Acquisition Strategy

acquisitionstrategyMJM Associates has developed the following criteria for acquiring existing properties. We seek properties that:

  1. Have top locations in growing markets, are well designed to support our specific programs and will market well to seniors and their adult children.
  2. Are at least 50% occupied.
  3. Have acquisition costs at 60-70% of stabilized value based on a cap value of stabilized NOI of not less than 9%, and a 25% discount to replacement cost.
  4. Are located in markets with demand coverage ratios of at least 3:1 (where the age-income adjusted demand for the product type is at least three times the total bed capacity in the Primary Market Area adjusted for in-migration) and penetration rates of under 7%.
  5. Will have sustaining occupancies (occupancy necessary to cover operating costs and debt service) of no more than 75%.
  6. Are able to achieve stabilization within 12 months.
  7. Have Debt Service Coverage at stabilization of at least 1.3 to 1.
  8. Have a projected 4-year IRR following sale or re-financing of at least 18%.
  9. Compare favorably in design, construction, services and amenities with competition in its market.
  10. Can be improved by the addition of related services (dementia care, adult day care, therapeutic outpatient services).
  11. Have been poorly marketed.
  12. Can benefit in specific ways from a change in ownership/management.
  13. Complement a regional portfolio and produce management and marketing efficiencies.

Once acquired, we stress the retention of key employees who meet our standard of excellence and by paying competitive salaries and benefits and by establishing a work environment that empowers managers and rewards excellence, initiative, the taking of responsibility. Those employees who do not meet our standards are replaced through a recruitment procedure refined by the company over its 12+ years of seniors housing management experience.