The JCH Group - Page 16 of 16 -

Owners of skilled nursing facilities looking to wait for the right time to sell should wait no longer. Facilities are receiving all-time high valuations, properties are worth more and buyers are making aggressive offers.

Sell When Your Facility Is Doing Its Best

Most sellers are resistant to sell an operation that performs well and they find it counter-intuitive to sell at all. Historically, however, transactions that take place when your SNF is performing at its peak yields the highest valuations. This is because income-producing properties, your assets, are valued upon their income stream. When your income stream is at its strongest point, the valuation reflects that performance.

Pros and Cons of a Fast Deal

We sell as fast as clients would expect, but from our experience, deals that take a bit longer to consummate are more profitable from the seller’s position.

Fast deals are made because of distress – issues in finances, licenses and partnership—which prompts for quick deals for a less favorable price. On the other hand, the sellers who have time are typically owners of high performing SNFs seeking a deal with the highest payout. This additional time allows buyers to visit different debt and equity sources and achieve the cheapest debt, which allows them to pay the highest price. Additionally, it allows for the skilled nursing brokerage to create a deal that breaks through the current market price.

Pros of selling fast:

Money goes in the bank today, and a dollar today is worth more than a dollar tomorrow.
Less chance of profits fluctuating during the escrow timeline. This is because during the sales process, buyers often request a discount prior to closing when the facility experiences dramatic profit decline.
Less chance for the general marketplace to discover you are selling. When your SNF is for sale, profitability wavers and the facility staff tends to leave.

Cons of selling fast:

Buyers negotiate a lower price. A quick closing usually requires the buyer to pay all cash.
Less time results in less marketing exposure that is necessary to create a multiple-bid situation.
Less time to construct a financial plan for your proceeds from the sale.

As a generalization, quick closing deals call for the seller to lower the price of the skilled nursing facility for sale. Many factors are taken into consideration regarding the speed of transaction versus profitability and a thorough assessment of all situational factors results in a well-advised decision. With the assistance of a skilled nursing brokerage, quality buyers looking to buy skilled nursing facilities are matched with the seller, maximizing payout.

The JCH Group as Your Choice Skilled Nursing Brokerage

If you’re interested in selling your skilled nursing facility or buying a skilled nursing facility, feel free to contact one of our team members. All of our valuation assessments are a complimentary service. We are happy to sign any confidentiality agreements stating that the JCH Group will not disclose any financial information provided to us to another party.

The information that is provided is taken for analysis, digested and summarized for the owner. We then provide the best market price for your property. The only time the seller owes anything to the broker is when the deal closes with the buyer introduced by the broker.

The JCH Group has been the choice skilled nursing brokerage for some of the most successful operators today. To obtain an assessment by our team, call us today.

Don’t Miss Senior Housing’s Perfect Storm

With so many seniors in the United States today, there is a great and pressing need for assisted living. Growing demands for senior healthcare facilities prompts people of action to create supply. Though the senior housing marketplace may have been underestimated in the past, recognizing the urgent need for these facilities has changed investors’ minds; as a consequence, nursing home brokerages business is booming.

Several important factors contribute to a successful senior housing market such as market climate, buyers and sellers and whether or not there are assisted living homes for sale. There are very few times when these factors align in such a way to create the perfect opportunity for anyone looking to get involved.

Buyers and Sellers Get the Best of Their Own Worlds

Owners with residential care homes for sale experience the benefit of all-time low capitalization rates, maximizing on profits from high sales prices. Those wanting to buy healthcare properties have the advantage of low interest rates from lenders who see the current and future strength of this market.

Because there is plenty of debt and equity in the market, there are several groups of financiers eager to join the game. Larger private equity firms, real estate investment trusts (REIT) and even high-net worth individuals are all investing into the senior housing market, creating plenty of opportunities for bigger profits and growth out of assisted living properties for sale.

There are Numerous Skilled Nursing Facilities for Sale

Sufficient inventory gives buyers choices and because they have the financing needed to complete the deal, transactions take place regularly.

Even though skilled nursing facilities have recently experienced a reimbursement shake-up that resulted in distressed assets, particularly in California and Illinois, it also created a high inventory for buyers, offering a wealth of choices, making it easier to buy skilled nursing facilities. The availability of both debt and equity at competitive rates has made it the perfect time to purchase assisted living facilities and skilled nursing facilities.

Buyers for assisted living facilities are encouraged by the presence of debt, but low inventory of high-quality facilities stifles speedy transactions. However, the facilities that do become available trade at low cap rates.

Operators Sustain Facilities with High Quality Service

Operators are the most important player in the success of any facility after the sale. Because they are responsible for managing the facilities on a day-to-day basis, their role is vital in sustaining high quality homes with dependable services that meet the increasing demands for assisted living and skilled nursing. Inevitably, their profits substantiate a healthy market and prove that it is an investment in both the short and long terms.

The number of seniors needing professionally-operated assisted living and skilled nursing will triple in the next 20 years. Though skilled nursing operators may face challenges with some undergoing bankruptcy, the vast majority performs well, maintaining high quality facilities and services.

The JCH Consulting Group Approach to Senior Housing

As a full-service senior housing brokerage, JCH continues to make honest and career-long relationships with buyers and sellers in an effort to establish caring environments for every senior seeking assisted living.