Nine properties in three states sell for over $500,000 per unit, more than doubling in value in 10 years.
Patient capital in seniors housing can certainly reap its rewards. Take the case of Boston-based Intercontinental Real Estate, which purchased nine senior living communities in New England from BayNorth Capital in 2005 for approximately $225,000 per unit. The one constant in the portfolio was Benchmark Senior Living, which was a minority co-investor with BayNorth and managed the portfolio. With the sale in 2005, they remained as the manager, and also stayed in as a co-investor. The portfolio has now been sold again, but for about $521,000 per unit. Individual properties have sold at a higher price, but not many. While we are sure the financial metrics work for the buyer, apparently Health Care REIT, the fact that a portfolio has more than doubled in value from what at the time was considered to be a high price, says a lot about where the market has gone since 2005. Does this transaction represent sort of a market peak? Perhaps, but why don’t you join me on February 26 for our webinar where we will be discussing what defines a market bubble, whether we are close to one or whether the ride will continue past 2016.