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Category: Skilled Nursing

Capital Senior Living Buys Assisted Living Community from Pulliam

Capital Senior Living has purchased assisted living and memory care community Dillon Pointe in Spartanburg, South Carolina, from Pulliam Investment Company. 

The sale was arranged by Cassidy Turley Executive Managing Director Allen McMurtry. 

The property was purchased by a Capital Senior Living Affiliate. It was built in 1996 and was renovated in 2010; it has 55 beds and had near 100% occupancy at the time of sale, according to Cassidy Turley. 

Aviv REIT Acquires Four Skilled Nursing Communities for $20 Million

Aviv REIT Inc. (NYSE: AVIV) acquired four post-acute and long-term care skilled nursing facilities in two separate transactions for $20 million. The facilities are located in Texas and Illinois. 

One of the properties is located in Texas and is triple-net leased to Fundamental Long Term Care, an existing Aviv operator. The three other SNFs are located in Illinois and are operated by another existing Aviv operator, Bridgemark Healthcare, also under a triple-net lease. 

The investments have a blended initial cash yield of 9.9%, annual escalators and initial lease terms of seven and 10 years, respectively, according to the company. 

“Our relationship-oriented growth strategy continues to produce accretive acquisitions, as Fundamental and Bridgemark brought both of these transactions exclusively to us,” said Craig M. Bernfield, chairman and CEO of Aviv. “Fundamental is a new operator relationship for us this year, and with this transaction, they are now our seventh largest operator.”

Aviv Closes Acquisition of $43 Million Senior Housing Portfolio

Aviv REIT acquired two long term care properties in two separate transactions totaling $43 million. One of the properties is located in Minnesota and includes a post-acute and long-term care skilled nursing facility, an assisted living facility and an independent living facility. The second property is a long term care skilled nursing center located in Texas. 

The Minnesota campus is triple-net leased to new Aviv operator Mission Health Communities which operates 15 facilities in four states. The Texas property is triple-net leased to existing Aviv operator Trinity Healthcare, which operates four facilities in Texas.

The investments have a blended initial cash yield of 9.7%, annual escalators and initial lease terms of 10 years, according to Aviv REIT. 

“We are off to a great start in 2014 and our pipeline is very strong,” said Craig M. Bernfield, chairman and CEO of Aviv. “We are excited that we are able to continue to convert our pipeline into accretive acquisitions with attractive yields.” 

New Buyer Enters Senior Housing Market with $5.6 Million Purchase

New senior living market entrant Memory Care America purchased 50-unit assisted living community Windsor Place in Naples, Florida for $5.6 million from a partnership operated by Sovran Management. The transaction was facilitated by Senior Living Investment Brokerage and is subject to Department of Housing and Urban Development insured financing assumed by the buyer at the close of escrow. 

The property will be managed by Superior Residences of Perry, Florida. It has a cap rate of 3.7% and a census of 80%; which the operator plans to improve through a dedicated focus on memory care services. 

Care One REIT Sells SNF to Florida Reliance Properties for $12 Million 

Care One REIT sold skilled nursing facility the Woods of Manatee Springs Nursing Center in Bradenton, Florida for $12.2 million. The buyer was Florida Reliance Properties, which secured an interim loan through Monroe & Giordano used to execute a purchase option and position the property for eventual permanent Department of Housing and Urban Development financing. 

The 72,000 square foot property is set on nearly 13 acres; it contains 120 units including eight private rooms with total occupancy at 89%. Payor mix among residents is 2.5% private, 21% Medicare, 67% Medicaid and 9.5% other, according to the companies. The facility was built in 1985 with a major renovation in 1995 and additional planned renovations following the closing.

The property includes a resident activity room, therapy/gym room, hydro therapy, swimming pool, dining room and pond adjacent to the site.

The Woods of Manatee Springs will continue to operate the property under a new lease with the new owner. 

Summit Healthcare REIT Completes First Acquisition Under New Name

Summit Healthcare REIT, Inc., formerly known as Cornerstone Core Properties REIT has completed its first acquisition under the new name. The REIT acquired a 40-unit assisted living facility in Redding, California for $3.5 million in late December. The facility was built in 1992. 

The community, at 26,000 square feet, has been triple-net leased to a Compass Senior Living affiliate, the new operator of the community, pursuant to a 10-year term, according to Summit. 

“We are very pleased to start a relationship with Compass and confident we will experience a lot of success together in the future” said Kent Eikanas, President and Chief Operating Officer of Summit Healthcare.

NHI Completes Sale of 3 Texas Skilled Nursing Facilities for $18.5 Million 

National Health Investors, Inc. (NYSE:NHI) has complete the sale of 3 skilled nursing facilities in Texas to an affiliate of Fundamental Long Term Care Holdings, LLC for $18,491,000.

The facilities include a total of 484 beds, and have an average age of 41 years.

According to NHI, cash rent to NHI for 2013 for the three communities was $2.1 million after allocations under the amended master lease. NHI plans to defer recognition of any tax gain on the sale and continues to lease 4 skilled nursing facilities to Fundamental. 

Senior Living Investment Brokerage Tallies Strong 2013 Transaction Volume

Senior Living Investment Brokerage has announced its full-year tally of senior housing and skilled nursing deals for 2014 for a total of 55 transactions. 

The company expects a strong pace to continue in 2014, with a favorable sellers’ environment. 

“The continued effect of the low interest rate environment has had a major impact on market pricing for seniors housing assets throughout the past year,” said the firm. “While REITs and private equity investment funds have been dominant players in the multiple-property portfolio sales, low interest rates, lack of inventory and the aging demographics have created aggressive pricing for individual property transactions as well. We experienced a significant increase in the average price per unit for assisted living facilities and price per bed for skilled nursing facilities throughout 2013.”

FNR Buys Indiana Skilled Nursing Facility for $13 Million 

FNR Healthcare Group, a Chicago-based private equity firm, has acquired Fort Wayne, Indiana-based Woodview Healthcare, a skilled nursing facility, for $13 million. 

The transaction was facilitated by Senior Living Investment Brokerage. 

The community contains 128 beds and 37,000 in square footage including a 1,500 square foot therapy gym. The property was built in 1970 and has benefited from ongoing cap-ex investment. 

The seller was an assisted living owner/operator who had purchased the facility because of its location next to his assisted living community. He sold Woodview after selling his senior housing portfolio, according to Senior Living Investment Brokerage. 

FNR is partnering with a regional operator to manage the skilled nursing facility. Woodview currently has an 84% occupancy rate with a payor mix of 43% private pay; 20% on Medicaid; and the remaining 37% Medicare.  — EE

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Grandbridge Seniors Housing Group Facilitates Acquisition Financing

Grandbridge’s Seniors Housing and Healthcare Finance Team facilitated bridge financing for the joint venture between Focus Healthcare Partners and Artemis Real Estate Partners on the 192-unit Skagit Valley Senior Village in Burlington, Wash. 

As the project had been purchased without debt, the loan allowed the joint venture to recycle a significant portion of its cash equity. Grandbridge was also able to meet the borrower’s tight time line by closing this transaction less than 45 days from application.

Nonrecourse bridge financing was facilitated by Grandbridge through its proprietary lending platform, BB&T Real Estate Funding, LLC.

Ziegler Closes $13 Million Financing for Senior Living Not-for-Profit

Ziegler recently closed the $13.3 million Cal-Mortgage insured, fixed-rate Series 2013AB Bond issue for Poway RHF Housing, Inc., a California not-for-profit incorporated in 1991 to serve independent seniors who wish to reside in a retirement community.

Poway RHF opened The Gateway, a 134-unit rental independent living facility in Poway, Calif., in 1998. In 2000, it began construction of Gateway Gardens, a 66-unit assisted living facility on an adjacent parcel of land. Gateway Gardens opened in 2002 and has an agreement with a local unaffiliated hospital giving residents access to skilled nursing should the need arise. 

The Series 2013 Bonds, rated ‘A’ by Standard and Poor’s and composed of $8.5 million of taxable Series 2013A and $4.8 million of tax-exempt Series 2013 B Bonds, are being issued to currently refund the Series 2000A and 2000B Bonds which have $8,455,000 and $5,190,000 outstanding, respectively; establish a debt service reserve fund; and pay cost of issuance for the Series 2013 Bonds and the refunding of the prior bonds. 

Cambridge Arranges $65M Loan for Eight Senior Care Properties

Cambridge Realty Capital Companies reports arranging a $65 million conventional mortgage loan to refinance an 827-bed portfolio of eight nursing home properties owned or operated by Premier Health care of Cincinnati, Ohio.

“This was an exceptionally complicated financing that included properties that were owned and operated by Premier, owned by Premier but leased by others, or operated by Premier under a lease agreement with a third-party landlord,” said Cambridge chairman and CEO Jeff Davis. ”Many changes were needed along the way to accommodate a tight closing schedule. Complicating the process were constraints on some payoff requirements.” 

The financing included a $57.5 million first mortgage loan for eight separate properties plus a $7.5 million working capital loan for the portfolio. Five properties were located in Cincinnati, along with one each in Springfield, Dayton, and Columbus Ohio. 

Capital for the transaction was provided by GE Capital.

Cambridge: Q3 Loan Origination Requests Continue to Soar

Borrower interest remained high during the third quarter of the year for Cambridge Realty Capital Companies, which reviewed 68 loan origination requests totaling $1.02 billion for the three month period, the firm reports. This compares with 57 requests totaling $858.7 million during the same quarter last year.

September in particular was a red-letter month, as Cambridge processed 20 loan origination requests totaling $316.7 million compared to 15 requests totaling $113.9 million in September 2012.

“One reason the dollar volume of deals we’re looking at was up so sharply in September involves a strategy shift that has Cambridge taking a fresh look at new construction projects,” Cambridge chairman and CEO Jeffrey Davis said.

While lenders typically only close on a relatively small percentage of loan origination requests made, Davis continued, Cambridge tracks this data as an indication of market direction.

“We remain bullish on the long-term outlook for the industry,” he said.

Meta Housing Corporation Secures Financing for 2 Senior Apartments

Meta Housing Corporation recently reported securing financing to break ground on two affordable senior housing developments in Los Angeles County, totaling 116 units.

The project cost for the two communities totals nearly $35 million, according to Meta Housing president John Huskey. 

“The need for affordable housing continues to grow throughout the nation, and is especially prevalent in metro areas such as Los Angeles and Long Beach,” explained Huskey. “Despite the dissolution of the redevelopment agencies, which substantially affected the way in which affordable projects can be financed, we have succeeded in discovering new ways to finance our affordable family and senior communities.”

Meta Housing was able to secure tax credits for both projects, Metro @ Compton, a planned 75-unit, $19.5 million affordable senior apartment community in Compton, Calif., and Long Beach & 21st Apartments, a planned 41-unit, $15 million affordable senior housing community in Long Beach.

Both projects are expected to break ground within the next five months and along with another multifamily project will bring Meta Housing Corporation’s current portfolio of projects under development to seven. The company also has 14 other projects in the pre-development phase.

“We are actively pursuing new projects throughout California, with an emphasis on urban markets and dense suburban markets, in order to continue to build apartment communities that deliver pride and satisfaction to the Cities we serve, and the partners with whom we work,” said Huskey.

Cushman & Wakefield Arranges $44.6M Development Debt, Equity

Cushman & Wakefield’s senior housing capital markets group, a division within Cushman & Wakefield Equity, Debt & Structured Finance, has arranged the capitalization of two development projects for LCB Senior Living.

Capital raised for both projects totaled $44.6 million. Both transactions were financed with construction loans from M&T Bank and with joint venture equity from Prudential Real Estate Investors.

The first of these two closings occurred when LCB closed on construction and development financing for The Residence at South Windsor Farms, an 80-unit independent, assisted and memory care community located in South Windsor.

In October, LCB closed on construction and development financing for The Residence at Brookside, a planned 74-unit independent, assisted and memory care community located in Avon. The community is slated to open in late 2014.

“We are finding that development capital for senior housing, with regard to both equity and debt, continues to have a strong appetite for partnerships with experienced owner/operators,” said Richard Swartz, managing director at Cushman & Wakefield. 

Skilled Healthcare Group Gets $8M HUD Loan for SNF

Skilled Healthcare Group, Inc. (NYSE: SKH) recently announced the funding of a $7.8 million loan insured by the Federal Housing Administration and secured by a skilled nursing facility.

The FHA-insured loan has an all in interest rate of approximately 5.3% and an amortization term of 30 years. The net loan proceeds of $6.8 million have been used to pay down outstanding term debt in Skilled Healthcare Group’s senior secured credit facility, which has a maturity date of April 2016 and an all in interest rate of approximately 7.8%. Skilled Healthcare Group has now closed 10 FHA-insured loans totaling $87.6 million.

Contemporary Healthcare Capital Provides $1.3M Loan for New SNF

Contemporary Healthcare Capital, LLC has provided a $1,300,000 leasehold term loan to a newly constructed 142-bed licensed skilled nursing facility with 81 Medicaid-eligible beds located in Fort Worth, Texas.

The funds will be used for the start-up working capital and to pay closing costs. 

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Senior living providers must expand outside the bricks and mortar and create a full care continuum if they want to be successful, long-term, in a changing healthcare system that’s substantially shifting where care is provided. 

Entitlement reform is poised to have a huge impact on post-acute providers, including those in senior living, agreed Scott Gottlieb, MD, a resident fellow at the American Enterprise Institute, and Gov. Howard Dean, MD, former presidential candidate and DNC chairman, both panelists of the National Investment Center (NIC) for the Seniors Housing & Care Industry’s 2013 Annual Conference. 

Programs introduced in the Affordable Care Act are testing bundled payment and managed care systems as opposed to the current fee-for-service payment model.

“I think we need to get rid of fee-for-service medicine,” Dean said. “Every incentive in the medical system right now is when people are really sick. If you paid by the patient, the whole system would be about taking care of problems early.” 

That would directly affect the long-term care environment, panel moderator Dan Mendelson, founder and CEO of Avalere Health, LLC, pointed out, as its revenue stream comes from a fee-for-service model that the nation’s healthcare system is going down the path of abolishing. 

The biggest piece of advice Gottlieb had for post-acute care providers in light of entitlement reforms: offer a continuum of care.

“Have a suite of options,” he said.

“We have to understand that institutional care is going to be reduced,” Dean said. “We have to get into home care; we have to get into hospice care; we have to get into assisted living. We need some federal changes.”

Those changes, he said, need to occur in what care settings federal programs cover.

“We need some of the programs that will only pay for beds [in a hospital or nursing home] be willing to pay for other things,” said Dean.

Hospice is an “enormous” growth area that senior living providers should figure out how to harness, Dean and Gottlieb agreed. 

“I think hospice is going to grow very rapidly, not because it makes money—although it does—but because it is time to turn the dying process back to the families and the patient,” Dean said, calling the industry the “wild, wild west.” 

Between 2005 and 2011, Medicare spending on hospice care for residents in nursing homes skyrocketed 70%, according to a 2011 annual report from the Department of Health and Human Services, and the industry has drawn increased scrutiny as a federal fraud task force has cracked down on some hospice providers accused of defrauding Medicare. 

“It could get hurt in Washington, because of the perception it’s been gamed,” Gottlieb said. 

But despite a potential “rough patch,” Dean said, there’s plenty of room in private pay hospice. 

Dean also said he sees opportunities for companies in “high end care,” and he predicts some large companies will get into the retirement home business, even though its penetration rate is a “relatively limited portion of the population.”

Even though there’s a movement toward shifting patients downstream, institutional facilities will be far from obsolete as there will always be people who need them. Federal payment structures often force people into bricks and mortar options as Medicaid is less available for home care, he added. 

“The growth strategy has to be to expand services to encompass the full spectrum,” Dean said. “It’s not just going to be bricks and mortar; you have to offer a different range of services.”

The companies who get that balance right are going to be the ones who make “plenty of money,” he said, and the companies that don’t are going to be the ones who get absorbed into someone else.

Additional benefits of ancillary services can be found it the marketing proposition it contains, allowing providers to extend into the community and potentially “convert” home care patients as they transition into bricks and mortar.

“If you’re admitting someone at the lowest level—home care—you’ve got that patient in your system,” Dean said. 

Written by Alyssa Gerace

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Increased nurse staffing levels could be the key to helping hospitals avoid reimbursement penalties for avoidable readmissions, suggests a new study tying rehospitalizations of Medicare patients to staffing ratios. 

The research, published in the October Health Affairs journal, studied Medicare beneficiaries who had suffered heart attacks, heart failure, or pneumonia and were readmitted at more than 2,800 hospitals in conjunction with those hospitals’  nurse staffing levels.

Hospitals with higher nurse-to-patient ratios had 25% lower odds of being penalized for readmissions, researchers at the University of Pennsylvania found, compared to those with lower nurse staffing ratios.

In fiscal year 2013, hospitals were fined about $280 million in penalties for avoidable readmissions. 

For each additional nurse hour per patient day, the hospital gained a 10% lower odds of receiving penalties from the Affordable Care Act’s Hospital Readmissions Program, the researchers estimated. 

“Our findings highlight a component of the hospital care delivery system that can be targeted to limit hospitals’ exposure to readmissions penalties while improving patient outcomes,” the authors wrote. “By focusing on a system factor such as nurse staffing, administrators may be able to address multiple quality issues while reducing their likelihood of penalty for excess readmissions.”

Nurses are responsible for many activities believed to reduce preventable readmissions, such as care coordination post-discharge, overseeing in-hospital care, and planning patients’ discharge from the hospital and post-discharge medication routine. 

While it’s intuitive that adequate staffing and resources would help readmission rates decline, the researchers say hospitals should take note of their findings.

“This study strongly supports the idea that nurse staffing is one key component of healthcare delivery that hospitals can address to both improve patient outcomes and reduce the likelihood of being penalized for excessive readmissions.”

Access the full study.  

Written by Alyssa Gerace

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Mainstreet is counting on baby boomers to revolt against existing nursing home options for short-term skilled nursing or rehabilitation stays, and bolstered by a recent survey’s results, it continues to develop a high-end, hotel-inspired product. 

Since 2002, the investment company has built, acquired, or is in the process of developing nearly 50 hospitality-infused, high-end assisted living and rehab facilities across the country and in Canada. Mainstreet, affiliated with HealthLease Properties REIT (TSX.UN:HLP), recently got confirmation for its hotel-inspired strategy after surveying boomers on their retirement living expectations and preferences. 

America’s Research Group conducted the survey, which tallied 1,000 qualified responses nationally that proportionally represented each region of the country. Boomers were polled on topics including health concerns, finances, retirement, and senior living. 

It’s no secret among the senior living and care industry that most older adults don’t want to go to a nursing home, and rather than change that mindset, Mainstreet is pursuing a strategy to build facilities that provide more enjoyable short-term stays.

“We know 90% of people want to be at home, as long as possible. Our entire model is focused on getting them well and sending them home,” says Zeke Turner, CEO of Mainstreet. “We know people will not downsize and won’t choose to move into a [senior living] property. Boomers want nothing to do with that. But when they have a need, they want to be taken care of, be rehabbed, and get sent home.” 

Only one in four respondents said they expected to move from their current home when they retire, and 81% said they didn’t want to go to a nursing home. Another 25% said they believed they would eventually be “forced” to live in a healthcare assisted living facility. 

However, 80% said they would consider a short-term stay in a hotel-like property for rehabilitation or therapy—Mainstreet’s wheelhouse. A vast majority of people utilizing Mainstreet facilities only stay for around 18-25 days before they move home, Turner says. Most units (around 90%) are private, with each building featuring hospitality-centered design, restaurant-style dining, social gathering areas such as movie theaters, pubs, and internet cafes, and therapy and wellness areas. 

More than one in three boomers surveyed named “loss of privacy” as the biggest barrier for them in considering senior living. Still, two in three indicated they’d like to retire and then live with others who have similar interests. 

Another preference highlighted in the survey: a desire among boomers to remain in their communities, something 30% of respondents said they would do if they had to move from their home. 

“We’re focused on where the baby boomers are today, where people want to get their care,” says Turner. “We’re making our properties part of communities, rather than isolating them.”

One of the biggest barriers to that, according to him, is the state regulatory environment and availability of certificates of need. 

“For some bizarre reason, states continue to restrict new development of senior care,” he says. “The biggest thing [is getting] licensed.”

Even though Mainstreet’s various facility designs could go in any location, whether rural, urban, or suburban, Turner says, only about half of states allow for new product in senior care. Of those, only about a quarter allow for new construction in the space without having to cut through “a ton” of red tape. 

“It has to change,” Turner says of skilled nursing product and the regulatory environment. “Consumers themselves will revolt. People are saying they won’t go to these [older] properties, and it’s the only option available… We haven’t hit the tipping point yet.” 

Written by Alyssa Gerace

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A California-based laboratory and radiology company will pay $17.5 million for falsely billing Medicare and Medi-Cal, the state’s Medicaid program, by charging skilled nursing facilities discounted rates for inpatient services in exchange for outpatient referrals. 

The payment will settle allegations that Kan-Di-Ki LLC, dba Diagnostic Laboratories and Radiology, violated federal and state False Claims Acts by paying kickbacks for referral of mobile lab and radiology services for which it sought federal and state reimbursement, says the Department of Justice. 

“This settlement demonstrates the Department of Justice’s continuing efforts to protect public funds,” said Stuart F. Delery, Assistant Attorney General for the Civil Division.  “We will continue to work with our state partners to recover misspent monies from companies that abuse government health care programs.”

Medicare reimburses inpatient and outpatient services differently, and Diagnostic Labs allegedly charged skilled nursing facilities in California discounted rates for inpatient services in exchange for those facilities to refer outpatient business to the lab and radiology company. 

Outpatient services are reimbursed on a per-episode basis by Medicare, while the federal program pays for inpatient services on a fixed rate based on the patient’s diagnosis, regardless of what services have been provided.

Diagnostic Labs’ scheme helped participating skilled nursing facilities to maximize the profit earned for providing inpatient services as they were being charged less for lab and radiology services. Then, Diagnostic Labs was able to access a “steady stream lucrative outpatient referrals,” says the Justice Department, that could be directly billed to Medicare and Medi-Cal. 

The nearly $18 million settlement resolves a lawsuit filed by former Diagnostic Lab employees, Jon Pasqua and Jeff Hauser, under the whistleblower provisions of the federal and state False Claims Acts. The two former employees will receive nearly $3.8 million as their share of the federal government’s recovery. 

Written by Alyssa Gerace

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Washington Trust Finances $5 Million ALF

Washington Trust’s Commercial Real Estate Group provided $5,000,000 in construction financing to Scandinavian Home, Inc. for a 2,000 square feet addition to an assisted living facility in Cranston, RI as well as renovations to existing facilities. Founded in 1930, Scandinavian Home is a non-profit community located in the Edgewood section of Cranston, Rhode Island. The facility offers Assisted Living Community and a Skilled Nursing & Rehabilitation Center.

“The Scandinavian Home has provided quality care for more than 80 years and this expansion will help them continue their fine services for years to come,” said Joseph J. MarcAurele, Washington Trust Chairman, President and CEO.

Washington Trust’s Commercial Real Estate Group provides commercial real estate mortgages for the construction, refinancing, or purchasing of investment real estate projects. Financing ranges in size from several hundred thousand dollars up to multi-million dollar projects. For more information, contact Joe Confessore, Vice President and Team Leader, Commercial Lending, 401-348-1439 or 1-800-475-2265 ext. 1439.

Founded in 1800, Washington Trust is one of New England’s premier financial services companies, providing commercial banking, personal banking, mortgage banking, and wealth management services to individuals and institutions throughout the region. Our Commercial Banking Group offers a full line of commercial and industrial lending, commercial real estate, and cash management services to borrowers throughout the Northeast. Our team of experienced professionals are dedicated to providing customized, comprehensive financing and personalized services. The Washington Trust Company is a subsidiary of Washington Trust Bancorp, Inc. (NASDAQ Global Select, symbol: WASH).

Cambridge Closes $3.7 Million Loan for Senior Care Facility

Cambridge Realty Capital Companies has closed a $3.7 million loan for Metropolis Nursing and Rehabilitation Center, a 103-bed skilled nursing facility in Metropolis, Ill.

The fully-amortized, 30-year term mortgage was arranged through the HUD Section 232/223(a)(7) refinance program and was underwritten by Cambridge Realty Capital Ltd. of Illinois with an undisclosed interest rate.  

Berkeley Point Capital Closes $7.4 Million Loan for Ore. Memory Care Center 

Berkeley Point recently closed the $7.37 million refinancing of Washington Gardens Memory Care, a 48-unit Alzheimer’s care facility located in Tigard, Ore. 

The cash-out refinancing was structured as a fixed-rate Freddie Mac 20-year loan.

Seabold Construction Co. developed the community, which opened in 2011. It is operated by Frontier Management, LLC.

Doug Harper, Director at Berkeley Point, let the team to structure the Freddie Mac financing.  

Love Funding Secures $11.6 Million in Loan for Two Mo. SNFs

Love Funding recently announced the closing of two refinance loans totaling $11.6 million for skilled nursing facilities in Missouri that share the same management team.

The properties are Pillars of North County Health and Rehabilitation Center, a 120-bed facility in Florissant, and Westwood Hills Healthcare Center, a 132-bed facility in Poplar Bluff. Both facilities are managed by Wellington Management Corp., which also operates two other skilled nursing facilities in Illinois.

Robyn Cunningham, a senior director at Love Funding out of the firm’s St. Louis office, together with director Adrian Hartman, secured the two new loans through the HUD Section 232/223(a)(7) LEAN loan insurance program.

Using the program helped the owners lock in low, fixed-rate loans for the remainder of the current 35-year terms on the existing loans. Added up, the refinancing will generate nearly $150,000 in annual debt service savings combined. 

Last month, Cunningham and Hartman closed three other FHA loans totaling nearly $25 million, including a construction-to-permanent loan for a new market-rate apartment community in Lincoln, Nebraska, and refinance loans for market-rate apartment complexes in Chicago and Laurinburg, N.C.

Love Funding Closes $25.9 Million Financing for Mich. Senior Community

Love Funding, one of the nation’s leading providers of FHA multifamily and healthcare financing, announced the closing of a $25.9 million loan refinancing for Windemere Park, a senior community in Warren, Michigan.

Love Funding Midwest Regional Director Bruce Gerhart secured the financing through the U.S. Department of Housing and Urban Development’s 232/223(f) loan program. The program provides loan insurance to support the refinance or purchase of healthcare projects that are more than three years old and don’t require substantial rehabilitation.

The property’s owners will use part of the proceeds from the refinancing to convert three floors of the facility’s six-story independent living building to assisted living and skilled nursing. The renovated property will have a projected total of 66 independent living beds, 120 assisted living beds and 92 skilled nursing beds.

Cambridge Closes $17.6 Million Loan for Chicago Nursing Home

Cambridge Realty Capital Companies has closed on a $17.6 million loan to refinance Bryn Mawr Care, a 174-bed intermediate care nursing home in Chicago.

The fully-amortized, 31.6-year term loan was arranged for the borrower using the HUD Section 232/223(a)(7) funding program and was underwritten by Cambridge Realty Capital Ltd. of Illinois.

Cambridge Closes $4.2 Million Loan for La. Senior Care Center

Cambridge Realty Capital Companies has closed on a $4.2 million loan to refinance Holly Hill Nursing and Rehabilitation Center, a 120-bed skilled care nursing home in Sulphur, La.

The fully-amortized, 30-year term loan was arranged for the borrower using the HUD Section 232/Section 223(f) funding program and was underwritten by Cambridge Realty Capital Ltd. of Illinois.

U.S. Bank & InnovAge Close $22.4 Million Financing for New Construction

U.S. Bank and InnovAge have closed on a $22.4 million financing package that paves the way for the construction of InnovAge Senior Housing-Thornton, a 72-unit senior housing apartment building in Thornton, approximately eight miles north of Denver. Development of the project is currently underway. The property will open by June 2014.

“The senior population in Thornton is growing rapidly, outpacing growth in both the Denver metropolitan area and across the country,” said Hassan Salem, Denver market president for U.S. Bank. “InnovAge Senior Housing-Thornton will help fill a void of limited housing that targets seniors, while fostering independent living in a community environment.”

U.S. Bank’s commitment to the project includes more than $9.6 million of Low-Income Housing Tax Credit (LIHTC) equity through its community investment subsidiary U.S. Bancorp Community Development Corporation (USBCDC) and more than $12.8 million of loans, most of which is bridging the LIHTC equity during construction. LIHTCs, which were allocated by the Colorado Housing and Finance Authority and are being capitalized by USBCDC, subsidize the cost of the development, allowing the housing units to be rented at below-market, affordable rates to eligible seniors.

“We’re dedicated to making personalized senior care decisions simple and affordable,” said Maureen Hewitt, chief executive officer of InnovAge. “Combining our existing healthcare, home care and support services with affordable housing options increases our ability to help aging adults continue to live in their communities with dignity and independence. We appreciate U.S. Bank’s support of our efforts.”

SNH Extends Term, Reduces Rates & Fees on Credit Facility

Senior Housing Properties Trust (NYSE: SNH) today announced that it has amended its existing $750 million unsecured revolving credit facility.

Prior to the amendment, SNH’s credit facility had a maturity date of June 24, 2015 and interest paid on drawings was LIBOR plus 160 basis points, subject to adjustments based on changes to SNH’s credit ratings. The maturity date of the amended credit facility is extended to January 15, 2018 and interest paid on drawings is reduced to LIBOR plus 130 basis points, subject to adjustments based on changes to SNH’s credit ratings. In addition, the facility fee was reduced from 35 basis points to 30 basis points per annum on the total amounts of lending commitments.

The amended credit facility includes a borrower’s option to further extend the facility for an additional one year to January 15, 2019. In addition, the amended facility also includes a feature under which maximum borrowings may be increased up to $1.5 billion in certain circumstances.

Wells Fargo Securities, LLC, RBC Capital Markets and Citigroup Global Markets Inc. served as Joint Lead Arrangers and Joint Lead Bookrunners for the amended credit facility. More than 25 banks are participating in the amended credit facility. 

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Care Investment Trust Closes Acquisition of 2 Senior Housing Assets

Care Investment Trust LLC, a subsidiary of Tiptree Financial Inc. (NASDAQ:TIPT) that focuses on senior housing real estate investment, and privately-held senior housing owner and operator Premier Senior Living, L.L.C., recently announced the closing of a previously announced acquisition of two senior housing facilities located in Baldwinsville and Geneva, New York for an aggregate of $21.9 million.

Premier will manage the two properties under a triple-net master lease with an initial 12-year term and two renewal options of five years each. Occupancy across the newly acquired, 131-bed portfolio was approximately 97% as of July 2013. 

“Care is pleased to be working with Premier Senior Living, an experienced operator in the senior housing sector,” said Torey Riso, Jr., President and CEO of Care. “We sincerely hope that this will be the start of a long-lasting, mutually beneficial relationship between our growing organizations.”

Premier currently operates other assisted living and memory care facilities in New York, Ohio, and Florida. 

“We sourced this opportunity through a 25-year relationship with the sellers and we are delighted to have successfully completed our first, of what we hope will be many transactions with Care,” said Wayne Kaplan, Co-founder and Managing Member of Premier. 

Housing Authority Approved to Issue $12 Million of Bonds for Senior Housing

The Canton Housing Authority has received approval from the Canton City Council to issue $12 million in bonds to Canton Cove Properties to develop a senior living community in the city, reports the Cherokee Tribune. 

The city council voted 5-0 to approve the issuance, which will provide the majority of funding for the $13.1 million project, a 79-unit assisted living and memory care community off Reinhardt College Parkway in Georgia. 

The Canton Housing Authority will only be the issuer of the bonds, with no liability for payments if the developer stops making them. Read more

Diversicare Completes Disposition of Arkansas Senior Care Portfolio

Diversicare Healthcare Services Inc. (NASDAQ:DVCR) has completed a previously disclosed disposition of 11 skilled nursing facilities in Arkansas, effective Sept. 1. The transaction was completed through amending Diversicare’s existing master lease with the properties’ owner, Omega Healthcare Investors, Inc. (NYSE:OHI). 

 ”The decision to exit Arkansas after 20 years was not one that we took lightly. These facilities were staffed with, and managed by, a dedicated group of caregivers committed to providing high quality services to the patients and residents we served,” said Kelly J. Gill, president and CEO of Diversicare. “We believe this transaction demonstrates our continued execution of our strategic portfolio management efforts and further evidences our commitment to the strategic plan we embarked upon nearly three years ago.”

Omega has not announced which operator has assumed the leases for the Arkansas properties. 

Clearview Capital Completes Expands Senior Care Inc. Empire with 11th Acquisition 

Active Day/Senior Care, Inc. a portfolio company of Clearview Capital, LLC, has completed the acquisition of Guardian Programs Adult Medical Day Care of Glassboro, N.J. in a transaction that closed on June 20.

Active Day/Senior Care is an adult day health services provider with 79 centers in eleven states. Designed to be a cost effective alternative to home health services, nursing homes and assisted living facilities, the company’s centers offer a daytime program of nursing care, social services, meals and recreational activities to elderly and disabled adults. 

The transaction is the eleventh add-on acquisition that Active Day/Senior Care has made since Clearview Capital’s initial investment in the Company in late 2005. The company announced its plans to make additional acquisitions in the future both within its current footprint and in new markets.

Pacifica Companies Acquires Santa Fe Assisted Living Community

San Diego-based Pacifica Companies recently acquired an assisted living and memory care community in Santa Fe, New Mexico, after buying the property’s debt and pursuing foreclosure earlier in 2013. 

Rosemont Assisted Living Community of Santa Fe will now be managed by Pacifica Senior Living of San Diego, the management company’s vice president of operations told residents and their families in an August letter.

Pacifica is a privately-held real estate investment firm that owns 41 senior living communities throughout the United States. In January, Pacifica Rosemont filed a foreclosure complaint against the Rosemont community for defaulting on $7 million of debt that Pacifica had acquired from The Federal Loan Mortgage Co. 

Centura Health to Sell Senior Living Community to Frontline

Frontline Management is in talks to acquire Villa Pueblo Senior Living Community in a deal expected to close during the fourth quarter. 

The 14-story senior living community includes independent living, assisted living, and skilled nursing units. 

Villa Pueblo’s current operator is the Sisters of Charities Health Care System. Centura is a healthcare system formed by the Sisters of Charities Health Care System and Catholic Health Initiatives. Frontline Management is a management, development, and consulting services firm specializing in senior housing.

Centura was represented by Evans Senior Investments. 

Azura Living Buys Colo. Memory Care Community

Azura Living announced on its website the July 1 acquisition of Metzler Memory Care in Castle Rock, a 48-unit memory care community in Colorado.

The property, renamed Azura Memory Care of Castle Rock, was sold by a local real estate owner who has previously built another senior housing property that he sold in 2012. He was represented by Evans Senior Investments. 

Azura Living also operates Azura Rehabilitation Suites in Lakewood, a short-term rehabilitation-focused skilled nursing facility, along with 14 memory care properties in Wisconsin. 

Aviv REIT Closes $3.5 Million SNF Acquisition

Aviv REIT, Inc. (NYSE: AVIV) announced recently it has acquired a post-acute and long-term care skilled nursing facility Texas for $3.5 million. The property is triple-net leased to Trinity Healthcare, LLC, an existing Aviv tenant.

Trinity, a skilled nursing facility operator, currently operates three other facilities in Texas, all of which are leased from Aviv. The triple-net lease has an initial cash yield of 11.00%, initial lease term of 10 years, and an annual compounded escalator based on CPI.

“This is our third attractive acquisition with Trinity in less than a year and we are committed to working collaboratively with Trinity to help grow its business,” said Craig M. Bernfield, Chairman and CEO of Aviv, in a statement. “Trinity sourced this acquisition and brought it to us because of our strong relationship with them. Our ability to cultivate strong relationships with operators is key to providing us ongoing opportunities to grow our business.”

Health Care REIT Completes Triple Net Lease with Emeritus

Health Care REIT, Inc. (NYSE:HCN) announced last week that the company completed its previously-announced triple net lease transaction with Emeritus Corp. (NYSE:ESC). Health Care REIT entered into a long-term, triple net lease with Emeritus on a portfolio of 38 Class A senior housing communities previously owned in an 80/20 joint venture between Health Care REIT and Merrill Gardens. As part of the transaction, Health Care REIT acquired Merrill Gardens’ 20% equity interest in the joint venture for $173 million, which now includes pro rata mortgage debt of $74 million.

Capital Senior Living to Close Illinois SNF

Capital Senior Living (NYSE:CSU) is closing one of its skilled nursing facilities in Illinois according to a notice filed with the state last Wednesday, reports the Post-Tribune. 

Town Centre Health Care, in Merrillville, Ill., includes a 120-bed skilled nursing facility that CSU plans to close on November 4, although the operator said in the filing it will continue to manage the community’s independent and assisted living units.

The skilled nursing facility’s occupancy was not disclosed. 

Wedgwood Apartments LLP Sells Texas Senior Complex

Wedgwood Apartments LLP of Centennial, Colo. recently sold a San Antonio senior apartment complex, according to the local Business Journal.

The high-rise community has 301 units comprised of studio, one, and two-bedroom apartments for 55+ adults. On-site amenities include a beauty salon, fitness facilities, a restaurant, and a game room.

The sale price was not disclosed, nor was the seller, described only as an out-of-state investor by Hendricks-Berkadia, which negotiated the deal and arranged the financing. 

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Senior living providers will likely face a growing conundrum regarding their role in the sex lives of residents with memory impairments, especially as boomers head into old age, writes Bloomberg in a recent article.

The number of older Americans with memory impairments is expected to surpass 7 million in about a decade from now. About 5 million people aged 65 and older in the U.S. have already been diagnosed with Alzheimer’s, according to the Alzheimer’s Association.

“One of the most complex and unexamined issues facing elderly care facilities as the Baby Boom generation enters old age: How to determine if residents with dementia have the mental capacity to consent to sex,” says Bloomberg.

The director of nursing and the administrator of Windmill Manor, a nursing home in Coralville, Iowa, were both fired in relation to two 2009 incidents when nurses encountered two dementia residents engaging in intercourse, reports Bloomberg.

The administrator ultimately decided not to report the incident to the state Department of Inspections and Appeals as he believed it was mutual, and Iowa law only requires reports in cases where physical or sexual abuse is suspected. But in 2010, the department was looking into another matter at the nursing home and heard about the two incidents, resulting in a two-week investigation.

An official at the department decided Windmill Manor had failed to protect the woman, whose dementia was more advanced than the man’s, and the facility paid a $14,500 fine without admitting to wrongdoing, reports Bloomberg. The administrator and director of nursing were fired for “reasons [not] made public” and the woman’s family filed a lawsuit holding Windmill Manor and its corporate affiliate responsible for her alleged rape.

“Sex among the elderly, especially those with Alzheimer’s or other types of dementia, is a subject that many of the nation’s 16,000 elderly care facilities have largely been able to ignore,” says the article. “The aging of the Baby Boomers, many of whom grew up in the 1960s sexual revolution, will force more facilities and families to confront the sorts of legal, ethical and moral questions that arose at Windmill Manor.”

Studies show that many people remain sexually active as they age. Bloomberg cited a 2007 study published in the New England Journal of Medicine, which revealed that 53% of people between the ages of 65 and 74, and 26% of those aged 75 to 85, reported being sexually active.

“Nursing homes have long struggled with episodes of rape in which victims clearly didn’t consent,” says the article. “Sex between the demented raises more-nuanced questions that make it difficult for facility staff to know whether they should report cases of potential abuse to authorities.”

The American Health Care Association, a trade group for the nursing home industry, has no formal training or guidelines for dealing with senior sexuality, according to spokesperson Greg Crist.

“The whole area of geriatric sexuality is an area we need to learn a lot more about,” Robert Bender, a geriatrician, is quoted as saying in an interview relating to the Windmill Manor investigation. “I don’t think we should be pointing blame when people are expressing themselves in natural ways.”

Read the full piece at Bloomberg.

Written by Alyssa Gerace

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A Texas continuing care retirement community (CCRC) is in the midst of a widespread repositioning project to transform into a hospitality environment focusing more on independent and assisted living rather than institutional-style skilled nursing with an eye toward long-term sustainability.

The C.C. Young campus, in Dallas, Texas, contains many buildings built in the 1960s and ’70s. Care levels include independent living, assisted living, memory care, skilled nursing, rehabilitation, home health, and hospice.

Ten years ago, the CCRC had about 240 nursing beds. Today, it’s licensed for 134 beds and operates around 90. In August 2011, a 108-unit, $54 million independent living building opened, and the CCRC has also gained 66 assisted living units with plans to add more, along with additional independent living units.

The transition stems from futuristic thinking.

“That’s the way we’ll be able to stay in business,” says Russell Crews, C.C. Young’s executive vice president and chief financial officer. ”People learned a long time ago you can get most of the services you get in a nursing home in assisted living, and it’s a home-y, inviting, warmer environment.”

The other thing C.C. Young is promoting through the campus is personal care services, so people can age in independent living longer and stay longer in assisted living, says Crews. THe CCRC has its own hospice and home care services that it promotes for residents, who also have the option of contracting those services with a third-party.

“The time you spend in the nursing home is going to get less, probably each year going forward,” he says. The goal is to get to a six-to-one ratio of independent living units to skilled nursing beds, along with adopting a small house/greenhouse model for higher levels of care.

For the past several months, the community has been undergoing a substantial repositioning of unit mixes. D2 Architecture, a Dallas, Texas-based firm specializing in senior living design, was brought in to aid C.C. Young’s efforts.

“Things are not broken at C.C. Young, though—they’re going in and fixing something that’s good, and making it great,” says David Dillard, president at D2. ”A really good trend we’re seeing is converting unused common areas to units, although I don’t see it [happening] that much.”

At C.C. Young, some rarely-used communal spaces on the upper floors of the assisted living building are being converted into nine additional assisted living units—at an “obvious” financial advantage to the community, Dillard says.

The bottom floor will also get a makeover, with plans for a new dining area, new art studios, and new meeting areas. D2 recommends putting everything from coffee shops, mail rooms, and TV lounges in central locations where people are forced to interact, instead of being shut away behind closed doors in their rooms.

The next wave of the project is for the community’s rehabilitation buildings.

One of D2′s architects, Keith Wilson, recently conducted a “sleepover” at C.C. Young—a movement pioneered by the design firm where an architect goes to a facility and spends a night as one of the residents. The twist: Each architect is assigned a disability a senior may have, which helps him or her figure out exactly what a potential resident might go through and how to make life easier for that person.

For Wilson’s sleepover, he was given the symptoms of being a right-side stroke victim and couldn’t use the right half of his body. Takeaways from his experience include plans to create rehab units that are similar to what a recovering resident’s home is like.

“You need [a setting] like your house, so caretakers can teach you how to go home, and cook, and use the bathroom, and go down the hall, etc.,” Dillard recounts of Wilson’s findings.

In many communities, that’s not the norm. Generic rehab rooms have often been designed as a space where someone’s going to live the rest of their life, for perhaps their final six months or a year, according to Dillard, rather than functioning as a stepping stone back to an assisted living or even independent living unit.

“We’re going to employ Keith’s takeaways to make common spaces with fake kitchens and bathrooms that are great training for someone who just wants to go home,” says Crews.

Many parts of the project are being financed with community cash-flow rather than a bank loan.

“We’re seeing a lot of focusing on repositioning, laser shocks on various parts of the campus to make it better,” says Dillard, who says he’s getting calls to do projects at other communities ranging in cost from about $1-1.5 million. “There are pieces of work on C.C. Young’s campus that are [costing] half a million, where you zoom in, spend the money out of cash-flow, and get a great reward for it from a marketing standpoint.”

Already, the 108-unit independent living community that opened two summers ago has achieved positive cash-flow. “It took about 24 months, and our Pro Forma study had said about 28 months,” Crews says. “We’re trying to move into a quicker return [on investment] than we’ve seen historically. “

It’s too early to speculate on costs of the project, he says, especially as the number of new units is still unknown for another independent living community that is planned to take the place of an existing, institutional-style skilled nursing building.

“My guess is, at some point, standalone skilled nursing facilities are going to be few and far in between,” Crews predicts. “You need a campus that drives through the continuum of care as people go through different aging processes, and we want to be positioned to take advantage of that. I believe the CCRC is the most sustainable way of the future.”

Taking a proactive approach is the best approach, Dillard says.

“Rather than looking at a community and thinking, ‘This is in trouble, what do we do now?’ it’s, ‘This is working now—what’s the landscape going to look like 15 years from now?’” he says. “That’s fresh thinking.”

Written by Alyssa Gerace

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NHI Acquires Assisted Living Community for $15.3 Million

National Health Investors (NYSE:NHI) announced on Monday the $15.3 million acquisition of an assisted living community in Marysville, Ohio that will be leased to Emeritus Senior Living (NYSE:ESC). 

The Inn at Halcyon Village is a 76-unit assisted living and memory care community built in 2009. The lease with Emeritus has an initial 15-year term with an option to extend. Rent in the firs year of the lease will amount to $1.15 million with three percent annual fixed escalators beginning in the third year. 

“We are pleased to expand our relationship with Emeritus Senior Living, the nation’s largest assisted living operator, with the addition of this very high-quality and stabilized assisted living community,” said Justin Hutchens, NHI’s CEO and president. Emeritus now leases nine communities from NHI. 

NHI funded the purchase with borrowings on its revolving credit facility. —Alyssa Gerace

CNL Lifestyle Properties Acquires Senior Housing Community for $22 Million

CNL Lifestyle Properties, Inc. announced on July 2 the acquisition of The Stratford Continuing Care Retirement Community, a 221-unit, Class A senior housing community in Carmel, Ind. for $22 million. Maxwell Group Inc. will continue to manage the property. 

“The Stratford is an outstanding addition to our portfolio and its location in one of the most affluent suburbs of Indianapolis provides us with a top asset in a very strong market,” said Kevin R. Maddron, senior managing director of CNL Financial Group. “We are pleased with the performance of the continuing care retirement community asset which we currently own. This acquisition allows us the opportunity to add another continuing care retirement community to the fund and cultivate a relationship with a strong operating partner.”

Built in 2009, The Stratford features a pool, fitness room, main and private dining rooms, a library, theater, billiard room, beauty salon, Internet cafe, and an underground parking garage. —AG

Assisted Living Concepts Gives Update on TPG Merger

Assisted Living Concepts, Inc. (NYSE: ALC) announced recently that Aid Holdings, LLC has obtained nearly all the state licenses for operating its assisted living communities in connection with the planned merger TPG Capital, L.P. Aid Holdings is an affiliate of private equity firm TPG.

ALC says the remaining state operating licenses will be obtained by Aid Holdings within the next few weeks, and that the closing of the merger agreement will occur shortly afterward.

Healthsense Acquires Monitoring and Analytics Provider WellAware

Healthsense, Inc. announced on July 1 the acquisition of WellAware Systems in a move it says will increase the capabilities of its technology-enabled services platform. The terms of the transaction were not disclosed.

“The opportunities enabled by this combination are a natural next step in the evolution of technology-enable care. It brings together two industry-leading companies that will have greater scale and expertise to best serve our customers,” said A.R. Weiler, President and CEO of Healthsense. “WellAware’s unique monitoring technologies complement our own platform and will ultimately benefit our customers by further enabling more informed and proactive care decisions that drive reduced intervention costs and help them provide superior care.”

Combined, the two companies currently serve more than 20,000 individuals. The acquisition strengthens Heatlhsense’s position in managed care and accountable care networks as the emergence of performance-based care and reimbursement models intensifies the focus on increasing the quality of care while cutting down on costs. 

“Healthsense shares WellAware’s belief that remote monitoring will play an important role in managing the health and wellness of the growing senior population. In particular, it enhances the way technology can be utilized to help seniors safely live as independently as possible,” said Teresa DiMarco, CEO of WellAware. “The powerful combination of technology and people created through this merger enables us to provide caregivers with the timely information they need to intervene appropriately, thereby reducing hospitalizations and ER visits and improving the overall quality of life for seniors.” —AG

Cornerstone Core Properties REIT, Inc. Acquires Assisted Living Community for $8.6 Million. 

Cornerstone Core Properties REIT announced July 3 it has acquired a 66-unit assisted living community built in 2006 in Aledo, Illinois for $8.6 million. The community has an occupancy rate of 95% and has been triple net leased to an affiliate of Meridian Senior Living, the new operator of the community under a 15-year term. 

“We are very pleased to add another property to our Meridian Senior Living portfolio,” said Kent Eikanas. 

Meridian currently operates more than 100 facilities in 12 states, including one of the facilities Cornerstone Core Properties REIT closed on earlier this year as well as others in Illinois.

Since its launch in 2006, Cornerstone Core Properties REIT has acquired 20 properties for a total purchase price of $194.2 million. Since 2011, six of those properties have been sold. The current portfolio includes seven multi-tenant industrial properties and seven long-term triple net leased healthcare facilities. 

Gracewell Healthcare Acquires Shelbourne Senior Living Community

UK-based Gracewell Healthcare recently acquired Shelbourne Senior Living, a campus that includes a 68-bed care home and 14 assisted living cottages located in Sway, Hampshire, reports CareHome.co.uk.

“This is a fantastic facility, set in beautiful countryside, offering the highest level of care to its residents,” said Tim Street, healthcare director at Gracewell. “Gracewell will continue to deliver highly personalized care to ensure this is a home where people can continue to create happy memories with their families.”

Care levels at Shelbourne of Sway include support cottages, assisted living, and memory care. —AG

Kindred Announces Sale of Eight “Non-Strategic” Nursing Centers for $49 Million

Kindred Healthcare (NYSE: KND) announced this week it will acquire two home health agencies based in Phoenix and Virginia, further expanding its reach into home health care. 

The acquisitions come on the heels of Kindred’s sale of eight non-strategic nursing centers for $49 million to Kindred affiliates, the proceeds of which the company plans to reinvest into its Integrated Care Markets and to use toward home health and hospice acquisitions. Kindred also announced the 

In addition, Kindred announced the purchase of the previously leased real estate of Kindred Hospital Bay Area-Tampa for approximately $25 million. 

“We plan to continue our efforts to reduce our lease obligations (our most expensive debt) and selectively grow Kindred at Home as part of our Integrated Care Market strategy, which enables us to better Continue the Care for our patients and provide high-quality clinical outcomes throughout an entire post-acute episode,” said Paul Diaz, Kindred CEO.

The home health acquisitions include All Heart Home Health Agency and Hospice, Inc. (“All Heart”), a home health and hospice provider that operates two locations in Norfolk; and Arrowhead Home Health, Inc. and Arrowhead Hospice Centers, Inc. (“Arrowhead”), a home health and hospice provider that operates two locations in the greater Phoenix market.

Terms of the acquisitions were not disclosed.

Kindred has recently ramped up home health acquisitions, having recently acquired a Houston-based home health provider. —Elizabeth Ecker

Clearview Capital Closes $325 Million Fund, Senior Care Investments Planned

Clearview Capital announced the closing of a $325 million fund last week, Clearview Capital Fund III, LP, which closed in excess of its $275 million target.

“We are gratified by the enthusiastic response of the limited partner community and are very proud of the diverse group of high quality public pension, 
endowment, foundation and fund of funds investors that committed to Fund III,” said Calvin Neider, co-Managing Partner of Clearview Capital. “We are very fortunate to have been able to complete the entire process in just over five months.”

The majority of the fund’s capital was provided by institutional investors, but other capital was contributed by many of Clearview Capital’s original wealthy family and individual backers, as well as many managers from Clearview’s current and prior portfolio companies. 

Notable institutional investors include Adams Street Partners, Credit Suisse’s Customized Fund Group, Grove Street Advisors, Northwestern University, and RCP Advisors.

“We intend to remain laser-focused on the lower middle market, comprising companies with EBITDA generally less than $10 million, a strategy we have pursued very successfully since our inception 14 years ago,” said James G. Andersen, co-Managing Partner of Clearview Capital. “We believe it was our continued commitment to the lower middle market, where we are confident we can continue to generate exceptional returns, that allowed us to raise the Fund quickly and which forced us reluctantly to turn away many high quality institutional investors.”

Senior Care Centers of America, one of Clearview Capital’s portfolio companies, merged with Active Day in November 2011 to become the largest adult day health service provider in the U.S. A spokesperson for Clearview Capital told SHN that a portion of the $325 million fund is expected to go toward senior care investments. —AG

Clearview Capital Completes 11th Add-on Acquisition for Senior Care, Inc.

Active Day/Senior Care, Inc., a portfolio company of Clearview Capital, LLC, announced the June 20 completion of the acquisition of Guardian Programs Adult Medical Day Care of Glassboro, N.J.

The transaction is the eleventh add-on acquisition that Active Day/Senior Care has made since Clearview Capital’s initial investment in the company in 2005, and the company expects to make additional acquisitions in the future both within its current footprint and in new markets. —AG

REIT Acquires Four SNFs for $35.6 Million

American Healthcare Investors and Griffin Capital Corporation, the co-sponsors of Griffin-American Healthcare REIT II, Inc., announced in June the acquisition of four skilled nursing facilities in three transactions for a total purchase price of about $35.6 million. 

One of the acquisitions was a two-property portfolio of skilled nursing facilities located in Milton and Watsontown, Pa., for $13 million. The two facilities total about 75,000 square feet and 263 licensed bed and were sold by Millennium Management, an unaffiliated third party represented by Mark Davis of Healthcare Transactions Group, Inc.

The portfolio is currently 100% master leased to Mid-Atlantic Health Care, LLC under a 15-year absolute net lease which has been cross-collateralized and cross-defaulted to the existing master lease between Griffin-American and Mid-Atlantic for the five-building skilled nursing portfolio they operate which was acquired by the REIT in 2011. 

Another skilled nursing facility, this one about 42,000 square feet in Pittsfield, Mass., was acquired off-market for about approximately $16 million from Sheehan Health Group. The one-story, 115-bed facility was built in 1980 and underwent a comprehensive renovation in 1995, with additional capital improvements totaling $1.5 million performed in 2011 and 2012.

Pittsfield Skilled Nursing Facility is currently 100% master leased to Trinity Health Systems, LLC under a 15-year absolute net lease with annual 3% rent escalations. The lease has been cross-collateralized and cross-defaulted with the existing master lease between the REIT and Trinity for the seven building Massachusetts senior care portfolio which they operate that was acquired by Griffin-American in 2012.

The last acquisition was for Fairview Skilled Nursing Facility, a single-story, 43-unit center licensed to operate up to 102 beds. The approximately 25,000 square foot building is located near a medical center and was acquired for about $6.6 million from an entity affiliated with Regency Pacific. It is currently 100% master leased to Regency Pacific pursuant to a 13-year absolute net lease. 

Like the other acquisitions, the Fairview facility’s lease has been cross-collateralized and cross-defaulted with the existing master lease between Griffin-American and Regency Pacific for the 13-building Pacific Northwest senior care portfolio they operate that was acquired by the REIT in 2012. 

Regency Pacific was represented by Don Ambrose and Chris Urban of Ambrose Capital Group, Inc. 

“We continue to source attractive acquisitions on behalf of Griffin-American Healthcare REIT II and its stockholders,” said Danny Prosky, a principal of American Healthcare Investors and president and COO of the REIT. “In a competitive market, we are proud to be among the most active buyers of healthcare real estate as we continue to build a diverse portfolio on behalf of stockholders.” —AG

NuScript RX Raises $8.5 Million in Equity Offering

NuScript RX, a Nashville-based pharmacy company that serves the long-term care industry, recently raised $8.5 million in an equity offering, according to a Securities and Exchange Commission filing.

Twelve investors contributed to the offering, which is not being made in connection with a merger, acquisition, or exchange offer, according to the filing. Rather, the money is slated for building the company’s infrastructure, reports the Nashville Business Journal citing Don Taylor, the company’s CEO. 

“We have about 100 employees at this point, and it looks like we will double our business within the next 18 months,” Taylor told the Business Journal.

NuScript uses a mail-delivery system and owns and operates a central distribution center in Nashville which was recently doubled in size. Its next goal is to build inventory and equipment and expand staff. —AG

HealthLease Properties REIT Approved to Buy Senior Housing Portfolios

HealthLease Properties Real Estate Investment Trust (TSX:HLP.UN) announced on July 2 that its board of trustees approved the acquisition of two senior housing and care property portfolios.

One portfolio is located in Ohio, Virginia, and North Carolina with a total of 495 beds, while the other is located in Alberta, Canada, with 468 beds and 283 more under development. The aggregate purchase price for both portfolios, excluding mezzanine financings of the two properties under development, is about $200.6 million (CDN).

The U.S. portfolio has five skilled nursing facilities and one assisted living and memory care community and was acquired for $77.6 million (USD). Its acquisition is being financed in part by a term loan for $53.1 million (USD) from PNC Bank, with a 4-year term and a 4.64% interest rate.

The other portfolio has six assisted living and independent living communities and was acquired for $69.7 million (CDN). Its acquisition will be financed in part by the assumption of five loans in the amount of $45.2 million (CDN). The five loans have a weighted average maturity of 13.1 years and weighted average interest rate of 4.98%.

HealthLease also entered an agreement to provide mezzanine financing of $5.3 million (CDN) for two additional properties in the Canadian portfolio that are currently under development and to purchase those properties upon completion for an aggregate $53.3 million (CDN). 

We are excited about these acquisitions to expand our presence in both Canada and the U.S.,” said Zeke Turner, Chairman and CEO of HealthLease. “This continues the growth momentum we set at our initial public offering and increases our portfolio diversity. We began with 15 properties when we went public just about a year ago; with this acquisition we have now grown to 45 properties, triple our initial size, while maintaining one of the youngest real estate portfolios in the industry.”

Saber Healthcare Group, LLC will manage the skilled nursing facilities in the U.S. portfolio under a triple-net lease. Meridian Senior Living will manage the sixth property, also under a triple-net lease. The Canadian portfolio will continue to be operated by Continuum Health Care Holdings Ltd. —AG

Marcus & Millichap Brokers Sale of Calif. SNF

A 99-bed skilled nursing facility dually licensed for Medicare and Medi-Cal (California’s Medicaid program) was recently sold in a transaction brokered by Rob Reis, vice president of investments at Marcus and Millichap and associate director of the firm’s National Seniors Housing Group. The facility is located in northern California and was approximately 92% occupied at time of sale, with a quality mix under 10%. No further information was released. —AG

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Omnicare, Inc. (NYSE:OCR) has agreed to provide skilled nursing pharmacy services for Kindred Healthcare, Inc. (NYSE:KND), the company announced in an 8-K filing on Friday.

The transition is expected to commence at the end of 2013. Kindred informed its current skilled nursing pharmacy service, PharMerica Corporation, on Friday that it would not be renewing a contract that expires on Dec. 31, 2013. PharMerica (NYSE:PMC) provides hospital pharmacy management services to Kindred’s hospitals under a separate contract that doesn’t expire until 2014.

In addition to skilled nursing, Kindred operates three other healthcare divisions: hospitals, rehab, and home health and hospice. The company used to also run a fifth division, Kindred Pharmacy Services, which was spun off in a merger with AmerisourceBergen to PharMerica in 2006.

Kindred’s skilled nursing division operates approximately 200 nursing and rehab centers and six assisted living communities. It generated more than $2 billion in revenue in 2012.

“We’re very pleased and grateful to be partnering with a high quality organization like Kindred to support their pharmacy needs across the country,”  Patrick Lee, vice president of investor relations at Omnicare, told SHN. “For some time we’ve had an interest with partnering with a company of Kindred’s stature. It’s a reflection of the progress we’ve made as an organization over the past year in enhancing our service offering across the senior care continuum. We look forward to a continued partnership with them.”

As of press time, Kindred had not responded to Senior Housing News’ request for comment.

Written by Alyssa Gerace

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The nursing home industry’s two largest trade groups, the American Health Care Association (AHCA) and The Alliance for Quality Nursing Home Care, announced on Tuesday an agreement to combine their operations into one organization.

The merger is expected to be complete by July 1, and the new entity will retain the AHCA name. AHCA is the nation’s largest association of long-term and post-acute care providers with about 11,000 facilities as members of the organization. Some of its membership already overlaps with The Alliance, which represents around 1,200 facilities.

Similar goals between the two trade groups helped facilitate the agreement, along with economic pressures to the senior care industry.

“Today our profession stands at a crossroads. Faced with continued cuts and growing pressures on the systems that fund the care we provide, there was really only one choice—to band together to form one unified voice,” said Mark Parkinson, AHCA president and CEO. “The economic straits our profession faces necessitated this union. We have heard the call of our members, and we have responded.”

In the past two months, AHCA and its affiliated organization, the National Coalition for Assisted Living (NCAL), have seen record membership numbers, according to Parkinson.

“That record membership is because our members see a future teeming with promise,” he said in a statement. “But fulfilling that promise comes only when there is no equivocation in our message to Washington: We are ready to work with policymakers to improve the life of every individual in our centers. Our advocacy, regulatory, policy and quality efforts will be a force second to none.”

A unified approach for advocating on behalf of the senior care industry is the way to go, says Alan G. Rosenbloom, president of The Alliance.

“America’s long term and post-acute care provider community is an integral part of a rapidly changing, dynamic health care marketplace where quality and cost-efficiency will and should drive budget and policy decisions,” Rosenbloom said in a statement. “Through unity of purpose and mission, together we will continue to spotlight the fact we are a key part of the solution to Medicare and Medicaid cost containment and that the barrage of federal and state funding cuts are unsustainable.”

Written by Alyssa Gerace

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Here’s a collection of news bites pertaining to the senior housing and long-term care industries, gathered from around the nation. Many of the articles are state-specific, but could eventually have national implications or influence senior care trends. Click the links to access the full article. 

Nursing Home News

From ElderLawAnswers.com—Court Upholds Ruling of Son’s Responsibility for Mom’s Nursing Home Bill

“In May 2012, a Pennsylvania appeals court found a son liable for his mother’s $93,000 nursing home bill under the state’s filial responsibility law. Health Care & Retirement Corporation of America v. Pittas (Pa. Super. Ct., No. 536 EDA 2011, May 7, 2012),” writes ElderLawAnswers. ”In March 2013 the state’s Supreme Court declined to hear the case, meaning that the ruling is final.” Read more

From the judgment: “Though Appellant is correct that it was HCR’s burden to establish his ability to support his mother, we hold that HCR met its burden. As a result, Appellant’s first request for a new trial is without merit.” Read more

From Kentucky.com—Bills Seeking Protection for Nursing Home Residents Fail to Pass

“House Bill 73, a bill that would continue a criminal background check program for nursing home employees, was passed by the House but was never heard by a Senate committee. If a similar bill isn’t passed in the 2014 session, the fingerprint background check program—currently paid for through a $3 million federal grant and an additional $1 million in state funds—will end after June 30, 2014,” reports Kentucky.com. “Bills that would create a registry of workers who have had substantiated cases of adult abuse or neglect also failed to pass for the fourth straight year. Gov. Steve Beshear had earmarked $1.2 million in the 2012-2014 budget for the creation of the adult abuse registry.” Read more

From EnterpriseNews.com (Mass.)—New Law Provides Safeguards for CCRC Residents

“Governor Deval Patrick held a ceremonial bill signing Wednesday for legislation that will give residents of continuing care retirement communities additional consumer protections and housing rights,” reports EnterpriseNews.com. “The legislation will give residents of Continuing Care Retirement Communities the right to establish a resident’s association, receive a current copy of the facility disclosure statement and receive information on fees and construction. Providers must make reasonable efforts to explain the terms of disclosure statements, adjustments in monthly fees, information that may affect the health and welfare of residents and the future of the facility, including the ownership and providers’ financial health.” Read more

From NewsOK.com—Nursing Home Camera Bill Advances in Okla. Legislature

“[On Tuesday,] a legislative committee unanimously passed a bill that would allow nursing home residents or their family members to put video recorders in their rooms,” reports NewsOK.com. “[The bill] also would prohibit a nursing home facility from refusing to admit a person who wants a recording camera in the room or remove a resident because a camera is in the room. Backers are confident Senate Bill 587 will get eventual approval of the full House. It was approved in the Senate 44-0.” Read more

From NJ.com—Whistle-Blowing Verdict Against Nursing Home Gets Overturned

“A state appeals court has overturned a verdict against a Bridgewater nursing home accused of firing a nurse in retaliation for him reporting allegedly improper patient care to government agencies in January 2008,” reports NJ.com. “Jurors in March 2012 agreed with the claim made by James Hitesman that his termination from Bridgeway Senior Healthcare violated the Conscientious Employee Protection Act, or CEPA, which is designed to protect employees in whistle-blower cases. But the appellate judges found that since the code of ethics only applies to nurses, it cannot be cited as part of a CEPA claim against Bridgeway.” Read more

From The News-Herald (Ohio)—Nursing Home to Close, Displacing Residents

“Broadfield Care Center at 7927 Middle Ridge Road sent a letter to its residents Thursday notifying them its skilled nursing facility will close in 90 days,” reports The News-Herald. “Provider Services, which bought Broadfield three years ago, issued a statement Friday. The statement didn’t provide a reason as to why the 81-bed facility is closing. No plans have been made on what will happen to the facility and its 80 skilled nurses.” Read more

From the Harford Courant (Conn.)—Bill Prohibiting Violent Criminals to Live in Nursing Home Advances

A bill spawned by the controversial Rocky Hill nursing home proposal cleared one legislative committee and was forwarded to a second on Tuesday. In its current form, the bill would amend existing state law to prohibit people convicted of sexual assault, along with convicted murderers, from residential nursing home placement,” reports the Hartford Courant. “If it becomes law, and is not vetoed by Gov. Dannel P. Malloy, the bill would take effect at enactment.” Read more

Senior Care & Long-Term Care News

From the News-Journal.com (Tex.)—Senate OKs Overhaul of Medicaid-Funded Long-Term Care

“The Texas Senate unanimously approved an overhaul of long-term and acute care Medicaid services on Monday in an effort to expand care to more disabled Texans while saving millions of state dollars. “We cannot continue to fund the same inefficient, unsustainable long-term care system and expect a different result,” said Sen. Jane Nelson, R-Flower Mound, the author of Senate Bill 7,” reports the News-Journal.com. “SB 7 is expected to save $8.5 million in Medicaid costs in the 2014-15 biennium by expanding managed care services, establishing pilot programs to try to provide services at capitated costs and implementing measures to ensure more efficient monitoring of services.” Read more

From the Post-Tribune (Ind.)—Ralliers Call for More Senior Care Options

“Senior citizens and physically handicapped people gathered at the Statehouse on Wednesday to share the importance of home and community-based services that can help keep people in their own home, instead of having to move to a long-term care facility,” reports the Post-Tribune. “At the Rally for Independence, Indiana residents from all corners of the state gathered to show how a little funding to help those who would prefer to stay home on their own goes a long way.” Read more

From the National Senior Citizens Law Center—Calif. Dual Eligibles Agreement with CMS

“[On March 28], California’s Department of Health Care Services (DHCS) and the federal Centers for Medicare and Medicaid Services (CMS) announced an agreement to redesign the way Medi-Cal and Medicare services are delivered to low-income older adults and people with disabilities in California,” says the National Senior Citizens Law Center. “Under the agreement, dual eligibles will be automatically enrolled into capitated managed care plans responsible for delivering all Medicare and Medi-Cal services in exchange for a single payment. The payment will be less than the two programs spend on the population today. Enrollment will begin this October. As many as 456,000 people will be impacted.” 

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Here’s a collection of news bites pertaining to the senior housing and long-term care industries, gathered from around the nation. Many of the articles are state-specific, but could eventually have national implications or influence senior care trends. Click the links to access the full article. 

Emeritus to Hire 1,000 Veterans, Military Spouses

Emeritus Senior Living has announced its plans to hire at least 1,000 former members of the military and military spouses in the next five years, prompted in part by unemployment rates being significantly for veterans than for the overall population. 

In January 2013, the jobless rate for all post-9/11 veterans was 11.7%, with military spouses facing a 26% unemployment rate. As of February 2013, the national unemployment rate was 7.8%. 

Emeritus’ veteran recruiting program is the first in the nation’s senior living industry.

From WisconsinWatch.org—New State Law Conceals Nursing Home Abuse, Neglect Records

The Wisconsin Center for Investigative Journalism has launched a project, called A Frail System, exploring issues surrounding “a recent change in state law that bars records of abuse and neglect from use in the courts” that may diminish families’ abilities to hold potentially negligible nursing facilities accountable, reports WisconsinWatch.org. While healthcare providers largely approve of the law, which was introduced by Gov. Scott Walker (R-Wisc.) in a job-creation and retention effort, consumer advocates do not approve. “The law, which went into effect in February 2011, bars families from using state health investigation records in state civil suits filed against long-term providers, including nursing homes and hospices,” says the article. “It also makes such records inadmissible in criminal cases against health care providers accused of neglecting or abusing patients.” Read the latest installment

Wisconsin Nursing Home Inspection Reports Available Online

“In January, the Wisconsin Department of Health Services began publishing state inspection reports of nursing homes, assisted living facilities and other health care providers on its website. Records are available from July 2012 onward,” writes the Wisconsin Center for Investigative Journalism. ”To access the reports, click here and select Provider Search. A user may search by facility name, location and type.” 

From the DesMoinesRegister.com (Iowa)—Nursing Home Slaying Prompts New Legislation

“In the wake of a brutal homicide at a Fayette County care facility, state lawmakers are again examining the issue of violent criminals living in Iowa’s nursing homes. The Iowa House is considering a bill that would require care facility administrators to notify patients, visitors, workers and others when a registered sex offender moves into the home. But the bill is silent on violent offenders convicted of crimes that aren’t sexual in nature,” reports the DesMoinesRegister.com. “That’s one concern of the ACLU of Iowa, which opposes the bill in its current form. But the group’s main objection is that the bill doesn’t say where sex offenders will go for care if Iowa’s nursing homes turn them away.” Read more

From the Courier-Journal.com (Ky.)—Nursing Home Bill for Lawsuit-Review Panel Advances

“After a contentious debate, the Kentucky Senate approved a bill Wednesday to create a medical review panel to assess lawsuits alleging abuse at nursing homes,” reports the Courier-Journal.com. “Senate Bill 9 would allow for a panel of three doctors, mediated by an attorney, to review evidence in lawsuits being brought against long-term care centers. The panel would then issue an opinion on whether there was a legitimate claim of neglect or abuse that would be admissible in court. The bill would not prevent a case from going to trial, Denton said.” Read more

From Columbus Business First—Ohio State Seeks Partners for Possible ACO

“Rather than build its own hospice, nursing home and home health agency, Ohio State University’s Wexner Medical Center is turning to players in the industry for business relationships as Medicare and insurers increase pressure on hospitals to ensure patients stay home when sent home,” reports Columbus Business First. “Responses were due Feb. 13 from senior care organizations, nursing agencies, medical equipment dealers and others asked by Ohio State to provide credentials as the hospital system seeks to expand its “post-acute care continuum of services,” according to a document obtained by Columbus Business First through a public records request.” Read more

From Syracuse.com (N.Y.)—Labor Union Sues County Over Nursing Home Transfer

“True to its word, a labor union representing more than 400 employees at Van Duyn Home & Hospital has filed a lawsuit challenging Onondaga County’s transfer of the nursing home to a county-created development corporation. The lawsuit filed late last week in state Supreme Court in Syracuse also challenges budget cuts related to Van Duyn’s potential sale to a private operator, Rockland County-based Upstate Services Group,” reports Syracuse.com. “The union had previously threatened to sue the county over the legality of transferring ownership of the nursing home to what it calls a “nonregulated shell corporation that has little oversight and no accountability to taxpayers.’” Read more

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