We have written recently about a drop in the average price (on a price per unit basis) for seniors housing transactions from its all-time high in 2014. However, in the midst of some very low transaction prices (one as low as $11,200 per unit/bed), there have been seven deals since the beginning of August with a price above $200,000 per unit.
One of them was the acquisition of a 145-unit assisted living community in Park Ridge, Illinois by Capitol Seniors Housing (CSH) for approximately $32 million, or $220,700 per unit. Originally built as a hotel and then converted to senior living, the new owners plan to convert 14 AL units into 20 memory care units in a separate wing. The buyer also plans to invest up to $5.5 million in renovations, including finishing the memory care conversion and other renovations started by the family seller a few years ago. Occupancy has stayed in the mid-90% area in the high barrier-to-entry location, which was one of the attractions to the buyer. CSH hired The Arbor Company to manage the community and oversee the renovations. HFF represented the seller in the transaction, which featured 7.2% cap rate, but expect cash flow to rise. The deal should close next week.