The Hope Creek Care Center in East Moline, Ill., was listed for sale at $19 million — but county officials confirmed an offer of just $6 million from Aperion Care, the Quad-City Times reported last week.
Broker Marcus & Millichap had listed the property, which has an outstanding mortgage debt of $11 million and short-term loan debt of $7.5 million, in September 2019.
Rock Island County administrator Jim Snider said there were three other, lower offers for the SNF: Altitude Healthcare and Cascade Legacy Healthcare both offered $5 million, while Mosaic Healthcare offered $5.5 million, the Times reported.
Ray Giannini, senior marketing director for Marcus & Millichap, told county board members that no one had been willing to pay $19 million. Another projected value would have been to cover the existing debt, or $13 million or $12 million divided by the bed count of 245, he said.
Then during marketing, he indicated he found “things that were devastating,” including the use of temporary staff at a sum total of $971,000 for temporary help back to 2018, the Times reported.
“So let’s just slice it in half and divide it by a 12% cap rate, which is what buyers are looking for,” Giannini told the board, per the report. “That’s about $5.4 million of value that was just vaporized. So, $19 million minus $5 million. There came a point when I thought we wouldn’t get any offers on the facility. I believe $6 million is a really good deal.”
He said he expects a smooth transition, with all employees likely to be retained by Aperion.
Giannini also expressed annoyance about an editorial in the Times that named the $6 million offer and buyer, arguing the leaks could jeopardize the sale of the SNF and throw off negotiations.
“Once the $6 million gets out, guess what? You’re not going to get a dime more,” he said, according to the report.
Off-Market Exit in Texas
The Mabank Nursing Home in Mabank, Texas, was sold to a regional operator seeking to expand, according to a January 15 press release.
The off-market transaction was handled by Daniel Morris, senior housing and health care principal at Plains Commercial Real Estate. The seller, a legacy owner that owned and operated the SNF since it was built, was looking to exit the business and had recently obtained Medicare certification for the facility.
The SNF has 60 certified beds, according to the Centers for Medicare & Medicaid Services’ Nursing Home Compare website.
Eunice Hall was listed as having a 5% or greater direct ownership interest as of January 2018, according to the website.
50-Bed SNF Sold By One Private Investor to Another in Los Angeles
A 50-bed SNF in the Los Angeles metropolitan area was sold for $4 million, or $80,000 per bed, changing hands from one private real estate investor to another.
The facility generated $4.25 million in top-line revenue on a trailing 12-month basis, according to Blueprint Healthcare Real Estate Advisors — but also had negative trailing earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs, as well as more than $350,000 in outstanding quality assurance fees.
The seller had invested in the physical plant of the property, with capital improvements totaling $1.7 million in the past three years; $800,000 of that was used to ready the facility for approval of 27 subacute beds, according to the Chicago-based brokerage.
Christopher Hyldahl, Gideon Orion, and Kendra Gonzalez handled the transaction for Blueprint.