An East Coast-based nursing home chain secured $180 million in bridge and working capital financing to fund its acquisition of a 12-facility nursing home portfolio spanning Massachusetts and Rhode Island.
The owner-operator plans to use the $160 million bridge loan proceeds to fund the acquisition encompassing more than 1,100-beds, according to MONTICELLOAM, a specialized seniors housing and multifamily bridge lending platform that announced the transaction Tuesday. Meanwhile, an additional $20 million in working capital line of credit will support the properties’ day-to-day operating expenses.
The undisclosed buyer is a growing chain operating more than 75 skilled nursing facilities (SNFs) across the Eastern Seaboard and was looking to expand its footprint, Joseph Borenstein, head of the MONTICELLOAM Healthcare Bridge Lending team, told Skilled Nursing News.
The facilities are being sold by a multigenerational family-owned operator, which decided to pursue the sale as part of its succession planning strategy after being in the business for decades, ultimately choosing to exit the skilled nursing industry completely. Having owned and operated these SNFs for decades, the family prioritized finding a buyer with the financial resources, operational expertise, and cultural values necessary to preserve the quality of care and maintain strong relationships with residents, families and employees, Borenstein said.
The family-owned business was highly selective in choosing a buyer, prioritizing quality of care and minimizing disruption to residents during the transition in ownership.
“For the family and for the entirety of that portfolio, this was a complete exit,” Borenstein said. “They wanted to make sure [that through the transition], the culture would only continue to grow and be nurtured … but that these communities would continue to be very well run, well operated and very well looked after.”
The buyer also has decades of industry experience, Borenstein said, noting the chain’s strong operating capabilities, and commitment to high-quality care.
Borenstein characterized the transaction as a particularly strong fit between two exceptional owner-operator organizations with shared values and a mutual focus on resident well-being and responsible facility management. Rather than representing a turnaround of underperforming assets, the acquisition brought a high-quality portfolio into the hands of an operator positioned to continue nurturing the communities and expanding its existing footprint, he said.
And this type of ownership transition may become increasingly common in the years to come, Borenstein added.
“Regardless of where I think the capital markets are, and for where much of their debt is concentrated, [the family owner-operator] had larger thoughts in mind as far as what succession planning looked like for them,” he said. “There’s going to be more of that over the next years as some of the more sophisticated, more mature operators start to think about what that next step looks like for them.”
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