Transactions: MedEquities Makes $10 Million Skilled Nursing Play in Connecticut

MedEquities Pays $10 Million for Conn. SNF Real Estate

MedEquities Realty Trust, Inc. (NYSE: MRT) acquired the real estate of Woodlake at Tolland Nursing & Rehabilitation Center, a skilled nursing facility in Tolland, Conn., from Prospect Medical Holdings, Inc. for a total of $10 million. The Nashville, Tenn.-based MedEquities plans to enter into a 12-year, triple-net lease with Prospect ECHN Eldercare Services, Inc., which will operate the 130-bed, 65,000-square-foot facility.

Based in Los Angeles, Prospect Medical Holdings purchased ECHN Eldercare last October; the Manchester, Conn.-based operator also owns three Connecticut hospitals and other outpatient facilities. Its parent company owns a variety of health care facilities in the Northeast, California, and Texas.

San Francisco Hospital to Close SNF Units in October

St. Luke’s, a campus of California Pacific Medical Center in San Francisco, will close its skilled nursing unit in October as part of a $600 million overhaul, the San Francisco Business Times reported. Owner Sutter Health said 44 patients will need to move and 72 employees are slated to lose their jobs; St. Luke’s has lost $30 million a year in recent years, according to the Business Times, and is currently in the process of transitioning from sub-acture to acute care.

Monticello Provides $69.3 Million to Massachusetts Assisted Living and Skilled Nursing Portfolio

Monticello Asset Management, LLC recently announced that one of Monticello’s investment vehicles originated a multi-asset loan comprising of $69.3 million in first lien debt financing to a four-property, 616-bed assisted living and skilled nursing portfolio in Massachusetts.

The mortgagors are using the funds to purchase the Massachusetts portfolio. The borrowers intend to improve operating efficiencies and make significant savings throughout the portfolio by leveraging their network of operating experience and corporate services. Additionally, the borrowers expect to receive a Department of Housing and Urban Development (HUD) guaranteed mortgage within the Bridge-to-HUD term.

The borrowers’ principals have more than 15 years of experience operating and owning skilled nursing facilities.

Ziegler Closes a Pair of Skilled Nursing Financing Deals

Chicago-based specialty investment bank Ziegler recently announced the successful closing of $122.5 million in fixed-rate, tax-exempt Series 2017A financing for Ashfield Active Living and Wellness Communities, Inc., dba Aberdeen Heights, a nonprofit corporation based in Missouri.

Aberdeen Heights, a life plan community in Kirkwood, Mo., currently has 243 independent living apartments, 30 assisted living units, 15 memory support suites and 30 skilled nursing beds. Ashfield is a controlled affiliate of Presbyterian Manors of Mid-America, Inc. (PMMA), a not-for-profit corporation based in Kansas.

Aberdeen Heights is co-managed by Greystone and PMMA.

“With this financing, Aberdeen Heights generated over $18M in net present value savings or approximately 17% of par amount of bonds refunded. Investors responded favorably to the experienced management team, the community’s high occupancy levels, the solid operating performance, and the positive credit profile as evidenced by a stable ‘BB’ rating from Fitch Ratings,” Will Carney, managing director in Ziegler’s senior living practice, said in a press release.

Ziegler also announced the successful closing of $232.3 million in fixed-rate, tax-exempt Series 2017 financing for Texas-based nonprofit corporation Buckner Senior Living, Inc.

Buckner Senior Living was established for the purpose of construction, operation and ownership of an entrance fee-based senior living community in Dallas called Ventana by Buckner. The community is expected to have 189 independent living units, 38 assisted living units, 26 memory support assisted living units, and 72 skilled nursing beds.

The community’s levels of care will be located in a pair of 12-story towers.

Greenbrier Development, LLC is serving as the marketing agent and the development consultant for the community, which will be managed by Buckner Retirement Services, Inc.

Upstate N.Y. Hospital to Close its SNF Unit

Carthage Area Hospital received approval from the New York State Department of Health to shutter its skilled nursing unit this week, according to a report from the Central New York Business Journal. The facility in Carthage, N.Y. currently employs 17 full-time and four part-time SNF staffers; Carthage Area Hospital wouldn’t indicate how many positions would be eliminated or reassigned.

“The move is not about eliminating jobs to save money,” hospital CEO Rich Duvall said in a press release announcing the move, per the Business Journal. “In fact, it’s quite the opposite. It is a process that all parties are committed to seeing through.”

Management cited a variety of factors in the decision to close, including regulations, higher costs, and a shift away from the fee-for-service payment model.

Written by Alex Spanko