The Engagement
Decker Healthcare Group advised a private investor on the sale of its passive, minority limited-partner interest in a Washington, DC skilled nursing facility, after the client received an unsolicited offer to purchase the position.
Rather than simply provide a valuation, Decker guided the client through what was actually being sold (a non-controlling ownership position, with limited rights and a narrow universe of willing buyers) and how that interest should be weighed distinctly from the value of the underlying real estate itself.
To inform the recommendation, Decker's review spanned the ownership and subscription documents, the triple-net lease and its escalation structure, the operator's financial performance and lease coverage, and the facility's competitive position within a supply-constrained, high-barrier Washington, DC market. The team interviewed limited-partner investment groups active in skilled nursing real estate to establish the cash-on-cash returns buyers require for comparable passive positions today.
Decker advised that while the underlying real estate is strong and well-positioned, the value of a passive, illiquid, non-controlling interest is more constrained, and that, measured against prevailing market return requirements, the offer represented a reasonable and favorable outcome for the client to accept. The team also counseled the client on the considerations most relevant to transacting, completing the engagement within roughly one week.
