New Fund hits development market

Blue Moon Capital Partners, a seniors housing private equity investor founded by industry vets Kathryn Sweeney and Susan Barlow, just announced the first project for its $175 million fund, Blue Moon Senior Housing I LP (BMSH). In December 2014, Blue Moon secured a $175 million capital investment from Scout Fund II through Hawkeye Partners, LP. Kicking off development will be a 180-unit seniors housing project in Northville, Michigan being developed with The Damone Group, which has developed over 120 projects in the last 40 years. With 96 IL units, 44 AL units and 40 MC units, the community will be built by the developer’s construction arm, Damone Construction, and operated by its management company, Cedarbrook Senior Living. The project should cost $52.5 million, or $291,700 per unit, 61% of which will be financed with debt from First Merit Bank and Talmer Bank, and the remaining 39% coming from BMSH.

Looking to the future, Blue Moon is planning about 12 projects with the $175 million Fund, which will all have shovels in the ground by the end of 2016. The next one is in Lakewood, Colorado: a 156-unit rental CCRC developed with Ascent Living Communities and GH Phipps Construction Companies. The community will feature 72 AL units, 24 MC units and 60 IL units and is being financed by a 65% LTC, $36.3 million, five-year floating rate construction loan with limited recourse and 36 months of interest-only. Aron Will of CBRE arranged the loan.

For the rest of the projects, the company will look to finance with between 35% and 40% equity from the fund, and then three- to four-year debt (with possible extensions to allow for fill-up) and one-month LIBOR spreads. As for developing partners, Blue Moon may look again to Damone, in addition to other experienced developers and operators, which will take between a 5% and 20% ownership interest in the project. All of the projects will be located in high barrier-to-entry markets within the NIC MAP top 50 markets.

 

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