Founded in 2014 by Robert and R. Kyle Bourne, Bourne Financial Group (BFG) is set to open its first 10 assisted living communities across the country by the end of 2016, representing an investment of over $200 million. Not short on experience, BFG’s leadership, all formerly of CNL Financial Group, has over 90 years of combined of experience in seniors housing, health care, and real estate finance and investments.
In their first two funds, BFG has raised over $45 million in equity, which will go towards building eight communities in various locations across the country. Typically, in a secondary market, their development costs will start around $200,000 per unit, and go up to $240,000 in larger markets such as Seattle and Chicago. Indeed, the company is planning to open a number of communities in the Seattle and Chicago areas, as well as in Oregon and Georgia.
To finance the projects, BFG hires a general contractor who will fund the hard construction costs, architect, engineer and closing of the land, in addition to building the community itself. Then, BFG and its operating/developer partner for the project will fund the soft costs, development fees and working capital reserves, until certificate of occupancy when they take the general contractor out with permanent financing.
A couple of the operating partners BFG has turned to include Cascadia (based in the Northwest) and Harbor Retirement Associates (based in Florida), but they are seeking others. As for the targeted market, BFG is aiming to serve the middle market and up, citing the need for seniors housing options for those who can’t afford much of the more expensive, luxury communities being built today.
Where is BFG building next? Apart from the 10 projects expected to open next year, they have a number of communities in their pipeline in pre-development that should begin construction later this year. And the first two, of those 10 projects, set to open later this summer, both in Washington state, have already exceeded pre-leasing expectations.
