California, February 5, 2016  JCH Consulting Group is pleased to announce the successful sale transactions totaling $18,900,000.00 consisting of two specialized assisted living and memory care facilities located in Central and Southern California. Totaling 163 beds, both facilities focus on providing high-acuity memory care and assisted living services within a secured setting.

The San Bernardino County facility, constructed in 2002, includes 86 units, 95 licensed beds of which 24 are memory care units. The sales price was $13,600,000.00, equating to $158,140 per unit. The occupancy rate was 86% at the time of the closing and helped the seller achieve a sales price well above the appraised value. The purchaser was a national senior housing owner/operator, and the seller was a privately held single asset owner/operator.

The San Joaquin County facility, constructed in 1970, is comprised of 44 units with 68 licensed beds and an occupancy rate of 69%.The sales price was $5,300,000, equating to $120,455 per unit. The purchaser was a real estate investment fund with a majority of funding coming directly from China, the purchaser plans on investing $1,500,000 in improvements to the physical plant. The seller was a privately-held single asset owner/operator. This transaction sold well above the appraised value as well.

JCH executed the transactions expeditiously and seamlessly having conducted an exclusive and brief marketing period of only 30 days. The process yielded multiple highly competitive offers from qualified prospects with several offers at or exceeding the initial offering price.

Jim Hazzard and Nick Stahler were the lead agents on both transactions.

JCH Senior Housing Investment Brokerage is pleased to announce the successful sale of a senior housing community in Southern California for $95,500,000 − the largest single asset transaction of 2019.  The Orange County, CA asset, totaling 214 units, consists of Independent Living, Assisted Living and Memory Care units. 

The JCH team spearheaded a confidential marketing process on behalf of the owner, a national owner/operator looking to execute on the current capitalization rate environment.  JCH received several competitive bids in less than thirty days.  Ultimately the successful buyer was a national private equity firm very active in the seniors’ space from Chicago, IL.

The seller’s willingness to retain operations, high barriers to entry, 94% occupancy and a 53% operating margin greatly enhanced this community’s desirability and the buyer’s willingness to pay a record-setting single asset price.  The JCH team was very instrumental in creating this demand, working through extremely complex transaction hurdles to bring this sale to completion.  Nick Stahler, Mike Mooney and Jim Hazzard were lead advisors in the transaction.

March 1, 2020 – Southern California

JCH Senior Housing Investment Brokerage is pleased to announce the successful sale of a 49-
Bed Assisted Living facility in Riverside County, California.
The team at JCH conducted a confidential marketing campaign on behalf of the seller, a family
owned owner/operator, seeking to retire after more than 20 years of operation. JCH used their
intimate knowledge of regional owner/operators to run a highly targeted marketing procedure
ultimately receiving several competitive offers. A local owner based in the marketplace, seeking
to grow their portfolio, was the successful bidder. JCH remained active and engaged with the
seller, buyer and lender throughout the sales process. Sales price was $5,000,000 or
approximately $140,000 per unit.

Jim Hazzard, and Cindy Hazzard handled the transaction process.

About JCH Consulting Group

JCH Consulting Group is a full-service real estate brokerage firm with the singular focus on the
long-term care industry. JCH brokers the complete spectrum of Senior Care facilities,
including Independent Living, Assisted Living, Skilled Nursing, CCRC, and Memory Care. For
more information, contact Jim Hazzard 714-463-1677 [email protected]; or Cindy
Hazzard 714-463-1672; [email protected].

March 1, 2020 – Southern California

JCH Senior Housing Investment Brokerage is pleased to announce the successful sale of a 49-
Bed Assisted Living facility in Riverside County, California.

The team at JCH conducted a confidential marketing campaign on behalf of the seller, a family
owned owner/operator, seeking to retire after more than 20 years of operation. JCH used their
intimate knowledge of regional owner/operators to run a highly targeted marketing procedure
ultimately receiving several competitive offers. A local owner based in the marketplace, seeking
to grow their portfolio, was the successful bidder. JCH remained active and engaged with the
seller, buyer and lender throughout the sales process. Sales price was $5,000,000 or
approximately $140,000 per unit.

Jim Hazzard, and Cindy Hazzard handled the transaction process.

About JCH Consulting Group

JCH Consulting Group is a full-service real estate brokerage firm with the singular focus on the
long-term care industry. JCH brokers the complete spectrum of Senior Care facilities,
including Independent Living, Assisted Living, Skilled Nursing, CCRC, and Memory Care. For
more information, contact Jim Hazzard 714-463-1677 [email protected]; or Cindy
Hazzard 714-463-1672; [email protected].

The National Senior Housing Market: 2020 Midyear Review

The Senior Housing sector ushered in 2020 on track for another record-setting year… then COVID-19 happened.  As this global pandemic wreaked havoc around the world, it became very apparent that those over the age of 65 were particularly vulnerable.  Unfortunately, the Senior Housing sector as a whole and, more specifically Skilled Nursing facilities were the hardest hit by the virus.  As the pandemic spread, the entire Senior Housing sector responded by locking down facilities to all non-essential people in an attempt to slow its progression.  Transactions far enough along in the process continued to close while the vast majority of operators and investors hit the pause button, focusing on the well being of residents.

The Senior Housing industry, while a need-driven business, is at least for the near future facing some uncertainty. Divided into three major market segments: unlicensed facilities such as Independent Living (IL), Active Adult, and licensed facilities which would be Skilled Nursing Facilities (SNF) and Assisted Living Facilities (AL) are each facing unique challenges.

Independent Living/Active Adult communities are seeing a decline in occupancy as aging seniors hit the pause button on moving until the health crisis diminishes.  As stated in previous outlooks, Independent Living communities serve a younger/healthier population and are less need driven and therefore are more a discretionary move.

Skilled Nursing facilities by their nature are caring for the most significant percentage of “High-Risk” seniors with underlying medical conditions, and have been particularly hard hit by COVID-19.   It’s important to point out that CMS Administrator Seema Verma recently said in part “The vast majority of nursing homes across this country didn’t have significant numbers of cases — or didn’t even have any cases, or any deaths in their nursing homes…”.  As the sector emerges from the COVID-19 crisis amid sweeping regulatory changes, significant increases in expenses related not only for additional PPE but increases in wages could force the exit of “mom & pop” operators unable to weather the financial storm.  If a large number of facilities hit the market as distressed assets the valuations may well decrease affecting the sector as a whole.

The Assisted Living sector has also been affected by COVID-19 as facilities across the nation put strict visitation and move-in protocols in place to protect the seniors they care for.  While temporary in nature, the unfortunate outcome has been a decrease in the census and an increase in expenses.  Unlike Skilled Nursing Facilities, Assisted Living communities have not received any federal COVID-19 relief funding to help offset the increased costs of PPE and wage increases.

As operators begin the process of relaxing these protocols the focus is shifting to easing concerns that once seniors move into a facility they won’t be isolated from other residents and that their friends and families will be allowed to visit.

We anticipate potential buyers continuing to look for multi-level assets or for ways of potentially adding an additional component to an assisted living facility acquisition in the second half of  2020.   As the economy begins to reopen and more data becomes available, I believe history will show Senior Housing stepped up to the plate, quickly responded to recommended changes given by CMS, and emerged in a better position to combat any future outbreaks.

Senior Housing Defined

Since the outbreak of the COVID-19 Pandemic, the entire senior housing sector has been lumped into the term “Nursing Home,” and that is simply incorrect and unfair.  There are five specific categories within the Senior Living Industry, Independent Living (IL), Assisted Living (AL), Memory Care (MC), Skilled Nursing Facilities (SNF) and Continuing Care Retirement Communities (CCRC).

Independent Living

Independent Living communities cater to younger, healthier seniors with fewer medical issues.  Independent Living communities are frequently referred to as Retirement Communities, Congregate Care, 55+ Communities, Active Adult or Senior Apartments.  Typically, residents live in fully equipped private apartments.  Most of these Independent Living communities offer custom-designed meal programs for purchase and arrange numerous social outings and events that residents can choose to participate in.  Most residents are private pay, although there are some government funded programs available. It is important to note that Independent Living communities are not licensed.

Assisted Living/ Memory Care

Assisted Living/Memory Care facilities are licensed by the state to care for elderly residents. Assisted Living facilities are designed for seniors who are not bed-ridden, but need a little help with activities of daily living.  This assistance comes in many forms depending upon the individual needs; primarily assistance with medications. Most seniors do well if they simply take their medications as prescribed.  Other activities of daily living such as assistance with dressing, social outings and events give residents a sense of normalcy. The facility typically provides 3-full meals daily, as well as housekeeping.  Residents live in private apartments. Apartments have little to no kitchen area, instead residents meals are served in a central dining room where they get to mingle and discuss the days events.  There is staff present 24-hours per day to assist in the day to day needs and activities of each resident.

A Memory Care facility specifically deals with seniors with Dementia or Alzheimer’s and are secured to ensure residents don’t wander off unaccompanied.  Residents live in private or semi-private rooms.  Most residents are private pay.

Skilled Nursing Facility

Skilled Nursing facilities care for the frail elderly requiring a higher level of medical care and assistance. These facilities are often called Convalescent Care, Nursing Center, Nursing Home, Rehabilitation or Long-Term Care Facility. They are staffed 24-hours with licensed nurses and other care professions.  While residents typically share a room (semi-private or three-bed wards), private rooms are also available. Meals are served in a central dining room unless the resident is too ill to participate. Many Skilled Nursing facilities also provide short term rehabilitative stays for those recovering from an injury, illness or surgery.  Payment sources include private pay, commercial plans, Medicare and Medicaid.  Skilled Nursing are licensed by the state.

Continuing Care Retirement Communities (CCRC)

Continuing Care Retirement Communities are set-up on a large campus and usually include Single Family Homes, Independent Living, Assisted Living, and Skilled Nursing components all on the same campus.  In addition to monthly fees, there is typically a large “buy-in” or “entry” fee.  The  concept  allows for  a healthy senior to into the community and spend the rest of their life there as they age in place among friends and neighbors.  When more dailycare is needed they have the ability to move into Assisted Living or Skilled Nursing co-located on the campus.

Work with The JCH Group for Your Senior Housing Investments

The JCH Consulting Group works with hundreds of operators, investors and specialists to successfully navigate the senior housing industry. With well-researched and informed decisions, our team routinely builds strong and solid portfolios.

No matter the size or type of real estate asset, we are your top resource in making the most of your senior housing investments in the senior housing industry. By sticking to proven, longstanding industry principles, our guidance in the sector has always weathered storms in the senior housing industry.

For expert advice  work with the investment specialists at the JCH Group. Learn more about the senior housing industry and receive a free business valuation at your convenience.

What will the Senior Housing Space look like after COVID 19

There has been much speculation about how the Shelter in Place orders will affect census at Assisted Living, Memory Care and Skilled Nursing facilities throughout the country.  Most operators that we at JCH are talking to have, at a minimum, put in place very stringent protocols for accepting move-ins with most tapping the brakes.  Is this a wise choice?  In my opinion, yes. However, now is not the time to stop reaching out to the community prospecting for future residents. We must all keep in mind that moving into an Assisted Living, Memory Care and most certainly Skilled Nursing is in most cases not an option, it is need driven. Utilizing safe and effective marketing tools such as virtual tours, are helping facilities continue to reach those who need them and still protect potential residents, current residents, and staff.

What will happen to the facility values?

This is a bit difficult to answer, it will depend on several factors, the most important one being what the net operating income (NOI) looks like.  If your NOI drops significantly, then so will the value of your facility; If census drops significantly, the value will also likely be affected.

Over 60% of residents in Skilled Nursing, Assisted Living and Memory Care facilities are on either Medicaid or Medicare, and the government certainly isn’t going to stop paying.  Most “private pay” residents’ assets are either in cash or bonds, so the volatility in the stock market isn’t much of a factor in their ability to pay monthly rent and care fees moving forward. Therefore, an ability to pay is likely not an issue.

What does this all mean? We simply continue to provide outstanding care and compassion for the residents we are responsible for.

How long will the sale of Assisted Living, Memory Care and Skilled Nursing facilities take? 

The consensus in the industry is that everyone needs to count on much longer due diligence and funding times. Again, until the restrictions surrounding the sector ease, due diligence cannot be completed because access to onsite visits by appraisers, inspectors etc. cannot be performed.

Are there buyers out there?

The answer is a definite yes, but the importance of vetting potential buyers is more important than ever. The more experience the buyer group has within the industry, the more likely it is they will be able to obtain a loan.  Lenders that we have spoken to are still considering deals, but they are being very cautious about moving forward with inexperienced borrowers.

Work with The JCH Group for Your Senior Housing Investments

The JCH Consulting Group works with hundreds of operators, investors and specialists to successfully navigate the senior housing industry. With well-researched and informed decisions, our team routinely builds strong and solid portfolios.

No matter the size or type of real estate asset, we are your top resource in making the most of your senior housing investments in the senior housing industry. By sticking to longstanding industry principles, our guidance in the sector has always weathered storms in the senior housing industry.

For expert guidance, work with the investment specialists at the JCH Group. Learn more about the senior housing industry and receive a free business valuation at your convenience.

Improve Your NOI With These 5 Steps

In 2019, as a Skilled Nursing Facility (SNF) owner/operator you endured the endless preparation for PDPM, the countless binders satisfying the requirements for your ROP Phase 3 programs, the uncertainty of AB5, oh and let’s not forget those staffing waivers. If you’ve made it to the other side and found yourself smiling when you imagine selling your facility, let’s just pause for a moment and celebrate what you and your staff have accomplished.

If you still imagine yourself sipping a Mai Tai on a tropical beach then let me point out that the best time to sell is not when you’re frantically looking to exit, but rather when your Skilled Nursing Facility’s Net Operating Income (NOI) demonstrates a well performing facility. While there truly is a buyer for every Skilled Nursing, Assisted Living or Memory Care facility, if time is not a factor in your decision, then I’d encourage you to take a few months to focus on your bottom line. Here’s five ways you can positively effect change in your facility, and improve your NOI:

  1. Focus on your top line – Be honest, when’s the last time you reviewed your managed care contracts? Has the acuity of your residents increased, yet your outdated contracts pay you the same rate for one IV medication, or four? If you’re not tracking when your renegotiation window comes up, or seeking increases for clinically complex residents, then you’re leaving revenue on the table. If your clinical team is providing complex care, develop relationships with your managed care case managers and request authorizations for the next level available in your contract, or exclusions for expensive medications and/or DME equipment.
  2. Strengthen your MDS team – If your facility accepts Medicare then I encourage you to invest in a strong MDS nurse. The MDS is the window to your facility’s outcomes with PDPM, Star Rating, QASP and a myriad of other externally driven data models pulling from their reports. These nurses must be able to glean from the hospital H&P the best diagnosis to code. If they accurately capture the care that was provided at the acute, it can increase your daily rate.
  3. Hospital Readmissions – Readmission rates aside, if your noc shift/weekend supervisor is not confident in assessing residents and addressing change of conditions in place, with the resident’s physician, then you will undoubtedly bleed census. Take the time to move staff into the proper roles/shifts, implement assessment tools such as SBAR, and celebrate nurses whose leadership fosters confidence and decisiveness in those moments of uncertainty.
  4. Marketing is more than answering the phone. Have you called your skilled nursing, assisted living or memory care facility recently during stand up or shift change? If it takes more than a few rings for your staff to answer, you’re missing opportunities. More importantly, have you recently asked a random employee to give you a tour? Every team member should be able to give a tour and identify what makes your facility special. While not every employee can rattle off the details of how you’ll collect share of cost, families are concerned about whether their loved one will be received warmly and cared for, will observe whether staff greet them as they walk the facility, and how professional their tour guide was.
  5. Know your expenses – If you’re not reviewing your profit and loss (P&L) statement monthly and sharing it with your department heads, you’re missing an opportunity to hear creative ways to save money, and get buy-in from those team members who should be your gatekeepers. Your employees know which vendors provide quality supplies, food products, and services. Seek their feedback and consider changing vendors if the premium price you’re paying doesn’t reflect in the consistency of the products or the outcomes of the services provided.

Finding creative ways to turn key staff into “champions for change” will supercharge your bottom line and have your facility market ready in no time.

Navigate the Senior Housing Industry with the JCH Group

We are a team of exceptional brokers and investment specialists, providing keen insight and advice to every client and customer. Our combined experience allows you to make your senior housing investment flourish within the senior housing industry.

We offer a variety of services, whether you choose to buy/sell assisted living facilities or buy/sell skilled nursing facilities. Our team manages investment portfolios of all types and sizes to increase your wealth and profitability.

The JCH Group investment specialists are available with real-time information and extensive experience to make intelligent decisions that deliver unmatched results. To make your next senior housing investment the right one, work with the JCH Group, the leading brokerage of the senior housing industry.

Spring NIC Conference 2020 Recap

The spring regional senior housing investors NIC conference was held this year from March 4-6, 2020 in beautiful San Diego, CA. This location is a favorite for The JCH Senior Housing Investment Brokerage, as it’s just a short 2-hour drive from our corporate headquarters in Orange County, CA.

Attendance

The conference appeared to be well attended, but due to the outbreak of the Coronavirus a significant number of registered participants opted not to attend. Regardless of attendance, it was a productive event for all those in attendance. The JCH team was able to complete over 30 one-on-one meetings in just two days’ time. We had the opportunity to meet with various senior housing and assisted living investors interested in either buying or selling independent, assisted living, memory care facilities and skilled nursing facilities. There is no other conference in the industry where you can complete this number of meetings in such a short amount of time. Some of the hot topics discussed at NIC were mirrored by those of the ASHA conference, however there were a few additional key takeaways from this event.

Coronavirus

As one might expect the Coronavirus was on the mind of every attendee, elbow bumps instead of handshakes and hugs became the norm when greeting old and new friends alike. I was impressed with the way the senior housing industry was springing into action to deal with this national healthcare crisis. Restricting visitors, screening vendors as well as employees all to keep residents safe and healthy.

Reoccurring Issues in The Senior Housing Industry

The most pressing and critical topic of discussion other than the virus continues to center around labor shortages and low census. Assuming there are no major economic issues in the next couple of years, and who knows what the economy will do as this virus progresses, these will be the largest issues facing the senior housing industry. Looking forward, as new assisted living facilities continue to open, both labor issues and census issues will continue to be problems.

It is generally agreed that the Skilled Nursing sector is rebounding from decade low census and will likely complete a full rebound sooner than the Assisted Living and Memory Care sectors. This is primarily due to the lack of new supply in the Skilled market. With fewer new beds coming on line, it allows existing assets to capture new patients entering the market. The Assisted Living and Memory Care markets have a much longer road ahead to recovery, due to the significant new supply across the country.

Oversupply of Equity in The Senior Housing Market

Lastly, some good news. There is still an oversupply of equity in the marketplace, this is equity that must be placed to earn a return. A surplus of equity, low interest rates and plenty of debt available has kept pricing high. Call us today to learn more about what this means to you.

The JCH Group Can Answer Any Senior Housing Question

Overall it was a very robust and productive NIC conference for the JCH team. If you need an advisor in the senior housing space, look no further. The JCH Group offers unmatched expertise and experience in the Senior Housing industry. Call us today to answer any senior housing questions you may have.

5 Ways To Improve Your Skilled Nursing Facility’s Net Operating Income (NOI)

In 2019, as a Skilled Nursing Facility (SNF) owner/operator you endured the endless preparation for PDPM, the countless binders satisfying the requirements for your ROP Phase 3 programs, the uncertainty of AB5, oh and let’s not forget those staffing waivers. If you’ve made it to the other side and found yourself smiling when you imagine selling your facility, let’s just pause for a moment and celebrate what you and your staff have accomplished.

If you still imagine yourself sipping a Mai Tai on a tropical beach then let me point out that the best time to sell is not when you’re frantically looking to exit, but rather when your Skilled Nursing Facility’s Net Operating Income (NOI) demonstrates a well performing facility. While there truly is a buyer for every Skilled Nursing, Assisted Living or Memory Care facility, if time is not a factor in your decision, then I’d encourage you to take a few months to focus on your bottom line. Here’s five ways you can positively effect change in your facility, and improve your NOI:

  1. Focus on your top line – Be honest, when’s the last time you reviewed your managed care contracts? Has the acuity of your residents increased, yet your outdated contracts pay you the same rate for one IV medication, or four? If you’re not tracking when your renegotiation window comes up, or seeking increases for clinically complex residents, then you’re leaving revenue on the table. If your clinical team is providing complex care, develop relationships with your managed care case managers and request authorizations for the next level available in your contract, or exclusions for expensive medications and/or DME equipment.
  2. Strengthen your MDS team – If your facility accepts Medicare then I encourage you to invest in a strong MDS nurse. The MDS is the window to your facility’s outcomes with PDPM, Star Rating, QASP and a myriad of other externally driven data models pulling from their reports. These nurses must be able to glean from the hospital H&P the best diagnosis to code. If they accurately capture the care that was provided at the acute, it can increase your daily rate.
  3. Hospital Readmissions – Readmission rates aside, if your noc shift/weekend supervisor is not confident in assessing residents and addressing change of conditions in place, with the resident’s physician, then you will undoubtedly bleed census. Take the time to move staff into the proper roles/shifts, implement assessment tools such as SBAR, and celebrate nurses whose leadership fosters confidence and decisiveness in those moments of uncertainty.
  4. Marketing is more than answering the phone. Have you called your skilled nursing, assisted living or memory care facility recently during stand up or shift change? If it takes more than a few rings for your staff to answer, you’re missing opportunities. More importantly, have you recently asked a random employee to give you a tour? Every team member should be able to give a tour and identify what makes your facility special. While not every employee can rattle off the details of how you’ll collect share of cost, families are concerned about whether their loved one will be received warmly and cared for, will observe whether staff greet them as they walk the facility, and how professional their tour guide was.
  5. Know your expenses – If you’re not reviewing your profit and loss (P&L) statement monthly and sharing it with your department heads, you’re missing an opportunity to hear creative ways to save money, and get buy-in from those team members who should be your gatekeepers. Your employees know which vendors provide quality supplies, food products, and services. Seek their feedback and consider changing vendors if the premium price you’re paying doesn’t reflect in the consistency of the products or the outcomes of the services provided.

Finding creative ways to turn key staff into “champions for change” will supercharge your bottom line and have your facility market ready in no time.

Navigate the Senior Housing Industry with the JCH Group

We are a team of exceptional brokers and investment specialists, providing keen insight and advice to every client and customer. Our combined experience allows you to make your senior housing investment flourish within the senior housing industry.

We offer a variety of services, whether you choose to buy/sell assisted living facilities or buy/sell skilled nursing facilities. Our team manages investment portfolios of all types and sizes to increase your wealth and profitability.

The JCH Group investment specialists are available with real-time information and extensive experience to make intelligent decisions that deliver unmatched results. To make your next senior housing investment the right one, work with the JCH Group, the leading brokerage of the senior housing industry.