Strawberry Fields REIT this week announced the acquisition of two skilled nursing facilities in southern Illinois for $5.9 million, $4.3 million of which was provided in cash.
The properties — Integrity Healthcare of Alton in Alton, Ill., and Integrity Healthcare of Belleville in Belleville, Ill. — have a combined 361 beds. Strawberry Fields has been leasing and subletting the properties since 2011, and buying the buildings will allow Strawberry Fields to save about $46,000 every month in rent, Strawberry Fields CEO Moishe Gubin told Skilled Nursing News.
Strawberry Fields had entered a long-term lease on the buildings while working on a deal with the heirs of the properties’ former owner. The deal had taken several months to close, and along the way, Regions Bank had placed the properties into foreclosure; Strawberry Fields paid off the bank entirely last week, Gubin said.
The properties will still be leased by Integrity Healthcare Management under a master lease agreement. Medicaid beneficiaries account for about 88% of the current resident base, with Medicare and private insurance covering the remaining 6% and 5%, respectively. The homes have an average occupancy of 48%, but this is on the upswing, Gubin said.
“Currently both buildings are running between 85 occupied beds, somewhere between 80 and 100,” he said. “And the Belleville facility is actually even more full than Alton.”
The Belleville facility has a higher census than the Alton location because it had a recent influx of non-skilled care patients from another Integrity building that was converted to skilled care, he explained.
“Belleville is specializing for Alzheimer’s, dementia, and geri-psych,” Gubin said. “It’s basically taking the niche of not young and psychiatric, but geriatric and pscyh issues, and that can include depression … it’s not usually those folks that are short-term patients.”
While the Alton facility also focuses primarily on long-term geriatric patients, the location has a dedicated wing for short-term rehab, Gubin said.
The facilities were formerly owned by Calvin Johnson, who passed away almost a decade ago, and they have had some “reputational” problems over incidents that occurred in the past five years, Gubin said. These include the death of an 85-year-old woman at the Belleville facility in 2015, which at the time was called Midwest Rehabilitation and Respiratory Center; before that it was known as Calvin Johnson Nursing Home.
But Integrity has invested a great deal in the buildings since, Gubin told SNN, and he recommended that local residents visit to see the facilities now.
“Our tenant is really a family business,” he said. “The folks that work there have been employed for many years, and they care about the residents and they work hard to give them good care. And if someone’s judging them, they shouldn’t judge them on one-time events that unfortunately occur in the business.”