Acquisition and development costs increase in 1997 According to a recent study on assisted living conducted by Capital Valuation Group, a Newark, Del.-based research firm, the average development cost per bed in the first quarter of 1997 was $84,742, up 9% from $79,900 in 1996. Nationally, of the 21 new assisted living residences studied in the first quarter of 1997, the facilities averaged 88 units (124 beds) and an average total development cost of $10.5 million. On the other side, a recent study by Gulf/Atlantic Valuation Services Inc., a Sarasota, Fla.-based appraisal group, discusses the acquisition costs of 167 seniors housing sales that occurred between 1994 and 1997. The median price per free-standing assisted living residence was $56,548 in 1996, with an overall capitalization rate of 11.34% and an effective gross income multiplier of 3.1. Seniors facilities combining both congregate and assisted living units had a median sales price per unit of $61,905 in 1996 with a capitalization rate of 10.70%.
GMAC arranges financing for West Coast retirement community
GMAC Commercial Mortgage has arranged a $28 million loan for Woodside Terrace, a retirement community in Redwood City, Calif. Woodside Terrace is a 273-unit upscale retirement community with 193 independent living units and 81 assisted living units. The long-term care property has an average occupancy rate in excess of 90% for 1997. The borrower was The Hillsdale Group, a limited partnership joint venture between Woodside Terrace and financial partner, The Fremont Group.
GFI Capital provides $3.6 million for Palisades Nursing Home
GFI Mortgage Bankers Inc., a division of New York-based GFI Capital Resources Group, has provided mortgage financing for Palisades Nursing Home located in Guttenburg, N.J. The 108-bed skilled nursing facility received $3.6 million in financing originated by GFI's Aaron Jungreis and John DiCrocco in a 10-year loan at 9.41% with 25-year amortization. GFI Capital is based in Manhattan with offices in New York, New Jersey, Connecticut and Florida.
Seniors housing goes high-tech on the Internet
2BeMA Network Inc., a San Francisco-based brokerage and business electronic marketing firm, has brought seniors housing to the realm of the World Wide Web. The marketing firm is the designer of the nation's largest online resident referral network called 2BeMA's Senior Living Online Network. There are two online services offered via their website that deliver interactive communications to two main audiences. ShoNet connects industry professionals, investors and owners to seniors housing, long-term care and seniors service providers by placing a comprehensive set of marketing and brokerage services at their fingertips. As well, LivOn is an online service that has amassed a database of more than 60,000 seniors facilities nationwide, providing a referral network connecting families to senior care providers. At present, the referral network has placed over 1,000 seniors per week with facilities and a healthy 200 additional referrals per month are projected for 1998. The Senior Living Online Network can be reached at www.shonet.com or www.livon.com.
New York's biggest housing boom is seniors living
According to the New York/ New Jersey Chapter of the Society of Marketing Professional Services (SMPS), the seniors healthcare facilities market represents the single biggest housing boom in New York. Assisted living is the largest contributor at present with growth of $12 million and a projected $75 million by the year 2005. Statistics indicate that the market for seniors healthcare facilities will be very healthy over the next 50 years. The U.S. Census Bureau projects that the number of persons age 65 and over will increase from 31 million in 1990 to nearly 65 million by 2030.
WMF Huntoon Paige provides $11.7 million for nursing homes
Atlanta-based WMF Huntoon Paige, a wholly owned subsidiary of The WMF Group, provided $11.78 million in FHA-insured financing for two nursing homes in Oakland, Md. The first loan for $7.01 million went to refinance Cuppet and Weeks Nursing Home, a 153-bed facility, and the second loan went to the Dennett Manor Nursing Home to refinance the 129-bed facility. The loans, which are at 8% with 35-year amortization, are part of FHA's 232/223 program.
Trust Mortgage funds $6.9 million for FHA Program
Trust Mortgage Co. Inc., a Waltham, Mass.-based mortgage company, refinanced a $6.9 million loan for the Amherst Nursing Home under the FHA's 232 loan program. The loan combines an existing first mortgage refinanced with 40-year term at 8.375% and 40-year amortization. Completion is slated for this December.
Associate Editor Randy Henry covers the seniors housing news beat for NREI. He welcomes comments and news items via e-mail to [email protected]