Kandu Capital and Bloom Senior Living’s decision to sell the last remaining assets in skilled nursing and psychiatric care was a continuation of a long process to increase the group’s portfolio of senior housing rather than any macro factors related to the skilled nursing space.
“Were they a sale arising out of anything with any type of fundamental pressure or macro environment pressure? To the contrary,” Bradley Dubin, one of Kandu’s/Bloom’s principal owners, told SNN of his company’s deal that closed on Friday.
While Dubin declined to disclose the buyer, he said the company chose a California-based buyer with “shared values” after considering 20 offers from across the country for the sale of its skilled nursing facilities. “They’re also a regional, family-owned and operated buyer…that we could leave them in good hands with,” Dubin said.
Kandu/Bloom’s sale of its California-based facilities resulted in a collective sale price of $70.7 million on initial investments of approximately $9 million. The facilities sold are a 255-bed skilled nursing and special treatment program facility in Santa Ana, a 45-bed skilled nursing and special treatment program facility in Los Angeles, and the leasehold in an 80-bed mental health rehabilitation center in Mission Viejo. Among these sold, the largest skilled nursing facility fetched almost $225,000 per bed, Dubin said.
“These are incredible facilities that we’ve owned for decades,” he said, adding that all have a five-star quality rating. “They’re well run. They’re full. They’re stabilized. They’re financially profitable. They provide good care.”
The average occupancy rate for the facilities is well above 90%, with the smaller facility being 98% full, according to Dubin.
Dubin shared that the decision to sell the skilled assets was more about the company’s current trajectory of focusing on the senior housing market, a philosophy that has been in place for more than a decade.
“About 12 years ago, during the last recession, we started slowly pivoting to the seniors housing business … And so, the sale of these last three buildings in LA County and in Orange County is sort of the end of that pivot, where we’ve decided that it was time to exit the skilled and behavioral business, and also at the same time a very good time to start refocusing our efforts and growing senior housing,” Dubin said.
Dubin said the company’s Arizona nursing homes were the first to be shed, which took place over a decade ago, at the same time that the company began acquiring seniors housing assets following the bankruptcy of property management company Sunwest Management.
Moreover, the decision also arose from the pending retirement plans for Mitch Kantor, a principal family member who ran the skilled and mental health behavioral business.
“The younger generation in the family … wanted to focus our attention more on what we’ve built on the senior housing side,” Dubin said.
“These are bittersweet transactions given the unique facilities have been in our family for generations and we have an emotional connection to the counties we worked closely with for decades, the specialized programs we helped engineer and our dedicated staff who tirelessly served our patients,” the company noted in a press release earlier.
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