Helping Two Landlords and One Operator Complete a Sale

A successful sales story of two landlords and a tenant who all wanted to transition out of
the business

How do you help two landlords sell an assisted living facility when the tenant is failing to pay rent? And, how do you transition the property without displacing residents or losing jobs?

Senior Care Realty’s Mark Van Den Broeke faced this challenge. The property was a three-building, 66-bed community-based residential facility in northeast Wisconsin. One landlord owned two buildings. The second landlord owned one building. Each was working with an independent broker.

Their current tenant, who owned the business, was failing to make payments. The landlords’ brokers approached Senior Care Realty. They wanted to sell the buildings as an investment property.

Realizing it’s easier to sell a business and property as a package, Mark took action. “Often landlords or tenants looking to exit don’t want to do it alone. But, they’re nervous and unsure of how to approach the other party,” Mark shared.

As a neutral, third party, Mark approached the tenant to determine her interest in joining the deal. He learned she was looking to exit the business when the lease ended in a few years. Working with the landlords and Senior Care Realty to sell the business and property as a package was a relief.

Mark structured a deal with the three parties, their brokers, laywers and banks. He shared the opportunity by reaching out to a targeted list of businesses. Mark knew companies looking to grow. He also knew which companies had the experience needed to operate this facility well. “Because our focus is on senior care, we quickly get the opportunity in front of the right people,” added Mark.

A midwest regional operator with about 50 buildings saw potential in the business. 100% of the payer source was Medicaid. With a 79% occupancy rate, there was upside potential in private-pay census growth. Negotiations began.

Selling a package where three parties have ownership comes with complexities. It was important everyone’s compensation remained fair, including the tenant’s. Mark facilitated conversations, often serving as a mediator. He kept the process moving forward, and the parties reached an agreement.

Mark also guided the transaction through a complicated title process. The business and properties transitioned ownership. Jobs were not lost. And, the selling parties walked away knowing 52 residents will continue to get the care they need.

Transaction highlights:
• Newer facilities built in 2012
• Included three 22-unit CBRFs located on the same campus
• Sold for $5M or $75,758 per bed.

To learn more details, reach out to Mark Van Den Broeke who served as the sellers’ lead advisor. Reach him by phone at (608) 825-4200, ext. 1007 or by email at mark@seniorcarerealty.com.

Wondering if it’s time to sell an assisted living property or business? Contact the team at Senior Care Realty. We’d love to learn your story, understand your challenges, and explore how we can help. Call (608) 825-4200 or email mike@seniorcarerealty.com.