An independent operator recently exited from the nursing home industry in Louisiana in a deal that, according to Evans Senior Investments president and founder Jeremy Stroiman, is the highest price per bed ever sold in the state.
The 189-bed skilled nursing community, Mansion de Lafayette, sold for $30 million, or $159,000 per bed.
Stroiman said this sale reflects what he believes to be a push from larger, regional operators to grow and for smaller, independent operators to exit the industry altogether.
“We are already seeing it in our pipeline,” Stroiman said. “We’re eight times busier than we ever have been and it’s all independent owners on the nursing side looking to exit.”
He said that in the state of Louisiana nursing home consolidation can already be seen.
“In the state of Louisiana, the reimbursement rate is decent, staffing ratios are lower than other states so they can run better margins,” Stroiman explained. “We sold it to a regional operator that’s going to have some economies of scale and continue to grow their platform.”
“There’s only a few independent owners left and we’re in the process of representing them right now,” Stroiman said.
Mansion de Lafayette had a history of stabilized performance with census averaging 93% to 95% and features 125 private rooms, but due to bans on admissions and a lack of elective surgeries from hospitals, census declines were noted from the 2019 average of 93% to 82% as of August.
Stroiman said the independent operator wanted to exit the industry due to “COVID, staffing, he was getting older and valuations are at an all-time high.”
“We’re breaking records everywhere so it’s a good time to exit,” he added. “We’re getting premium prices so unless you want to ride this thing out for another 10 years everyone’s looking to sell, every independent owner, they just don’t have the economies to weather the storm.”
Stroiman said he’s also seen an increase in private equity interest in the sector.
“We had bids from private equity [in this deal].,” he said. “We ended up giving it to somebody, a regional guy, but we definitely bid him up to make sure he was paying market [prices]. Private equity from the East Coast is still paying the highest number.”
Editor’s Note: The name of the source with Evans Senior Investments has been corrected. SNN regrets the error.
Companies featured in this article:
