For those who invest in senior housing/healthcare properties, successful outcomes have a lot to do with timing. An ability to see potential future value where little currently exists is helpful as well.
Senior Managing Director Ben Firestone of Chicago-based Blueprint Healthcare Real Estate shares this example: Eight years ago, Cambridge Investment and Finance, the acquisition arm of Cambridge Realty Capital, purchased a portfolio of three assisted living and memory care properties in the Green Bay and Appleton, WI, markets, consisting of four buildings. At the time, two of the properties were frayed and less than 60 percent occupied. A third building was unoccupied and unlicensed.
The purchase price was $4.8 million.
Mr. Firestone was one of several guests at a recent dinner hosted by Cambridge to celebrate the successful sale of the Wisconsin portfolio for $18.4 million, or about $150,000 per unit. Attending the event were those who in some way had a hand in the successful expansion, refurbishing, rebranding, repositioning and eventual sale of the portfolio.
Effectively, the value of the Wisconsin properties quadrupled over the eight-year span. And the number of residents in the buildings almost doubled, from 60 to 115.
Summit Healthcare REIT of Lake Forrest, Calif., the buyer, was represented in the transaction by Managing Director Jacob Gehl of Blueprint’s Los Angeles office. The Chicago brokerage firm also has a regional office in Washington, D.C.
Mr. Firestone noted that Cambridge’s principle investment strategy includes direct property acquisitions, joint ventures and sale leasebacks.
“Cambridge has developed a unique process for acquiring properties, and has assembled a knowledgeable staff that understands the analytical side of the business as well as anyone. Chairman Jeffrey Davis has a great eye for spotting value-added opportunities that fit the company’s overall investment strategy,” he said.
Typically, the Cambridge staff works in collaboration with local senior care management companies to actively oversee operations. The aim is to balance goals and align the common interests of participants in these transactions.
In Northern Wisconsin, Cambridge entered into a strategic partnership with BAKA Enterprises Inc., a management company that also owns and manages other properties in the region. BAKA was instrumental in the turn-around project and was represented at the celebration dinner by principals Kathy Tegen and Barbara Bittner.
Also attending the dinner was United Trust Bank Executive Vice President for Lending Kenneth Shapiro, Marc Realty Principal Jerry Nudo, and Blueprint Senior Associate Michael Segal. In addition to Mr. and Mrs. Davis, Cambridge was represented at the dinner by Senior Vice President Brent Holman-Gomez, Managing Director Sampada D’silva, and Office Manager Debbie Glienke.