to the company, Resurrection paid $115,183 per bed and had generated multiple offers.

Senior Living said that Based on Ballard’s stellar reputation, this facility will prove to be a profitable compliment to the other two Resurrection facilities in the market.

SKH Subsidiary to Acquire Home Health Care Agency

Skilled Healthcare Group, Inc. (NYSE: SKH) has announced that one of its subsidiaries has agreed to acquire Altura Homecare & Rehab, a home health care agency serving the Albuquerque, New Mexico market. Chris Tapia, Altura’s majority owner and operator since 2009, will continue to manage the business and be active in its operations following the closing. The parties expect the closing to occur in July 2011. Skilled Healthcare expects the transaction to be slightly accretive in 2011.

“The Altura acquisition provides us with a great opportunity to expand the range of services our companies offer patients in the Albuquerque area by welcoming another established and successful home health agency to the Skilled Healthcare family,” said Boyd Hendrickson, Chairman and CEO of Skilled Healthcare Group. “Under Chris’ leadership, Altura has established itself as one of the premier home health agencies in the Albuquerque market, and we look forward to seeing that success continue going forward. We believe the acquisition is an important step in implementing our strategic plan to offer home health and hospice services in markets where we have a strong skilled nursing presence, and will provide growth opportunities for both Altura and our existing Albuquerque skilled nursing and hospice companies.”

Life Care Services to Manage Three Communities in the Carolinas

Life Care Services (LCS) has acquired the management agreements of three senior living communities in the Carolinas previously managed by Banyan Senior Living.  Banyan Senior Living of Greenville, S.C., and the three managed communities reached the decision to assign the communities’ management agreements to Life Care Services effective June 1, 2011. Ken Bolt, founder of Banyan Senior Living in 1987, is now an employee of Life Care Services.  With these three new communities, Life Care Services will now manage 15 Continuing Care Retirement Communities (CCRCs) in the Carolinas

The communities are:

• Covenant Place – Sumter, S.C.
• Heritage Place – Fayetteville, N.C.
• Laurel Crest – West Columbia, S.C.

“We are pleased to provide management services to these three communities,” said Brett Logan, Vice President and Senior Director of Operations Management at Life Care Services. “Life Care Services brings unique services and resources to further enhance the lifestyle experience for residents, and the work experience for employees.  The new communities are a great addition to our strategy of growth in the Southeastern United States”

ServiceTRAC Releases LIVE Experience Survey

ServiceTRAC, Inc. has recently released its first iPad applications designed for skilled nursing facilities.  The application creates a platform in which to gather, process and mine data for quality improvement through easy to use surveys.  Known as the ”LIVE Experience Survey”.  the app has been custom tailored to handle all different types of dexterity levels, vision impairments and even blindness.  Because the survey is digital, questions sizes are fully adjustable and can be auditorally read to the patient if needed. Additionally, answers can be verbally spoken and recorded onto the digital survey without lifting a finger.

“While games like Angry Birds and Farmville are incredibly fun to play, the iPad technology has application beyond what most people see. We hope that by deploying this app more companies will seize the opportunity to look deep into their areas of business and identify applications that can create real change in peoples lives,”  said William Nowell, CEO of ServiceTRAC, Inc.,

Senior Housing Properties Trust Enters New $750 Million Bank Facility

Senior Housing Properties Trust (NYSE: SNH) announced last week that it has entered a new $750 million unsecured revolving credit facility.  The new facility replaces SNH’s previous $550 million unsecured revolving credit facility which had a maturity date of December 31, 2011.  The maturity date of the new facility is June 24, 2015, and includes a borrower’s option to extend the facility for one year to June 24, 2016.  Interest paid on drawings under the new facility is set at LIBOR plus 160 basis points, subject to adjustments based on changes to SNH’s credit ratings.  The new facility also includes a feature under which the maximum borrowing may be increased to up to $1.5 billion in certain circumstances.  The number of participating banks in the new facility increased from 18 to 26 institutions.

The Coronet, a new 150 unit affordable senior housing complex in San Francisco, CA, celebrated its grand opening last week.

The building will provide housing and health services for approximately 225 independent senior citizens in San Francisco’s Richmond district, and was financed in part by a $19.4 million tax credit equity investment from Union Bank.

Developed by BRIDGE Housing in collaboration with the Institute on Aging, the Coronet is a community-based nonprofit serving the region’s senior citizens.  The six-story building was constructed on the site of the former Coronet movie theater, which closed in 2005.

“Union Bank is very pleased to have served as a financial partner for The Coronet,” said Senior Vice President Annette Billingsley, head of Union Bank’s Community Development Finance division.  “The lack of affordable housing in this area hits senior citizens especially hard.  Helping our longtime partner BRIDGE Housing provide 150 affordable apartments, as well as space for the Institute on Aging’s vital services, has been a gratifying opportunity to advance our mission here in the Bay Area and in Union Bank’s home city.”

The Institute on Aging’s Senior Campus, housed in The Coronet, provides a wide range of services to seniors and to disabled adults, including geriatric assessment services, support groups and creative classes.  The facility features an education center and meeting rooms, fully-equipped arts studios and a senior fitness and rehabilitation center, among other resources.

“By integrating these high-quality affordable apartments with the Institute on Aging’s comprehensive, cutting edge services, we are helping approximately 225 seniors maintain their independence as well as their dignity,” said Cynthia Parker, President and CEO of BRIDGE Housing.  “We are grateful to Union Bank, the city of San Francisco and all our financial partners for their critical assistance in turning The Coronet development into a reality.

Construction has begun on a new senior care facility for Tockwotton Home, which is expanding and relocating from Providence to East Providence, Rhode Island. Groundbreaking for the construction comes on the heels of completing financing for the $53.2 million project.

Tockwotton Home, which offers memory care, an assisted living facility, and a skilled nursing home, says the new community of care will enable couples to remain together while receiving different levels and types of support. Plans for the community have been in the works for years, and the nearly 12 acres of land along the East Providence waterfront were purchased in 2004; the facility has been in its current location since 1865.

“In recent years, our ability to adapt to the changing needs of seniors has been constrained by the historic physical structure in which we reside,” says the facility’s executive director, Kevin McKay.  “With a new site, we’ve been able to start from scratch and let needs dictate design.”

The design includes a household model allowing residents to age in place and maintain life-long routines; an improved assisted living residence; a transitional-support household for residents who need some, but not constant, assistance; and a memory-support household which will provide specialized care and therapeutic activities for residents with Alzheimer’s disease or other memory impairments. The new construction will house 156 residents in private apartments.

Funding for the project came from a couple sources. Tockwotton Home contributed $10.5 million of owner equity, some of which was raised from private donors. The remaining $42 million comes from a non-rated, tax-exempt bonds offering by The Rhode Island Health and Educational Building Corporation.

“We’re very fortunate to be able to announce the completion of our financing package for this ambitious, leading-edge project in Rhode Island,” says McKay.  “While the economy has been slowing down in recent years, the demand for quality care for seniors has been accelerating.  Not only will this new residence expand the number of rooms we offer, it will also enhance the individualized services and amenities that each resident will have.”

The construction is expected to add more than 600 jobs to Rhode Island’s economy, and the finished facility will provide 36 permanent health care positions in addition to an existing staff of 65.

Written by Alyssa Gerace

The LTQA summit offered a forum where stakeholders from the government, foundations and provider organizations could define the key characteristics of an innovative community and how organizations could move forward on their own journeys toward becoming one.

AdCare Health Systems Inc. will pay $38.5 million for 15 skilled nursing facilities in four states.

Located in South Carolina, North Carolina, Virginia and Tennessee, the facilities have 1,995 beds and generate an estimated $93 million in gross annualized revenues according to their most recent financials.  AdCare said its annualized run rate is expected to exceed $268 million, an increase of more than 400% over the company’s revenues in 2010.

“This agreement brings the total number of facilities we’ve put under contract to 46 since we began our M&A campaign in the fall of 2009, and is by far our largest transaction to-date,” said Chris Brogdon, AdCare’s vice chairman and chief acquisitions officer. “It represents our first entrance into South Carolina, Virginia, and Tennessee, and expands our presence in North Carolina. The addition of these facilities is in line with our expansion into the Southeast, and will leverage the support staff we’ve already established in the region.”

AdCare continues continues to look for additional acquisitions and said it’s a major focus for the second half of 2011.

“We’re evaluating a number of additional opportunities around our home base in the Midwest as well as in the Southeast,” added Brogdon.

AdCare will purchase two of the facilities, lease nine and manage four. The company plans to fund the transaction with a combination of cash, shares of AdCare common stock and seller notes.

For the first time in eight months, home prices saw a month-over-month increase in April according to the Standard & Poors/Case-Shiller Home Price Indices.

During April, the 10- and 20-City composite indices increased 0.8% and 0.7% respectively, compared with their March 2011 levels. Both indices remain below their April 2010 levels.

“In a welcome shift from recent months, this month is better than last—April’s numbers beat March,” says David M. Blitzer, chairman of the Index Committee at S&P Indices. “However, the seasonally adjusted numbers show that much of the improvement reflects the beginning of the Spring-Summer home buying season. It is much too early to tell if this is a turning point or simply due to some warmer weather.”

Compared to April 2010, the indices show declines of 3.1% and 4%, respectively, with metropolitan statistical areas Charlotte, Chicago, Detroit, Las Vegas, Miami and Tampa seeing new index lows.

Regionally, 10 of the 20 MSAs showed positive monthly changes.

One the whole, the monthly uptick has been detected in other housing indicators as well.

“Other housing statistics show the same trends. Single-family housing starts were up in May, but still well below their 2010 levels and still very close to their 30-year low,” Blitzer said. “Existing home sales rose in May, but are still about 15% below last year’s pace and about 35% below their 2005 pace. …For a real recovery we would need to see several months of increasing home prices, large enough to shift the annual momentum to the positive side.  In short, better news, but still a lot of questions and a long way to go.”

Written by Elizabeth Ecker

Senior Housing Properties Trust (NYSE: SNH), a Real Estate Investment Trust (REIT) that owns assisted-living communities, nursing homes and rehabilitation hospitals said it would sell at least 6.5 million shares on Monday.

Proceeds would be used to reduce the amount due under the company’s revolving credit facility and for general business purposes, which could include funding acquisitions.  Senior Housing has about 142 million shares outstanding.

As of June 24, 2011, the company owns 341 properties located in 37 states and Washington, D.C. with a book value of $4.1 billion before depreciation.  According to the prospectus, ninety-four percent (94%) of its rents come from properties where a majority of the charges are paid from private resources.

The joint bookrunning managers for the offering are Jefferies & Company, Inc., Citi and UBS Investment Bank. The co-lead managers for the offering are Morgan Keegan, Morgan Stanley, RBC Capital Markets and Wells Fargo Securities.

In other SNH news, the company said last week that it entered into a new $750 million unsecured revolving credit facility, which can be increased to up to $1.5 billion in certain circumstances.

On Tuesday, the company said it plans 10 million common shares at a price to the public of $22.50 per share. The settlement of the offering is expected to occur on July 1, 2011.

Harrison Street Real Estate Capital (“HSRE”) has completed its third real estate private equity fund, Harrison Street Real Estate Partners III, L.P. (HSREP III).

The firm said exceeded its original goal of $500 million, receiving $595 million total.  Investors in the fund include U.S and European pension funds, insurance companies, endowments, foundations and family offices.

The Fund already has invested more than 25 percent of the fund’s commitments in 24 real estate assets.  This third fund follows on the momentum of Fund I and Fund II, which raised $208 million and $430 million, respectively. Since the initial fund was launched in August 2006, the firm has raised over $1.2 billion in third party equity capital. The firm does not use a placement agent when raising capital.

The firm puts its investments into the education, healthcare, and senior housing segments of the US real estate market.

HSREP III, LP held its first closing last summer with a goal of raising $500 million and limited the Fund to its hard cap of $600 million.  According to Merrill, the $595 million in equity raised by the firm translates to investment power of over $2.0 billion, when leverage is applied. To date approximately $530 million of gross real estate investments in the fund have been made in 24 properties around the US.

Some of the investments already made include six assisted living alzheimer’s care facilities around the Washington, D.C. market that combined are 90% occupied.  In addition, two senior housing communities in Oregon and Montana totaling 350 private-pay rental units.

A 120-unit senior housing development in an affluent suburb of Houston, TX. Upon completion, in late 2012, this property will offer 85 units of assisted living and 35 units of Alzheimer’s space;

Construction for a $35 million Springpoint Senior Living community is underway in Red Bank, New Jersey, and the need for senior housing is clear as nearly all of the building’s 60 units have already been spoken for.

The construction will be an addition to the already-existent The Atrium, which features luxury continuing care retirement, assisted living and affordable housing communities, and is expected to be completed toward the end of 2012.

“We’re excited to expand our presence here in Red Bank as well as realize the full potential of our beautiful location on the Navesink River,” said Gary T. Puma, President and Chief Executive Officer of Springpoint Senior Living. “The Atrium at Navesink Harbor will stand as a flagship community for Springpoint.”

The new units will consist of 35 one-bedroom and 25 two-bedroom apartments, and most of the apartments were pre-sold by groundbreaking time. Springpoint says it took a conservative approach to ensuring the new building’s success through the pre-sales and conducting extensive market research regarding the project’s viability and attractiveness to seniors.

Springpoint Senior Living owns and operates 25 senior living communities throughout New Jersey, with another one in the works.

Written by Alyssa Gerace

A new Real Estate Investment Trust (REIT) is being launched by Nexus Healthcare in the United Kingdom to acquire property occupied by elderly and specialist care providers reports the Financial Times.

Run by entrepreneur Harry Hyman, the company already manages Primary Health Properties, but plans to launch the new company with a five year plan to build a £1bn portfolio after securing institutional seed capital.

Hyman told the FT that the company plans to focus on the affluent south of England and intends to invest a quarter of the portfolio in private hospitals and the rest in elderly and specialist care property.  Mr Hyman forecast that care providers would continue to perform well operationally, driven by long-term demand from an ageing population.

“There is no healthcare Reit in the UK for secondary or elderly care, even though it is a big sector in countries such as the US. Even after the recent travails of Southern Cross, we think – and so do our investors – that the sale and leaseback model is very attractive in that sector,” Hyman told the Financial Times.

It shouldn’t be a huge surprised investors in the UK see an opportunity to use the REIT structure after companies like Health Care REIT Inc (NYSE:HCN) and HCP Inc (NYSE:HCP) have been so active in the U.S.

Care home braves hostility over flotation (Financial Times)

The United States Court of Appeals for the Sixth Circuit denied HCP’s (NYSE:HCP) request to reconsider a previous decision where a jury ruled it must pay approximately $102 million in damages to Ventas (NYSE: VTR) on Monday.

HCP, a real estate investment trust (REIT) that invests primarily in real estate serving the healthcare industry in the United States, had requested the court to dismiss the case or begin a new trial.  By denying HCP’s rehearing petition, the court makes its prior decision final and said it should proceed to trial on the single issue of punitive damages

“We are gratified that the United States Court of Appeals for the Sixth Circuit has reconfirmed its decision in Ventas’s favor,” said Debra A. Cafaro, Chairman and Chief Executive Officer of Ventas in a statement.

The lawsuit stems from Ventas’ acquisition of Sunrise Senior Living REIT in 2007, where it claims HCP interfered with the transaction.  Prior to the Sixth Circuit ruling, a jury blocked Ventas from seeking punitive damages against HCP for its conduct.

Ventas, Inc., an S&P 500 company, is a leading healthcare real estate investment trust with a diverse portfolio of more than 700 assets in 44 states.

New York City has joined in on a national effort to become more green and sustainable, and the opening of Serviam Gardens, a 243-unit green, affordable housing development for low- and moderate-income seniors in the Bronx, is a step in that direction with its Enterprise Green Communities Criteria (EGCC) adherence. The finished, 158-unit Serviam II, developed by Fordham Bedford Housing Corporation (FBHC), marks the completion of the Bronx-located affordable housing development, which has been constructed in two phases.

Serviam I, with 83 units, was completed in October 2009 and developed by FBHC with the U.S. Department of Housing and Urban Development (HUD) and the NYC Housing Preservation and Development (HPD). Development for both Serviam I and II followed Enterprise Green Communities Criteria, the only national green building criteria for affordable housing, an HPD requirement for affordable housing developers since January 2011. The NYC Housing Development Corporation (HDC) says it is the first city-subsidized affordable housing development to be completed using the criteria, which was created to yield lowered utility costs and increased sustainability as well as benefit the financial stability of both tenants and affordable housing owners.

“Our data shows rising utility costs have increased significantly over the past several years and are a heavy contributor to the cost of living burden many New Yorkers are struggling to keep pace with,” said HPD Deputy Commissioner RuthAnne Visnauskas. “For these reasons we have partnered with Enterprise and now require every new and preserved unit that we assist to adhere to their Green Communities Criteria.”

The construction was developed under NYC’s Mayor Michael Bloomberg’s New Housing Marketplace Plan (NHMP), says HDC. The plan allocates $8.4 billion of financing for 165,000 units of affordable housing meant for 500,000 New Yorkers. By 2014, HDC says, NYC expects to provide financing for more than 30,000 units with energy efficiency and sustainability requirements; it will also certify approximately 40 affordable housing projects each year according to EGCC guidelines.

These green requirements, says HDC, directly support PlaNYC, which is NYC’s four-year-old sustainability plan that will run through 2030. The Plan’s goals include making NYC more “green,” creating housing for nearly a million more New Yorkers, and providing more affordable and sustainable housing.

The total development cost for Serviam I was $20.9 million, and the units are for low-income seniors earning no more than 50% of the HUD Income Limits, or $26,850 for one person; Serviam II’s total development cost was $47.3 milion, and it provides affordable housing for seniors earning 28-80% of the area median income. FBHC developed the $68 million project on land leased from the Ursuline Bedford Park Convent in the Northwest Bronx, says HDC, and its green elements include a green roof to limit storm water impact with a rainwater harvesting system; bamboo flooring; and energy efficient elevators, lighting and appliances.

Written by Alyssa Gerace

The Architecture Billings Index (ABI) continued to slow in May, falling 47.2, a slight decrease from a reading of 47.6 the previous month according to the American Institute of Architects (AIA)

As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending.

This score reflects a continued decrease in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 52.6, down from a mark of 55.0 in April, its lowest level in almost a year and a half.

“Whatever positive momentum that there had been seen in late 2010 and earlier this year has disappeared,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “The broader economy looks to be entering another soft spot, and certainly state budget constraints are adversely affecting the profession’s ability to work on institutional projects. But there is no denying that the prolonged credit freeze from lenders for financing commercial projects is the number one challenge to a recovery for the design and construction industry.”

Key May ABI highlights:

Regional averages: West (49.3), Northeast (47.6), South (47.5), Midwest (45.9)

Sector index breakdown: multi-family residential (53.6), mixed practice (49.1) commercial / industrial (46.5), institutional (44.9)

Project inquiries index: 52.6

The Obama Administration is exploring different ways to provide additional support for rental housing said Jeffrey A. Goldstein, Under Secretary at the Treasury last week.

Speaking before the National Housing Conference’s Policy Summit on Mortgage Finance Reform, Goldstein said targeted approaches could help provide liquidity and capital to affordable rentals and alleviate the problems of low-income households.

“As we wind down the GSEs, maintaining funding to this segment of the market, including through private channels, is critical,” Goldstein said adding that the private market has traditionally underserved multifamily rental properties, choosing to invest in high end developments instead.  Only 32 out of every 100 low-income families have access to adequate rental options, he added.

“We are also exploring how private channels can finance affordable multi-family housing, perhaps with limited, targeted governmental support,” he said.

Goldstein said the administration’s range of options to expand support for lending for multifamily rental properties include reforms such as risk-sharing with private institutions.  Another approach could come from expanding FHA’s capacity to support lending to the multifamily market.

“We will consider a range of reforms, such as risk-sharing with private lenders, to reduce the risk to FHA and the taxpayer, and new programs dedicated to hard-to-reach property segments, including the smaller properties that contain one-third of all rental apartments” he said.

“We support a housing finance market that provides liquidity and capital to support affordable rental options and help alleviate the burdens that many low-income households face,” he said.

While the speech didn’t specifically mention senior housing, any changes in the GSEs or FHA could have a big impact on the industry.  Despite all the talk of winding down the GSEs, Holi Leon, executive VP of PNC Real Estate said her company has yet to see any sign of slowing down from the GSEs in terms of funding senior housing during a webinar from NREI Online,

“Each are looking at deals as aggressively, trying to win the business,” Leon said.  ”[We've seen] no evidence to limit production or step out of the space.”

As far as what the GSEs will look like in the future, Leon said it was still up in the air.  ”What I do know, working on new loans with them showing them new opportunities,” she said.

View a copy of the speech.