TAMPA, FL--CLW Health Care Services Group recently closed on the sale of Carlton Cove, an Entrance Fee CCRC located in Huntsville, Alabama.
PROPERTY HISTORY (PRE-MARKETING):
•Original Bond Issue of $77,080,601 ($304,666 per unit)
•Carlton Cove experienced numerous operational challenges and negative publicity over its history including poor state surveys, physical plant
issues related to the original construction (mold) and a fi re (set by an employee). In addition, there were three management companies and four executive directors since opening.
•The property entered into Chapter 11 Bankruptcy protection in April 2006.
•Prior to CLW’s engagement to sell the asset, numerous buyers expressed interest in the community, but final terms could not be reached with any of these groups.
Allen McMurtry, (top right photo) president, CLW Health Care Services Group, says "Although we typically do not feature closed transactions in this context, we thought the process by which this asset was sold would be of interest" to the real estate industry.
PROPERTY HISTORY (PRE-MARKETING):
•Original Bond Issue of $77,080,601 ($304,666 per unit)
•Carlton Cove experienced numerous operational challenges and negative publicity over its history including poor state surveys, physical plant
issues related to the original construction (mold) and a fi re (set by an employee). In addition, there were three management companies and four executive directors since opening.
•The property entered into Chapter 11 Bankruptcy protection in April 2006.
•Prior to CLW’s engagement to sell the asset, numerous buyers expressed interest in the community, but final terms could not be reached with any of these groups.
HIGHLIGHTS:
Opened February 2003
253 Units
47% occupied (IL)
Average Entrance Fee - $232,070
Average Monthly Service Fee - $3,108
Sale Price - $27,250,000 ($107,708 per unit)
Non-profi t seller/Non-profi t buyer
MARKETING RESULTS:
•Registered 30 prospects
•Received six written bids (including the APA and a 10% deposit)
•Five of the six Bidders were deemed Qualifi ed Bidders.
THE AUCTION:
•One bidder was named the Opening Bidder and Stalking Horse Bidder.
•The advantages of receiving Stalking Horse protection included 1) Right to be the opening bid at the Auction, 2) Their APA became the
Auction APA and was bid against, 3) A 2% break-up fee would be paid if they were not the winning bidder at the Auction.
•The Opening Bidder was announced in advance of the Auction. Their marked-up APA was also distributed in advance.
•Competing bids were made in $100,000 increments. The increment could be measured in dollars and/or contract terms (ie. the
elimination of material adverse changes would be assigned a value)
•Each Bidder had 15 minutes between bids to review their strategy and present their counter offer.
•Bidders were only able to decline to make a bid in one round at the Auction. If they passed a second time, they were automatically
withdrawn from the Auction.
•The opening bid was $25,500,000 and the ending (winning) bid was $27,250,000.
OTHER DETAILS:
• Throughout the marketing process the Offi cial Resident Committee was fully involved and informed. They also had open dialogue with
the Bidders and met with 4 of the 6 groups.
• In some cases, Bidders put forth two offers, one with Stalking Horse protection (higher) and one without.
• Since the 10% deposit was non-refundable, all due diligence was performed prior to the bid date.
• CLW coordinated and maintained a due diligence virtual data room with over 8,000 pages of documents available to Bidders.
• The Bidders were required to assume the resident contracts and all Entrance Fee refund obligations.
In late November 2007, CLW was retained, with Bankruptcy Court approval, by the non-profi t sponsor under direction of the Master Trustee and Creditors. Given the long history of false disposition starts and stops, it was critical to sell Carlton Cove as quickly as possible. Timing
and certainty of closing was of critical importance.
CARLTON COVE - SALE OVERVIEW
Opened February 2003
253 Units
47% occupied (IL)
Average Entrance Fee - $232,070
Average Monthly Service Fee - $3,108
Sale Price - $27,250,000 ($107,708 per unit)
Non-profi t seller/Non-profi t buyer
MARKETING RESULTS:
•Registered 30 prospects
•Received six written bids (including the APA and a 10% deposit)
•Five of the six Bidders were deemed Qualifi ed Bidders.
THE AUCTION:
•One bidder was named the Opening Bidder and Stalking Horse Bidder.
•The advantages of receiving Stalking Horse protection included 1) Right to be the opening bid at the Auction, 2) Their APA became the
Auction APA and was bid against, 3) A 2% break-up fee would be paid if they were not the winning bidder at the Auction.
•The Opening Bidder was announced in advance of the Auction. Their marked-up APA was also distributed in advance.
•Competing bids were made in $100,000 increments. The increment could be measured in dollars and/or contract terms (ie. the
elimination of material adverse changes would be assigned a value)
•Each Bidder had 15 minutes between bids to review their strategy and present their counter offer.
•Bidders were only able to decline to make a bid in one round at the Auction. If they passed a second time, they were automatically
withdrawn from the Auction.
•The opening bid was $25,500,000 and the ending (winning) bid was $27,250,000.
OTHER DETAILS:
• Throughout the marketing process the Offi cial Resident Committee was fully involved and informed. They also had open dialogue with
the Bidders and met with 4 of the 6 groups.
• In some cases, Bidders put forth two offers, one with Stalking Horse protection (higher) and one without.
• Since the 10% deposit was non-refundable, all due diligence was performed prior to the bid date.
• CLW coordinated and maintained a due diligence virtual data room with over 8,000 pages of documents available to Bidders.
• The Bidders were required to assume the resident contracts and all Entrance Fee refund obligations.
In late November 2007, CLW was retained, with Bankruptcy Court approval, by the non-profi t sponsor under direction of the Master Trustee and Creditors. Given the long history of false disposition starts and stops, it was critical to sell Carlton Cove as quickly as possible. Timing
and certainty of closing was of critical importance.
CARLTON COVE - SALE OVERVIEW
From start to finish, the timeline below took approximately 3.7 months 
--February 7th: Offering Memoranda were distributed to registered Bidders/Buyers.
--April 4th: Bids were due in the form of a marked-up asset purchase agreement (APA) accompanied by a 10%, non-refundable escrow deposit. This deposit was non-refundable
if selected as the winning Bidder.
--April 15th: Auction was held in the offices of seller’s counsel.
--April 17th: Order approving and confirming the sale by the Bankruptcy Court
--May 30th: Closing
CONTACT:
Allen McMurtry, CLW Health Care Services Group, 4301 Anchor Plaza Pkwy., Suite 400 • Tampa, FL 33634 • • 813.349.8349 • http://www. clwhcsg.com
Licensed Real Estate Brokers
--February 7th: Offering Memoranda were distributed to registered Bidders/Buyers.
--April 4th: Bids were due in the form of a marked-up asset purchase agreement (APA) accompanied by a 10%, non-refundable escrow deposit. This deposit was non-refundable
if selected as the winning Bidder.
--April 15th: Auction was held in the offices of seller’s counsel.
--April 17th: Order approving and confirming the sale by the Bankruptcy Court
--May 30th: Closing
CONTACT:
Allen McMurtry, CLW Health Care Services Group, 4301 Anchor Plaza Pkwy., Suite 400 • Tampa, FL 33634 • • 813.349.8349 • http://www. clwhcsg.com
Licensed Real Estate Brokers
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