Case Studies

Seniors Housing

Creating Successful Turnarounds with Strategic Acquisitions


$1.725M Assisted Living Memory Care Undergoes Refresh & Repositioning 

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. With the right plan and resources, the payoff can be exponential.

The Background: How a Turnaround Expert Saved a Mismanaged Facility

An assisted living facility in Central Florida, challenged with survey deficiencies and mismanagement, was in a prime position for a sale and new management.

With dwindling occupancy and a poor reputation, the facility was in need of an experienced buyer to realize its potential and commit to making significant changes for the long-haul to restore the facility’s reputation. Enter Wilshire’s client, a turnaround expert in seniors housing with experience transforming mismanaged facilities.

This owner-operator was contributing their own cash to the equation and looking for a capital partner that could see the opportunity and had the resources to provide the balance of the capital needed. Luckily, Wilshire was familiar with this owner-operator’s successful history of transforming facilities for the better.

The Solution: Turnaround Transformation

Once the facility was purchased, this owner-operator had the opportunity to start with a clean slate. Occupancy was low and the facility was facing 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 was positioned to serve 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 with a payment reserve, operating reserves, and a reserve for capital improvements.

This owner-operator’s vision had tremendous potential, but also involved some 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: $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 strategic acquisition created opportunities quicker than anyone anticipated and a lasting transformation that benefitted both seniors and the greater community.

At Wilshire Finance Partners, we are in the business of financing opportunities. We focus on providing bridge loans and capital strategies to finance strategic acquisitions in the $1 million to $10 million range, specifically when an acquisition may require the speed and flexibility of a portfolio bridge lender.

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Don Pelgrim

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