Encouraged by increased valuations caused by low interest rates and strong demand for senior housing services, senior housing providers and investors continue to acquire properties at a rapid clip all across the country.
Acquisition Activity Ramps Up in the West and Midwest
In addition to recently launching a $250 million senior living platform, Chicago Pacific Founders (CPF) purchased the independent living communities Echelon Senior Living in Las Vegas and Atrium of Belleville in St. Louis, and a majority stake in the Minneapolis-based senior living management company, Grace Management, Inc. CPF’s management is extremely excited about these purchases because they believe they give the company a strong foundation from which to purchase, develop, and operate a large portfolio of senior housing communities. The Echelon community in Las Vegas and the Atrium facility in St. Louis both have additional acreage on which CPF is considering developing new memory care and assisted living properties.
Another acquisition that recently took place in the Midwest was Summit Healthcare REIT’s $8 million purchase of two skilled nursing facilities in Colorado. The two properties are Juniper Village at Monte Vista and Juniper Village at Lamar. Both properties contain 60 beds, are at least 20,000 square feet, were built in 1972, and were renovated in 2008. Summit Healthcare will lease the properties to Dakavia Management Corp. under a 15-year triple-net-lease agreement, and Dakavia will operate them. Dakavia and Summit Healthcare already maintain a relationship because Dakavia operates three of the REIT’s other properties. Summit is excited to bring them along to operate its new Juniper properties.
Lastly, another owner/operator in the Midwest recently purchased Ide Management Group’s 19 property senior housing portfolio for $63 million. This acquisition includes approximately 1,160 skilled nursing beds in facilities located in Indiana and Iowa. Some of the properties also contain a few assisted living beds, but because of the care services the facilities provide and their overall design, these beds were classified as nursing beds when the portfolio’s value was determined. The portfolio’s occupancy rate is 80 percent, and includes a mix of private pay and Medicare residents. The buyer also picked up an option to assume or purchase 12 additional properties that Ide Management is currently leasing to a public REIT sometime before 2020. Ide Management’s ownership was anxious to sell these properties because they decided to transition out of the senior housing industry, and the buyer was attracted to the portfolio because of the properties’ Midwestern location and its profit potential.
While interest rates remain low and the senior housing market remains dynamic, providers and investors seeking capital for acquisitions, sale/leasebacks, debt refinancing, or other purposes should continue to look to the Chicago-based financing firm Cambridge Realty Capital for assistance in financing these and other senior housing transactions.