ESI Brokers Sale of 21 Skilled Nursing Facilities in the Midwest

CHICAGO — Evans Senior Investments (ESI), a Chicago-based brokerage firm, has arranged the sale of 21 skilled nursing facilities in the Midwest. The transactions represented the exit from the long-term care industry of a a regional owner-operator.

The portfolio consisted of three separate transactions for each state — Indiana, Iowa and Illinois. The combined purchase price for all three transactions was $86 million, or $54,0000 per functional bed/unit.

The Indiana portfolio consisted of 11 communities totaling 751 licensed skilled nursing beds and 109 senior living units. At the time of marketing, the average census was 78 percent with total portfolio revenue of $47 million. While under contract, census reached a low of 66 percent as a result of the ban on admissions and the lack of elective surgeries from hospitals. The buyer was a regional owner-operator looking to grow in Indiana.

The Iowa portfolio consisted of seven communities in mostly tertiary markets totaling 512 licensed skilled nursing beds and 75 senior living units. At the time of marketing, the average census was 75 percent with total portfolio revenue of $29.7 million. Most of the communities were underperforming from a net operating income margin, and four of the properties were losing money before paying their debt service. Similar to the Indiana portfolio, census reached a low of 68 percent as the result of COVID-19 outbreaks in multiple communities and a lack of new admissions. The ESI team secured the same buyer as the Indiana portfolio, which originally intended to operate the buildings. However, with the COVID-19 environment and the challenges of operating in a new state, the buyer hired ESI to secure a different tenant instead.

The Illinois portfolio consisted of three communities all located in Southern Illinois totaling 293 licensed skilled nursing beds. At the time of marketing, the average census was 72 percent with total portfolio revenue of $13 million. Most of the communities were underperforming from a net operating income margin with two of the three properties losing money before debt service. The ESI team originally secured the same buyer as the Indiana and Iowa portfolio. However, midway through the transaction the buyer hired ESI to sell the Illinois portfolio. A regional, Illinois-based owner ultimately emerged as the winning bidder.