Case Studies

Seniors Housing

Creating Successful Turnarounds with Opportunistic Acquisitions


$1.725M Assisted Living Memory Care Undergoes Refresh & Repositioning 


The Background: How a Turnaround Expert Saved a Problem-Plagued Facility

A challenge is never the end of the story, it is the beginning of it. Where there are challenges, there are also opportunities. Now more than ever, seniors housing owners and operators can leverage opportunities to enhance their offerings and transform facilities in their backyard for the better. While acting upon an opportunistic acquisition may be intimidating, with the right plan and resources, the payoff is exponential for revenue and residents.

Opportunistic Acquisition: As the name implies, opportunistic acquisitions are marketplace opportunities that represent risk and challenges, but simultaneously have tremendous potential for the right operator and management team. These acquisitions are the most complicated projects and may not see a return on investment for a few years. To be successful, an experienced owner or operator must helm an opportunistic acquisition with a talented in-market management team to make the turnround possible. Opportunistic facilities often have little to no cash flow at acquisition and low occupancy, but present potential to produce a tremendous amount of cash flow once changes are made.

At Wilshire Finance Partners (Wilshire) we are in the business of financing opportunities. We focus on providing bridge loans and capital strategies to finance opportunistic acquisitions in the $1 million to $10 million range, specifically when an acquisition may not meet traditional lending requirements.

The Challenge: Bridging Problems to Prosperity

An assisted living memory care facility in Central Florida riddled with survey deficiencies and mismanagement was spiraling into crisis, operating with a suspended license and regulators on the cusp of revoking licensure altogether. The facility was in prime position for a sale and new management, so much so that regulators created a short-list of buyers they would consider approving for a takeover and turnaround.

With dwindling occupancy and a poor reputation, it takes an opportunistic buyer to see the potential and commit to making significant changes for the long-haul to restore a facility’s reputation. Enter Wilshire’s client, a turnaround expert in seniors housing with experience transforming problem-plagued facilities.

This owner-operator was contributing their own cash to the equation and looking for a creative capital partner that could see the opportunity and had the resources to provide the balance of capital needed. Not many lenders are keen to lend on reputational nightmares and suspended licenses. The difference for Wilshire was this owner-operator’s successful history of transforming facilities for the better.

Creative Capital

The Solution: Turnaround Transformation

Once the facility was purchased, this owner-operator had to start with a clean slate. Occupancy was at an all-time-low while also facing significant reputational issues. The first and most important change was bringing in a new management team and new staff to focus on correcting any deficiencies and regulatory concerns. 

Seeing a need and an opportunity in the marketplace, the facility targeted low-income seniors. The rebrand of the facility included refreshing the interior with new furniture, fixtures, upgraded software, magnetic locks, and a renovated kitchen. The exterior was enhanced with new perimeter fencing and gates. This turnaround only took 18 months to complete, due to a seasoned management team that seized an opportunity to meet market demand and draw from a strong preexisting pipeline of referral sources. The owner-operator’s excellent reputation also made those referral sources confident in recommending the facility once again.

Wilshire’s creative and entrepreneurial approach enabled fast financing in approximately 40 days, providing that boost the owner-operator needed to execute the plan. From a financing perspective, the $1.725 million bridge loan was structured as a participating loan with a payment reserve, operating reserves, and a reserve for capital improvements.

This owner-operator’s vision had tremendous potential, but also involved risk that most traditional lenders would avoid. Because of the combination of the owner-operator’s experience and Wilshire’s creative capital, it was a transformational turnaround that paid off.

The Impact: Creative Capital & Growth

First lien bridge (participating loan): $1.725 million
Unit Count 38 unit, 70 beds
Pre-Acquisition Occupancy:  30% and falling
Post-Acquisition Occupancy:       95% 

During those 18 months the facility achieved stabilized occupancy and refinanced at a valuation of $3.85 million; the facility later sold for $5.7 million. With the right team in place the facility regained its rightful place in the market, while also enhancing resident care. Through a staffing overhaul, facility improvements, proper marketing positioning and a strong referral network, this opportunistic acquisition created opportunities quicker than anyone anticipated and a lasting transformation that benefitted both seniors and the greater community.

If you are an owner or operator that sees opportunities in the marketplace, you need a capital partner that can help make your vision a reality and creatively solve financing challenges. Wilshire is a leading private debt fund delivering capital solutions from $1 million to $10 million for seniors housing and healthcare real estate. As a boutique firm that combines institutional sophistication with an entrepreneurial edge, we’ve got you covered. 

Let’s talk today about how Wilshire can help you achieve your goals.

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