Senior Living News Wire

Siena PSD, a partnership between Siena Senior Living and Pacific Summit Development, marked new progress on its 20-project, approximately $360 million pipeline of senior living communities after obtaining entitlements for an eighth site in mid-June.

The pairing combines real estate development veterans with some relative newcomers to the senior housing industry who are planning to build about 2,064 units of mostly assisted living and memory care with some independent living in the next couple years. The size of the communities generally ranges between about 75-125 units each at an average construction cost of $18 million.

Pacific Summit Development, founded in 1987, is led by partners Randall Driscoll and William Thurston, both of whom have extensive real estate and development experience through their backgrounds with the Downey Savings and Loan’s real estate development program.

Don and Andrew Pitarre are the co-principals of Siena Senior Living, LP, which formed in 2008 and sold its first planned and developed assisted living community, located in Longmont, Colo., to Ventas (NYSE:VTR) in March 2012.

“We always wanted to get into assisted living, but it’s hard to do unless you’ve got a track record,” says Don Pitarre, who says his company forged ahead “in spite of” the Great Recession. “So we paired up [with PSD]. They’ve got the strength to help bring a lot of projects to the market, and we’ve been on a tear this year getting properties and going through entitlements. We specialize in getting entitlements done.”

At this point there are about 20 projects in Siena PSD’s pipeline that will be developed in the next 18 months. As of June 15, eight are slated to have completed the entitlement process, with six more expected to obtain entitlements by early fall and the rest by the end of the year, according to Siena PSD’s project pipeline schedule.

Project locations include Fairfield, Ventura, Santa Barbara, San Ramon, Carmichael, Citrus Heights, Nipomo, and San Diego, Calif. Eight more projects are located in Texas, in McKinney, Temple, Waxahatchie, Austin, Houston, and San Antonio, and two more in Scottsdale, Ariz.

Once projects are entitled, Siena PSD generally breaks ground within 60 days. The developer has relationships with nearly 10 sale-leaseback senior living operators, and works with REITs both directly and through those operator partnerships, says Pitarre, although he declined to name any operator or REIT partners. Siena PSD uses architect Irwin Associates for all its projects and ProMatura Group for market studies.

REITs and private equity funds have been “very active” with development financing, and that’s where around half of the Siena PSD projects will get 100% of their financing, Pitarre estimates.

“The mindset is changing with the REITs—they’re running out of Class A properties to acquire. The only way to get that Class A property is to build it yourself,” he says, echoing sentiments voiced by Sabra Health Care REIT executives during an investor presentation at REITweek 2013. “The Class As are getting few and far in between, and to get into assisted living and memory care you have to do more and more development.”

The rest of the projects will be conventional 50/50 ownership-financed deals, he says, noting that banks are getting more active—a trend expected to continue throughout 2013.

For Siena PSD projects done with bank debt or some other form of financing in addition to REIT capital, the developer retains ownership generally until the property is stabilized with occupancy between 91-93%.

“We prefer pre-arranged [deals] with the REITs. What we’ll do is bring a lease-back operator in to work with us that guarantees a lease with the REIT, which makes them feel comfortable to fund 100% of the development,” says Pitarre.

Memory care is a key component of many of Siena PSD’s projects, and Pitarre views the sector as a growing, unmet market that will become an “acute” need. While there’s always concern about overbuilding in any segment, he says, developers just need to do their market research homework.

Moving forward, Siena PSD plans to keep its projects mostly west of the Mississippi River, with sights set toward eventually targeting the active adult market in California and Texas.

“You’re seeing home prices rise now, and seniors are going to be able to sell their homes and either purchase a 55+ home or an active adult rental,” Pitarre says. “The market studies we’re relying on indicate the active rental market has the most potential for growth, so we’re trying to get into places that match up with that interest.”

Written by Alyssa Gerace

Seattle-based Merrill Gardens announced on Monday the hiring of Tana Gall as president and Jason Childers as senior vice president, effective immediately. Both Gall and Childers were formerly the president and senior vice president, respectively, of Leisure Care, also based in Seattle.

Merrill Gardens’ former president Bill Pettit has moved on to lead R.D. Merrill Company, the parent company of Merrill Gardens and Pillar Properties, which owns and operates apartment residences in Washington state.

Prior to joining Merrill Gardens, Gall worked at Leisure Care for 19 years. Childers was with the company for 11 years. As of Monday, only Dan Madsen, Leisure Care’s CEO, is listed as the company’s leadership. Senior Housing News has not heard back from Leisure Care regarding new leadership as of press time. 

Merrill Gardens owns and operates 56 retirement communities in nine states and is celebrating its 20th year of operations in 2013.

“Tana and Jason’s expertise will be critical as we build the platform for our operating systems for the future,” said Pettit in a statement. ”They will be leading the way as we transform the company through technology and innovate new ways to best serve our senior population. We are very fortunate to have them join our team and I look forward to the opportunities their continued partnership will provide to Merrill Gardens.”

Written by Alyssa Gerace

The Department of Health and Human Services has made updates to its National Plan to Address Alzheimer’s Disease including its take on the vulnerability of older Americans who live in care facilities. 

Due to the particular vulnerability of people with Alzheimer’s disease who live in care facilities, HHS stated, the department will increase its attention to this population via the studies currently available. This will include an “in-depth analysis” that has implications for those providing care in assisted living communities. 

…”This will include an in-depth analysis of the National Survey of Residential Care Facilities to better understand the level of cognitive impairment among residents and the types of services provided in assisted living facilities,” HHS writes. “The results of these studies will be used to identify areas that the National Plan should address in future years.”

While reports of elder financial abuse are currently fielded by state Adult Protective Services, not all of these programs cover residents of long-term care communities, HHS says. State funding allows states to survey Medicare and Medicaid-certified nursing facilities, while state licensing agencies may investigate other types of care communities, including assisted living. 

The changes to the plan come as part of an effort to better protect those who are receiving long term care. 

“Congress must see to it that the necessary resources are committed to accelerate and prioritize the government’s efforts on Alzheimer’s,” said Harry Johns, President and CEO of the Alzheimer’s Association and member of the Advisory Council to the Plan. “Without these new resources, efforts in Alzheimer’s research, care and support will continue to be hampered to the determent of millions of families and the economic well-being of the nation.”

In the early iterations of the plan, assisted living was not included as a care setting, which prompted a campaign by the Assisted Living Federation of America (ALFA) to introduce it to the plan. ALFA submitted comments last year to HHS toward the initiative. 

Written by Elizabeth Ecker

State lawmakers are urging elderly citizens to use life insurance as a way to pay for long-term care, reports The Wall Street Journal. 

The strategy aims to provide seniors and their family members with financial resources to pay for immediate care needs through life settlements, a practice in which policyholders sell their life insurance policies at a discount in the secondary market and the buyer takes over premiums and collects the death benefit.

Proposed legislation is pending in at least eight states, including Texas, New York, California, Florida, Kentucky, Louisiana, Maine and New Jersey. 

The states hope life settlements will stop seniors from dropping their life-insurance policies in order to qualify for Medicaid. To ward off policy owners from spending down their settlements, the proposed bills require that money go straight into an irrevocable bank account used solely to pay for long-term care.

There is nothing to prevent life-insurance owners from selling their policies to pay for long-term care, but legislators hope the new laws will help to publicize, as well as regulate, the strategy.

A drawback to these settlements, notes WSJ, is that the company buying the policy retains a “sizable chunk” of its value, which can amount to 45% of the policy’s death benefit, depending on a holder’s age and health.

Families find that selling a life-insurance policy can still help them meet immediate care needs for family members, even though they are losing a percentage of the policy upon selling.

Read The Wall Street Journal article.

Written by Jason Oliva

The Department of Housing and Urban Development (HUD) recently released finalized guidance clarifying its position on the role of housing in accomplishing the goals of Olmstead, the landmark Supreme Court decision giving people with disabilities the right to have multiple housing options.  

Olmstead‘s objective is to help people with disabilities lead normal, integrated and independent lives. For some, this may mean living in a community setting where they can also receive supportive services if necessary, rather than a nursing home or some other institutional setting.

There has been a lot of cross-agency collaboration between the Department of Justice, the Department of Health & Human Services, and HUD to clarify and implement Olmstead, notes Michelle Norris, senior vice president of acquisitions and development at National Church Residences (NCR), which provides affordable housing to a variety of populations including the elderly and disabled. 

The ruling has implications for senior housing, especially for providers of HUD-assisted supportive housing. A significant number of disabled people are also elderly, Norris says, and because of the aging in place trend, that’s not expected to change.

“People are living in [their homes] longer and living longer,” she says, adding that the average age of people living in NCR housing is now 75. “As people head into their 80s, they generally have more limitations, chronic illness, and disabilities. We are going to see both sets, the elderly and those with disabilities, in our buildings.” 

While there have been increased efforts across the country to give more choices to disabled individuals who are institutionalized or housed in settings that are considered segregated, there has still be a lot of confusion about how housing providers should follow Olmstead, according to the HUD guidance. 

“[T]here is a great need for affordable, integrated housing opportunities where individuals with disabilities are able to live and interact with individuals without disabilities, while receiving the health care and long-term services and supports they need,” HUD says.

NCR’s action plan is to continue providing supportive housing for populations including seniors, the disabled, and the homeless, and to keep working with states that are providing funding for supportive housing and make sure they understand Olmstead policy.

The agency is exploring how it can fund additional integrated housing units with long-term healthcare and supportive services along with the funding it already provides for single-site supportive housing that already houses and supports individuals with disabilities. 

“HUD is taking this opportunity to advise housing providers, as they manage their portfolios of housing and develop new housing to meet the needs of individuals with disabilities, to consider the particular housing needs in their individual communities and in their state,” the guidance reads.

Through the finalized guidance, HUD is trying to help states understand their position from both a housing and supportive services perspective. 

“HUD and HHS have been going state by state educating people on the parameters [of Olmstead],” Norris says. “There’s room within this guidance; it’s not very, very strict, saying ‘you must do this, you can’t do that.’ It’s more balanced.”

Some independent living providers see opportunity in Olmstead and how it is enforced.

“We believe ILCs [independent living centers] can play a crucial role in the implementation of managed care,” said Liz Pazdral, California’s Independent Living Council Executive Director, in a statement.  ”ILCs have established and effective relationships with community-based organizations and can help managed care plans contain costs by assisting individuals living with disabilities to live independently in their homes rather than in institutions.”

California is transitioning to a managed care model for its dual eligible population, with an emphasis on home- and community-based services. Through the state’s Coordinated Care Initiative and Medicaid system, independent living  centers can work with managed care plans to expand access to HCBS services. This is accomplished by including those services in a benefit package for dual eligibles, says the California State Independent Living Council, and contracting with managed care organizations to deliver the services in a community setting.

“In the past, ILCs have never had to demonstrate to health plans the benefit of the services we provide and how those services can effect positive outcomes such as reducing re-hospitalization or providing in-home support services that keep individuals out of emergency rooms,” said Todd Teixeira, Silicon Valley Independent Living Center’s director of programs. “Given the role we can play in keeping costs down while providing quality services, it will be critical for ILCs to collect data and track outcomes that demonstrate our value to the managed care plans.”

Access the finalized HUD guidance.

Written by Alyssa Gerace

Following the housing bubble and subsequent burst, the senior housing industry is facing an ongoing phase of consolidation, with many, many more deals on the way that will come in response to the post-boom era.

For many non-profit organizations, it means consolidation ahead, but perhaps not in the traditional form. Many will opt to affiliate with larger groups or other single-standing properties in order to boost financial stability or for other, newer, reasons, say those who assist communities in maintaining their economic position in the market.

“We’re seeing a gradual consolidation phase,” says Dan Hermann, senior managing director and head of Investment Banking for Ziegler. “For the leading not for profit sponsors, many are multi-facility systems that have been desiring to grow and have recognized that growth through affiliation is as logical and rational as growth through development.”

The agreements that have already taken place are paving the way for more, Ziegler says, as companies face certain challenges following the downturn in the market.

“Usually they need two to three factors,” Hermann says. “Those might be aging physical plant, declining occupancy or financial distress.”

For two Kansas-based CCRCs, Kidron Bethel Village in North Newton, Kansas and Schowalter Villa in Cedar Hesston, located six miles apart from one another, joining together took the two from being competitors to enjoying many operational efficiencies under the new partnership.

“As non-profits we always viewed the people close to each other as colleagues but also as competition,” says James Krehbiel, president and CEO of Bluestem Communities. “We were two organizations that drew from the very same marketplace.”

Today they are one operator: Bluestem Senior Living. Yet three years ago, the operators were only talking about the efficiencies available if they were to join together as one.

Both were strong in quality and functioning, but with uncertainty and Medicare reimbursement cuts, a conversation began among the two communities.

“We saw what we needed to do with specialization,” Krehbiel says. “Why not be proactive and look at the possibilities of: here are two organizations six miles apart. What about becoming one non profit? Would there be advantages?”

After 18 months of conversations among board members, the communities entered a phase of consulting with stakeholders and beginning to broach the topic with them.

Ultimately, they looked at the potential partnership as coming to terms in several areas: the mission, financial impact, specialization opportunities and additional efficiencies. They agreed the efficiencies they would gain through a partnership would benefit both communities financially, and across the board. 

“We did not anticipate how much intersection there was of how we do it here and there and figuring out solutions together, from maintenance and grounds meeting to say how do we do grounds better, to chaplains communicating on how to do spiritual life better,” Krehbiel says. “We did not anticipate it to the degree it did.”

Like Bluestem, Ziegler sees much more opportunity on the horizon for mutually beneficial partnerships between communities. Rather than seeking options to refinance or become acquired, there are other options available, and they will be used increasingly, says Rebecca Neth Townsend, senior vice president, investment banking, for Ziegler. In some cases they are spanning multiple denominations.

“They tend to be careful when they step into sponsorship transition,” Townsend says. “But the concept of ‘I’m a not for profit and we’re going to extend to another not for profit’ seems to play well as a less threatening approach.”

With many conversations currently under way spanning geographic regions as well as community types and specialties, Ziegler expects the market to see many more partnerships among those communities that have weathered the economic storm but are looking to improve and remain competitive.

“We’re seeing a gradual consolidation phase,” Townsend says. “Not for profit senior living tends to be  slower to react to initiatives with risk associated.” 

Written by Elizabeth Ecker  

Researchers at Carnegie Mellon University (CMU) have developed a method for tracking the locations of multiple individuals within an indoor setting that has implications not only for healthcare, but broader security also.

Using a network of video cameras, CMU researchers were able to follow the movements of 13 people within a senior care facility, even though individuals sometimes slipped out of camera view.

Researchers used multiple cues to identify individuals from the video feed, such as apparel color, person detection, movement trajectory and even facial recognition. 

Multi-camera, multi-object tracking has been an active field of research for a decade, but automated techniques have only focused on well-controlled lab environments. 

Carnegie Mellon’s team, by contrast, proved their technique with actual residents and employees in a nursing facility—with camera views compromised by long hallways, doorways, people mingling in the hallways, variations in lighting and too few cameras to provide comprehensive, overlapping views.

The algorithm developed by CMU significantly improved on two leading algorithms in multi-camera, multi-object tracking. It located individuals within one meter of their actual position 88% of the time, compared with 35% and 56% for the other algorithms. 

The technology has drawn comparisons to the fictional Marauder’s Map used by popular book and movie series Harry Potter, which upon viewing and with a hint of magic, reveals the location of people moving about nearby.

While no magic was necessary to create the video monitoring tech, researches developed their tracking technique as part of an effort to monitor the health of individuals in senior care settings. 

“We thought it would be easy, but it turned out to be incredibly challenging,” said Alexander Hauptmann, principal systems scientist in the Computer Sciences Department (CSD) of CMU.

Something as simple as tracking based on color of clothing proved difficult, for instance, because the same color apparel can appear different to cameras in different locations, depending on variations in lighting. Additionally, a camera’s view of an individuals can often be blocked by other people passing in hallways or even by a piece of furniture. 

This is where face detection helped in re-identifying individuals on different cameras.

Yi Yang, a CSD post-doctoral researcher, noticed that faces can be recognized in less than 10% of the video frames. So, researchers developed mathematical models that enabled them to combine information, such as appearance, facial recognition and motion trajectories. 

Further work will be necessary to extend the technique during longer periods of time and enable real-time monitoring, CMU researchers agree, especially as they look for additional ways to use video to monitor resident activity while preserving privacy. 

“The goal is not to be Big Brother, but to alert the caregivers of subtle changes in activity levels or behaviors that indicate a change of health status,” Hauptmann said.

Written by Jason Oliva

Are you looking for a new senior housing job? Check out the Senior Housing News jobs board to view openings for sales and marketing directors, assisted living administrator, executive director, and much more. 

Are you a senior living company or organization looking for new talent? Post a job on Senior Housing News Jobs Online.

• Business Office Manager for Senior Housing (Houston, Texas) Tarantino Properties
• Assisted Living Administrator (Fort Smith, Ariz.) Brookfield Assisted Living
• Marketing Director (Westhampton, N.Y.) Westhampton Senior Living, Inc.
• Sales Director (Waterbury, Conn.) Benchmark Senior Living
• Director of Resident Programs (Austin, Tex.) Senior Lifestyle Corp.
• Executive Director (Austin, Tex.) Senior Lifestyle Corp.
• Memory Care Specialist (Chicago, Ill.) Senior Lifestyle Corp.
• Director, Sales & Marketing (Scottsdale, Ariz.) Senior Lifestyle Corp.
• Digital and Print Advertising, Outside Sales (Fort Lauderdale, Fla.)  Dominion Enterprises/www.SeniorOutlook.com
  Director of Senior Housing (St. Paul, Minn.) Great Lakes Management Co. 
• Sales Director – Senior Housing (Providence, R.I.) Benchmark Senior Living

Visit our website for additional opportunities in the senior living industry.

The best and the brightest read SHN. Want them to join your team? Post your jobs to Senior Housing News Jobs Online today!

Policymakers are looking toward a revised payment system for post-acute care services as a way to change healthcare delivery from a “fee for service” model to more coordinated, accountable care, but there’s risk inherent in bundled payment models.

Under the traditional fee for service Medicare model, the program pays widely varying rates for beneficiaries depending on what post-acute care setting they are in—skilled nursing facilities, home health, inpatient rehabilitation hospitals, or long-term care hospitals—even if they’re getting the same or similar care.

“Bundled payments have the potential to improve care coordination and quality of services, rationalize service use, and lower potentially avoidable readmissions,” says the Medicare Payment Advisory Commission (MedPAC) in its June report to Congress.

In 2011, at the recommendation of MedPAC, the Centers for Medicare & Medicaid Services (CMS) launched a Bundled Payments for Care Improvement Initiative to test different bundle designs, where one benchmark price across multiple providers would cover all services given, no matter the post-acute care setting, during a defined time period following a hospitalization or other “triggering” event.

The CMS pilot found that there are advantages and disadvantages to possible approaches of bundled payments, MedPAC continues.

“Each decision involves trade-offs between increasing the opportunities for care coordination and requiring providers to accept risk for care beyond what they furnish,” says the report.

Despite the risk, bundled payments would give providers—especially those not ready to assume even greater risks associated with other payment reform models such as accountable care organizations—a way to gain experience in care coordination across a spectrum of providers and settings, according to MedPAC.

Bundled payments for post-acute care services could serve as a gateway to larger healthcare delivery system reforms, says MedPAC, which plans to continue looking into how best to proceed with payment reform in the next year.

Read the June report.

Written by Alyssa Gerace

Nursing homes are losing employees while residential care facilities and the home health industry are gaining them, suggests the May jobs report released by the Bureau of Labor Statistics. 

Thousands of healthcare workers joined the home healthcare sector in May 2013, in contrast to the hospital and nursing home sectors which saw thousands of jobs depart. 

Overall healthcare employment increased by 11,000 jobs in May 2013 including the 6,900 added to the home health care sector, according to the BLS.

The nursing and residential care facilities sector together gained 1,300 jobs between April and May 2013 despite a loss of 2,700 jobs when looking just at nursing care facilities during that same time period.

This suggests the growth in the combined sector (which includes additional related jobs) comes more from residential care than from nursing homes. 

The combined number of employees in nursing and residential care facility sector edged upwards from 3.19 million last May to 3.21 million one year later.

Home healthcare has seen even larger growth, as employees in this sector grew almost 7% from around 1.19 million in May 2012 to 1.27 million by May 2013.

Despite the substantial number of jobs added to the health care industry in May, it’s actually a sharp decline from the prior year, when job growth averaged 24,000 a month, the report noted. 

Check out the May jobs report.

Written by Alyssa Gerace

Nursing homes are losing employees while residential care facilities and the home health industry are gaining them, suggests the May jobs report released by the Bureau of Labor Statistics. 

Thousands of healthcare workers joined the home healthcare sector in May 2013, in contrast to the hospital and nursing home sectors which saw thousands of jobs depart. 

Overall healthcare employment increased by 11,000 jobs in May 2013 including the 6,900 added to the home health care sector, according to the BLS.

The nursing and residential care facilities sector together gained 1,300 jobs between April and May 2013 despite a loss of 2,700 jobs when looking just at nursing care facilities during that same time period.

This suggests the growth in the combined sector (which includes additional related jobs) comes more from residential care than from nursing homes. 

The combined number of employees in nursing and residential care facility sector edged upwards from 3.19 million last May to 3.21 million one year later.

Home healthcare has seen even larger growth, as employees in this sector grew almost 7% from around 1.19 million in May 2012 to 1.27 million by May 2013.

Despite the substantial number of jobs added to the health care industry in May, it’s actually a sharp decline from the prior year, when job growth averaged 24,000 a month, the report noted. 

Check out the May jobs report.

Written by Alyssa Gerace

In the pursuit of new development of senior housing properties, there are plenty of viable sites and financing available, those in the market say, if you know where to find them.

From areas characterized more by urban sprawl, such as Houston and Dallas, to the Northeast where suburban areas are more saturated with an aging population, there are development opportunities available in light of existing properties aging and sometimes approaching obsolescence.

For those doing the developing today, the considerations include everything from zoning to market penetration. But the factors may not always weigh in as they might appear.

Local competition, for example, can actually signal a good place for new development, says Debbie Laycock, Managing Director for ARA Seniors Housing.

“The higher the penetration rate, typically you’d say you don’t want to build there,” Laycock said during a Senior Housing News webinar on land acquisition and development strategies. “But acceptability of the product tends to push penetration rates up as well. So, you can go into a market with a high rate of penetration as well and be successful.”

In a market where there is high penetration, developers are looking to a second set of factors to determine whether there is opportunity for development.

“You want to look very closely at what you perceive to be competition,” says John Dragat, Head of Development for Benchmark Senior Living. “If you have penetration with good occupancy and rates, it may very well be a market to be in.”

One major factor Benchmark looks to is homeownership and home prices; not only among potential residents; but also qualified caregivers or adult children of potential residents.

According to Benchmark’s research, 75% of a community’s residents come from within a five-mile radius.

“While the resident is the senior, the decision maker is really the adult child,” Dragat says. “We look for concentrations of adult children who are 55-65 and maybe even older. We have to find locations where both are concentrated. People in their late 80s returning to the area; they may be moving back from Florida.”

A host of additional considerations, such as proximity to health care services and transportation are secondary considerations, with community reception and neighborhood remaining paramount.

Because most financing terms are contingent upon permitting, working with communities and municipalities upfront is essential. Many developers are working with towns and cities proactively to introduce community benefits, for example.

“Zoning is highly site- and locality-specific,” says George Mesires, Partner at Ungaretti & Harris LLP. “Sometimes it is introducing green space or other space [with the municipality].

Yet patience, perseverance and flexibility will all serve developers going forward, as they hone in on new development in the sector, says Dragat.

“There isn’t any tried and true set of metrics,” he says. “We, like many of our brethren that have been involved in development and expanding portfolios have thought: what correlates to high occupancy? what correlates to high [average daily rates]?. How do we pick the right site? A lot of very smart people have tried to find that smoking gun. There isn’t one.”

Written by Elizabeth Ecker

Much ado is made about the blockbuster deals made in recent quarters by the Big 3 REITs, but while Ventas, HCP, and Health Care REIT fight for the large, high-quality senior housing portfolios, smaller-cap REITs are quietly snatching up their own deals at more stable—and reasonable—cap rates. 

Senior Housing Properties Trust (NYSE:SNH), for example, is the fourth-largest healthcare-focused REIT with a market capitalization of $4.83 billion. By comparison, Health Care REIT—the third-largest of the Big 3—has a market capitalization of $19.07 billion, nearly quadruple that of SNH.

In the first quarter, the REIT completed or agreed to make about $120 million worth of investments in the senior housing and medical office building space, with plans for future investments between about $300 to $400 million in 2013.

Acquisitions ranging between $10 million and $50 million are SNH’s “sweet spot,” said SNH’s president and COO, David Hegarty, during REITWeek 2013, held last week in Chicago.

“They’re small enough not to attract the Big 3, and we can very capably compete against other capital sources at this level,” he said. 

The bigger REITs generally pursue large portfolios as opposed to small ones. 

“There is definitely a portfolio premium,” Hegarty said, but it comes at a cost: “People [have to] pay to get [portfolios], down in the sub-7 [cap rate] level.”

Cap rates for senior housing transactions have been trending down in the last 12 months, according to the National Investment Center (NIC) for the Seniors Housing and Care Center, resting at 7.5% from January through the end of March. Larger-cap REITs can go much lower, though: The $4.3 billion acquisition of Sunrise Senior Living by Health Care REIT, announced last year and closed in early 2013, had an estimated 6% cap rate. 

SNH is predominantly going after B+ or B-class properties that can be acquired at a 7.5 or 8% cap rate, and they’re usually one-offs.

“Last year was a very big year for acquisitions,” Hegarty said, citing a strong push to get deals closed by the fourth quarter for tax reasons. “We are seeing that things have picked up, there’s  a moderate pipeline right now but it’s not as robust as a year ago at this time. We’re still seeing a number of one-off opportunities for our company.”

Similar to how Ventas, HCP and Health Care REIT generally don’t pay much attention to one-offs, they are also avoiding the skilled nursing sector, and that’s quite alright with Aviv REIT (NYSE:AVIV).

The Chicago-based REIT invests primarily in the $100 billion skilled nursing market and plans to deploy about $600 million into the market in 2013, mostly through its existing tenant relationships. 

If institutions start paying attention to the skilled nursing sector again, it could drive prices up, said Craig Bernfield, CEO of Aviv, which has a $981.1 million market cap.

“There are only a few companies including ourselves that are intensively focused on the [skilled nursing] space,” Bernfield said during an investor presentation. ”We haven’t really seen competition for assets. The cap rate we can buy at is still very attractive.” 

Sabra Health Care REIT (NASDAQ:SBRA), with a market cap of almost $986 million, is planning $150 million to $200 million of acquisitions in 2013. Most of the REIT’s acquisitions have had a cap rate of 7% or above, according to Matros, generally around 8% for assisted living deals and about 10% for skilled nursing facilities.

Written by Alyssa Gerace 

The baby boomer generation is only getting older, and a new real estate education company is seeing an opportunity to break into the senior housing market.

Seniors Real Estate Institute is a coaching and training company focused on the senior housing and real estate markets. Spearheaded by Nikki Buckelew, a 20-year veteran of the real estate industry, the Institute suggests that a swelling boomer population calls for updated perspectives and approaches to serving senior homeowners.

“The seniors market is a distinct specialty—not a sideline to a general real estate practice,” Buckelew said.

The Certified Senior Housing Professional (CSHP) designation offered by the Institute covers a spectrum of knowledge and skills that agents, senior housing professionals and senior service providers need to serve senior clients.

Offered over a two-day period,  the CSHP incorporates extensive coaching and training on maintaining a profitable business model. Continuing education credit is also available in some states under the CSHP designation. 

Having earned  an undergraduate degree in Family Studies and Gerontology and a Masters degree in counseling psychology, Buckelew emphasizes that population trends have created a significant gap in understanding the needs of an older population that may be transitioning to another type of living situation. 

“Adult children with aging parents are often spread across the country and must rely on the expertise of local professionals to help them assist their parents with the complexities of a late in life transition,” she said.

Citing a 2010 U.S. Census Bureau report, Buckelew noted the 15.1% increase in the 65-and-over segment of the population between 2000 and 2010. Simultaneously, there was a 31.5% increase in the 45- to 64-year old segment.

The Seniors Real Estate Institute says the need to foster communication for boomers about senior housing is an immediate necessity, especially as life longevity plays an important factor in lifestyle choices.

Written by Jason Oliva

Cambridge Closes $42.8 Million of Senior Housing & Care Loans

Cambridge Closes $14.9 Million Nursing Home Loan

Cambridge Realty Capital Companies recently announced the closing on a $14.9 million loan to refinance Green Park, a 188-bed skilled nursing home in St. Louis, Mo., announced chairman Jeffrey Davis. 

The fully-amortized, 36-year term loan was arranged for the owner, an Ohio limited liability company, using the HUD Section 232/223(a)(7) funding program and was underwritten by Cambridge Realty Capital Ltd. of Illinois, the Cambridge business that specializes in underwriting FHA-insured HUd loans. 

Cambridge Closes $12.6 Million Loan for Ill. Senior Care Property

Cambridge Realty Capital Companies recently reported closing a $12.6 million first mortgage loan for Hawthorne Inn of Danville, a 140-bed skilled nursing care and assisted living property in Danville, Ill.

The fully-amortized, 30-year term mortgage loan was arranged using the HUD Section 232/223(a)(7) refinance program and was underwritten by Cambridge Realty Capital Ltd. 

The property has 76 skilled care beds and 65 assisted living units, according to Cambridge chairman Jeff Davis. 

Cambridge Closes $3.9 Million Loan for Texas Senior Care Center

Cambridge reported closing a $3.9 million first mortgage loan for Windsor Care Center, a 108-bed skilled nursing home in Terrell, Texas.

The fully-amortized, 35-year term mortgage was arranged for the owner using the HUD Section 232/223(a)(7) refinance program and was underwritten by Cambridge Realty Capital Ltd. of Illinois with an undisclosed interest rate. 

Cambridge Closes $2.4 Million Loan for Wisc. SNF

Cambridge recently reported closing on a $2.4 million loan to refinance Alden Meadow Park, a 94-bed skilled nursing home in Clinton, Wisc. The fully-amortized, 30-year term loan was arranged using the HUD Section 232/223(a)(7) funding program and was underwritten by Cambridge Realty Capital Ltd. of Illinois. 

Cambridge Closes $9 Million of Loans for Two Indiana Nursing Homes

Cambridge Realty Capital Companies reports arranging $9 million worth of loans to refinance two skilled nursing home properties in southern Indiana.

The fully-amortized, 24-year term loans were arranged for the owner, Transcendent Healthcare, for properties in Boonville and Owensville, Ind. One loan, for $4.68 million, was used to refinance the 88-bed Transcendent Healthcare of Boonville property. A $4.32 million loan was arranged to refinance the 68-bed Transcendent Healthcare of Owensville.

Both loans were arranged using the HUD Section 232/223(a)(7) funding program and were underwritten by Cambridge Realty Capital Ltd. of Illinois.

Lancaster Pollard Closes $11.4 Million Refinance for Ohio SNFs

Lancaster Pollard recently assisted Hennis Care Centre with the refinancing of two of their skilled nursing facilities: Hennis Care Centre of Bolivar, a 99-bed SNF, and Hennis Care Centre of Dover, a 137-bed SNF with 10 assisted living units, both located in Northeast Ohio.

The facilities were refinanced using the FHA-insured HUD Sec. 232/223(a)(7) program. The total loan amount of $11.4 million will allow Hennis Care Centre to achieve significant debt service savings. Kass Matt, out of Lancaster Pollard’s headquarters in Columbus, Ohio, led the transaction.

Ziegler Closes $21.6 Million Financing for Kendal at Oberlin

Ziegler recently announced the closing of the $21.6 million tax-exempt, fixed-rate Kendal at Oberlin Series 2013A Bond issue. Kendal at Oberlin is an obligated group which owns and operates a continuing care retirement community in Oberlin, Ohio.

The borrower is a subsidiary of Kendal Northern Ohio, which is affiliated with The Kendal Corporation.

Proceeds from the sale of the Series 2013A Bonds together with available funds will be used to refund and retire the outstanding County of Lorain, Ohio Health Care Facilities Revenue Refunding Bonds, Series 1998 A and a loan from Lorain National Bank to the borrower in the principal amount of $2.38 million. 

The proceeds will also be used to pay or reimburse the borrower for the payment of certain costs of acquiring, constructing, installing, and equipping the project, and to fund a portion of the debt service reserve fund for the benefit of the Series 2013A Bonds, along with paying certain expenses associated with the cost of issuing the bonds. 

The Series 2013B bonds will consist of a bank direct placement by Lorain National Bank to fund future capital expenditures over the next three years. The bank has a 13-year commitment through the final maturity of the Series 2013B bonds, and Kendal at Oberlin will also amend the existing Series 2009A&B bank qualified bonds to match the bank’s commitment to the final maturity of the bonds and to lower the fixed interest rate. 

Cambridge Provides $21.7 Million Loan for Senior Apartment Complex

Cambridge Realty Capital Companies recently provided a $21.7 million loan to refinance Morningside North Apartments, a 256-unit senior apartment complex in Chicago. 

The fully-amortized, 33-year term loan was arranged using the HUD 232/223(f) funding program and was underwritten by Cambridge Realty Capital Ltd. of Illinois, according to Cambridge chairman Jeffrey Davis. 

Love Funding Closes $22.7 Million in Financing for Mass. SNF Portfolio

Love Funding recently announced the closing of three loan refinancings totaling $22.7 million for a portfolio of skilled nursing facilities in Massachusetts.

Leonard Lucas, a senior director out of Love Funding’s Boston office, secured the loans through the HUD Section 232/223(f) LEAN loan program for long-term care facilities. 

The facilities benefiting from the refinancing are Royal Cape Cod Nursing and Rehabilitation Center in Buzzards Bay, Royal Falmouth Nursing and Rehabilitation Center in Falmouth, and Royal Taber Street Nursing and Rehabilitation Center in New Bedford. The centers offer a total of 270 beds and are operated by Royal Health Group, a family-owned company founded by James Mamary Sr. in 1997.

Lucas also secured an $8.7 million loan refinancing for Country Villa Rehabilitation Center, a Los Angeles skilled nursing facility, last month. 

Love Funding Secures $4.34 Million in Financing for Maine Senior Care Portfolio 

Love Funding recently closed three loan refinancings totaling $4.34 million for a portfolio of senior care properties in Maine. 

Leonard Lucas, a senior director out of Love Funding’s Boston office, secured the loans through the HUD 232/223(a)(7) LEAN loan program. 

The refinanced facilities are Klearview Manor in Fairfield; Northland Living Center in Jackman, and Sanfield Rehabilitation and Living Center in Hartland. The centers offer a total of 64 beds and are operated by North Country Associates Inc.

Freddie Mac Approves Greystone as Designated Seniors Housing Seller/Servicer

Greystone announced on Tuesday that it has been approved as a National Senior Housing Seller/Servicer by Freddie Mac to originate and service multifamily seniors housing loans nationwide.

The designation allows Greystone to better meet the financing needs of the rapidly growing senior sector, according to the company. To be considered for the designation, lenders are evaluated by Freddie Mac based on a number of qualifications, including GSE loan origination and underwriting experience for seniors housing properties, staff experience in the seniors housing market, and track record of seniors housing loan performance. 

“Freddie Mac’s capabilities and specialized team of Seniors Housing experts have already added value to one of our long term clients and we are excited to bring Freddie Mac to all our clients going forward,” said Scott Kavel, Managing Director for Greystone’s senior housing lending business.

Lancaster Pollard Closes Loans for Two Midwest Senior Care Properties

Lancaster Pollard recently reported completing a $6.9 million refinancing of a 92-unit assisted living, independent living, and memory care property in Bridgman, Mich. using the HUD Section 232/223(f) program.

The provider was able to refinance its existing term note and line of credit, which provided significant debt service savings and funded a large deposit to replacement reserves for ongoing capital needs, including $25,705 in repairs to the facility. The family-owned organization was able to remove personal guarantees under the new financing structure, freeing up borrowing capacity to fund future growth.

Brendan Healy, a vice president out of Lancaster Pollard’s Columbus office, led the transaction.

Lancaster Pollard also recently worked with The Birches Assisted Living, a 90-unit licensed assisted living facility in Clarendon Hills, Ill., to refinance the facility’s existing FHA loan. The firm closed financing for the provider through the HUD Section 232/223(a)(7)  program to obtain a reduced interest rate and help realize nearly $60,000 of annual debt service savings, totaling more than $1.8 million for the remaining life of the loan.

Steve Kennedy, senior vice president and regional manager with Lancaster Pollard out of the firm’s Columbus office, led the transaction. 

ELS Initiates $435 Million Refinancing

Equity LifeStyle Properties, Inc. (NYSE:ELS) announced on June 3 its plans to obtain $435 million in new mortgage loans from institutional lenders, secured by mortgages on 25 manufactured home and RV properties. The loans are expected to bear a blended interest rate of 4.3% per annum, and to have maturities ranging from 10 to 25 years with a weighted average maturity of about 18 years.

Proceeds from the financing will be used to repay debt with a weighted aerate effective interest rate of 5.7%. This includes ELS’ remaining 2013 debt maturities as well as approximately $102 million maturing in 2014 and about $295 million maturing in 2015. ELS elects to use available cash to pay approximately $37 million in prepayment penalties.

The financing is expected to close in stages beginning in the second quarter of 2013 with the final closing expected to occur in April 2014.

“The current financing environment offers an opportunity to obtain long-term financing for our RV and MH assets at historically low interest rates. This transaction allows us to reduce our overall cost of debt approximately 20bps to 5.3% and extend our weighted average maturities from 4.5 years to more than 7 years,” said Marguerite Nader, CEO of ELS. “In addition, through this transaction we expect to restructure our debt maturities so that we have no more than $300 million maturing in any single year going forward.”

Ziegler Closes $24.8 Million Financing for Plymouth Place

Ziegler announced on Thursday the closing of the $24,765,000 tax-exempt, fixed-rate Plymouth Place Series 2013 bond issue. Plymouth Place is located in LaGrange Park, about 15 miles outside of downtown Chicago, Ill., and is managed by Providence Management. 

Proceeds from the sale of the Series 2013 Bonds, together with other funds, will be used to refinance the outstanding Series 2005B and Series 2005C Bonds, all of which were variable rate demand bonds with credit enhancement through letters of credit. The Series 2013 Bonds consist of one fixed-rate, tax-exempt term bond. Principle on the 2013 bonds will be amortized during 2038-2043, after the final maturity of Plymouth Place’s only other debt, the fixed-rate Series 2005A bonds. 

Love Funding Closes $4.74 Million Loan for Okla. Assisted Living Community

Love Funding recently announced the closing of a $4.74 million loan refinancing for Heritage Assisted Living, a 79-unit assisted living center in Yukon, Okla.

Love Funding Senior Director Robyn Cunningham of the St. Louis office, together with Director Adrian Hartman, secured the financing through the Department of Housing and Urban Development’s Section 232/223(f) LEAN loan insurance program.

Heritage Assisted Living was built in 2000, and joined Oklahoma’s Advantage Waiver Program in 2010. The property was the first assisted living center in the Oklahoma City area to join the state’s long-term care program, which provides Medicaid-funded home and community-based services to frail elders and adults with disabilities.

Eskaton Properties Issued $51.9 Million Tax-Exempt Fixed-Rate Bonds

Cain Brothers recently served as sole underwriter and swap advisor in the issuance of the Eskaton Properties, Inc. Series 2013 Bonds, issued as unenhanced fixed rate bonds rated “BBB” by S&P on the underlying credit strength of Eskaton.

The bonds were used to refinance EPI’s Series 2008B Variable Rate Demand Bonds, backed by a U.S. Bank Letter of Credit; fund the termination payment for an interest rate swap related to the Series 2008B bonds; pay for the cost of issuance; and fund a debt service reserve fund.

Through the bond financing, Eskaton has a more stable capital structure by mitigating common risks associated with Letter of Credit-backed variable rate demand bonds. The corporation also reduced its bank exposure by $43.6 million, or 36% of its outstanding debt. The concurrent termination of Eskaton’s interest rate swap that hedged the 2008B bonds eliminated the counterpart and basis risks, while removing a $9.6 million swap liability from its balance sheet.

The Series 2013 bonds mature in 2035 and were issued in the amount of $51,875,000 at an average yield of 3.96%. 

Oak Grove Capital Closes $1.8 Million Loan for Senior Apartments

Oak Grove Capital recently reports closing a $1.8 million Fannie Mae loan for Fair Oaks Estates, a senior housing complex in Carmichael, Calif. The community offers assisted living, memory care, hospice, and respite care and has above 95% occupancy, according to its website.

Skilled Healthcare Group Receives HUD Loan Commitments

Skilled Heatlhcare Group, Inc. (NYSE:SKH) announced Thursday it has received its first commitments by the Department of Housing and Urban Development to insure loans secured by nine skilled nursing facilities, up to an aggregate amount of $79.8 million.

 ”This is a key step in our efforts to secure long-term low cost financing through participation in the HUD program,” said Boyd Hendrickson, Chairman and CEO of Skilled Healthcare Group.  ”We anticipate that these loans will fund within approximately six weeks.”

SKH plans to use the net proceeds to reduce the term debt portion of its senior secured credit facility. The loans are fully-amortizing over 30-35 years with a projected fixed-rate cost of about 4.6%.

“We have concurrently sought additional HUD loan commitments to approximately match the aggregate $250 million level allowable under our credit agreement, and will evaluate further HUD opportunities under the $460 million portfolio capacity at that time,” Hendrickson said.

The Carlyle Group Seeks $4 Billion Fund Raise

The Carlyle Group, a private equity firm with ties to Capitol Seniors Housing, is looking to launch a U.S. real estate fund and raise up to $4 billion, according to the Wall Street Journal.

“We believed in the inherent value of the investments we were making despite the noise in the market,” Robert Stuckey, head of Carlyle’s U.S. real estate group, told the WSJ without specifically discussing the new fund raise. 

Carlyle has about $176 billion in assets under management.