ESI Arranges the Sale of Three Communities in Michigan for $38.5M

by Jeff Shaw

MICHIGAN — Evans Senior Investments (ESI) has arranged the sale of two senior living/skilled nursing facilities and one standalone nursing home in Michigan for $38.5 million, or $98,000 per bed/unit.

The portfolio consists of 88 assisted living units, 36 memory care units, and 270 skilled nursing beds.

An independent owner-operator sold the properties to a Midwest-based owner-operator. The names and specific locations were not disclosed.

Built in 1997, 2007, and 2008 the Senior Living portion of the portfolio was 100% private pay, while the properties’ Skilled Nursing census exhibited a high mix of Medicare Part A residents. The transaction represented the second closing tranche of this portfolio that was financed through a HUD loan assumption.

At the time of listing, the combined portfolio, including both tranches, earned $48.1 million in annual revenue with 78 percent occupancy. One of the properties was still in lease-up from a recent expansion. The total purchase price for all five communities was $68 million, representing an 8 percent capitalization rate.

“The buyer plans to explore licensing the skilled nursing beds at four of the communities for Medicaid, as these beds are only licensed to receive Medicare revenue,” says Henry Fuller, senior associate at ESI. “Licensing these beds for Medicaid will allow the operator to quickly improve the census of the portfolio.”

ESI represented the seller in the transactions.

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