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Old 01-19-2016, 10:36 AM
 
29,903 posts, read 34,959,090 times
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Quote:
Originally Posted by Robyn55 View Post
The only one I have seen here is one that recently emerged from bankruptcy and is now offering certain independent living units (no ALF or SNF care) on a rental only basis.

When I look at some of these places - I wonder where all the money went. For example - Vicar's Landing has (probably) easily taken in at least $50 million in entrance fees since it opened. Yet it still has many millions of dollars of bonds outstanding ($17.8 million). And it recently borrowed an additional $16 million to pay for renovations.

Fitch Affirms Life Care Ponte Vedra (FL) Bonds at 'BBB'; Outlook Stable | Business Wire

I have lived in condos and HOAs for the last 40 years - and they have almost always had adequate reserves to pay for necessary improvements/repairs. The only exception in those 40 years was a loss caused by Hurricane Andrew (a pretty extreme event). Among other things - we lost all our landscaping (washed out to sea). The loss wasn't covered by the condo insurance - and each unit was assessed about $10k to cover the loss (our personal loss assessment coverage on our homeowners' policy paid for the assessment).

It would make me very nervous to think I was living in a place that had collected a large amount of money from me - but didn't have the financial wherewithal to pay for routine maintenance/improvements that become necessary as a result of the age of the infrastructure. Keeping in mind that - in a CCRC - you really don't own anything. All you have is a promise that you will receive certain kinds of accommodations and services now and in the future if you continue to pay (often unknowable amounts of) fees.

Stories like this would also give me great pause:

Residents sue Palo Alto retirement community for 'up-streaming' $190 million - San Jose Mercury News

http://newoldage.blogs.nytimes.com/2...he-money/?_r=0

This too:

A retirement home offers a painful reminder about monopolies’ negative effects on consumers

Robyn
Robyn, you have gone where I didn't want to go and that is the role of Hedge Funds in all of this. They are buying out homes and CCRC's and are being true capitalist buying out for pennies on the dollar now you determine if their goal in all of this is altruistic or profit.

http://www.seniorcaredevelopment.com...tsCarillon.php

S
Quote:
enior Care Development (SCD) welcomes the opportunity to invest in distressed CCRCs in both the non-profit and for-profit arenas, with the goal of restoring them to operational and fiscal health.

In late 2004, a New York-based specialized distressed-debt hedge fund alerted its contacts at SCD that a large controlling interest in bonds used to construct Carillon, a CCRC in Lubbock, Texas, was available for purchase at very advantageous terms. This was due to the failure of Carillon’s non-profit board to pay current interest on the bonds as called for in their loan documents. Carillon also failed to comply with many other covenants with the lenders of the $43,520,000 bond placement originally underwritten in 1999 by Herbert J. Sims & Co.

After two weeks spent performing due diligence on Carillon’s competition, reviewing its prior offering plan, and speaking to other professionals in the field, SCD’s special purpose entity vehicle, along with its distressed hedge fund partner, purchased $31,000,000 of the bonds at a significant discount without even the need for a visit to the community.
Quote:
An SCD team also visited Carillon, and quickly identified the issues that were draining the community financially and causing the residents stress.

Taking a pro-active stance, the bondholders helped focus Carillon’s non-profit owner on increasing cash flow by achieving more timely collection of its accounts receivable and helped reshape the CCRC’s marketing plan.


As Robyn noted in a previous post that paying attention the companies bond structure along is the marketing accurate is very important. Does more timely collection mean being paid or kicked out ASAP?
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Old 01-20-2016, 09:58 AM
 
Location: Columbia SC
9,053 posts, read 7,809,390 times
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Robyn

It is obvious you do not like places that require a "buy-in" but by the same token, you appear to be "discouraging" all CCRC's.

Is thus unfair of me to think such?

I would ask you to list the top 5 things (or more) one should look for and/or be concerned about.

Thanks
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Old 01-20-2016, 04:38 PM
 
Location: Ponte Vedra Beach FL
14,628 posts, read 17,980,344 times
Reputation: 6724
Quote:
Originally Posted by TuborgP View Post
Robyn, you have gone where I didn't want to go and that is the role of Hedge Funds in all of this. They are buying out homes and CCRC's and are being true capitalist buying out for pennies on the dollar now you determine if their goal in all of this is altruistic or profit.

Senior Care Development, LLC

S
[/b]

As Robyn noted in a previous post that paying attention the companies bond structure along is the marketing accurate is very important. Does more timely collection mean being paid or kicked out ASAP?
I don't think we're talking about the same things. You cited an article where hedge funds and similar are buying up the (distressed) bonds of CCRCs - and seeking to gain a controlling interest in them. I was talking about where all the "buy-in fees" went to/disappeared. Neither is a good thing - but they're different things. Robyn
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Old 01-20-2016, 04:53 PM
 
29,903 posts, read 34,959,090 times
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Quote:
Originally Posted by Robyn55 View Post
I don't think we're talking about the same things. You cited an article where hedge funds and similar are buying up the (distressed) bonds of CCRCs - and seeking to gain a controlling interest in them. I was talking about where all the "buy-in fees" went to/disappeared. Neither is a good thing - but they're different things. Robyn
Yes, very different yet perhaps sequential with the fee issues you mention occurring first and the swooping up of distressed assets by venture/investment groups.
http://seniorhousingnews.com/2013/03...-could-happen/
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Old 01-20-2016, 05:01 PM
 
Location: Ponte Vedra Beach FL
14,628 posts, read 17,980,344 times
Reputation: 6724
Quote:
Originally Posted by johngolf View Post
Robyn

It is obvious you do not like places that require a "buy-in" but by the same token, you appear to be "discouraging" all CCRC's.

Is thus unfair of me to think such?

I would ask you to list the top 5 things (or more) one should look for and/or be concerned about.

Thanks
Not unfair at all.

And there are plenty of articles that list the things you should look at. I am not in the business of giving tutorials .

FWIW - I am skeptical because 2 of the 4 large CCRCs where I live have gone bankrupt (Cypress Village and Glenmoor). And - when I looked at a 3rd here a decade or so ago for my late FIL - only for SNF care - Fleet Landing - the SNF smelled pervasively of urine. A nauseating smell which was a total turn-off for me. The only one that seems ok to me here is Vicar's Landing - but it is up to its eyeballs in debt (especially after a borrowing spree for recent renovations). Why on earth would I want to spend a large chunk of the equity in my mortgage-free house to buy into a debt-laden place like Vicar's Landing?

Also - when it comes to 3 of the 4 here that I know a fair amount about (all except Glenmoor down in St. Augustine) - the average age seems to be well over 80. I'm only 68 - and my husband is 70. I really don't care to live in a community where the average age is 80+.

Judging from what TuborgP says - there may be some new CCRC communities/models in some parts of the country that don't require buy-ins. I don't know. There aren't any in my neck of the woods. If/when I see something like he's describing here - I'll take a look see - if only out of curiosity.

Guess we are ornery independent people that like our single family houses in regular communities. My late FIL probably wouldn't have left his absent his stroke - and my father wouldn't have left his had he not sold it and then moved in with a girlfriend who kicked him out. I really like my house. Don't you? Robyn
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Old 01-20-2016, 05:10 PM
 
29,903 posts, read 34,959,090 times
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I was following Erickson Retirement communities from its boom days to the following and after the sale etc etc. I don't want to get sued.

Erickson files for Chapter 11; company to be sold | Long-Term Living Magazine

Quote:
Erickson Retirement Communities, a Maryland-based developer of continuing care retirement communities, filed for bankruptcy in October with a plan to sell the company for an undisclosed price.

To complete the sale to investment firm Redwood Capital Investments LLC, Erickson had to file a voluntary petition for Chapter 11 bankruptcy to restructure its more than $1 billion in debt.

Erickson, which has 23,000 residents nationwide, cited the economic crisis for its financial woes when disclosing that the company has held discussions with its lenders in recent months to restructure its debt. However, despite “good faith negotiations” with creditors, Erickson was unable to reach an out-of-court agreement.
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Old 01-20-2016, 05:15 PM
 
29,903 posts, read 34,959,090 times
Reputation: 11807
Know your retirement community

Some thoughts similar to the advice given by Robin.
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