Building on the North Shore

The Chicago suburbs of the North Shore, one of the wealthiest areas in the country, will soon be getting a new assisted living/memory care community in the town of Prospect Heights, Illinois. Greenbrier Senior Living, a Chicago-based developer, is teaming up with institutional equity partner, Och-Ziff Real Estate, and Chicago-based operating partner, Pathway Senior Living, to build the 94,333-square foot building, which will feature 69 AL units and 32 MC units. To help finance the project, Aron Will of CBRE National Senior Housing secured a $21.41 million, five-year floating rate construction loan, with 39 months of interest only, placed through a regional bank. If we assume the loan was valued at 70% loan-to-cost (which has been the norm for these types of projects), the development cost for this property would be around $30.6 million, or $302,800 per unit, which is high compared to the national average of $191,000 per unit for constructing like-facilities (according to our data since late 2013). But given the affluence of the surrounding area, that cost makes more sense.