Iron Will

We can’t go long without seeing another Aron Will (of CBRE) transaction, or two. The first of his latest deal duo took place in California when a joint venture between Auctus Capital Partners and Och-Ziff Capital Management acquired a 54-unit assisted living/memory care community in San Francisco. Located on an irreplaceable site, the building was originally built it 1923 as a hospital but was purchased by a Mom & Pop in the 1990s who then converted it to senior care. It has some underutilized “dead space” that the JV will convert to add significantly more assisted living and memory care units. Plus, Auctus and Och-Ziff will make some cosmetic improvements to help drive operations, which lagged slightly under the Mom & Pop. Integral Senior Living was recently bought on to operate and will remain in place. Occupancy currently rests in the mid-80s on a per-bed basis, and in the 90s on a unit basis. To finance the acquisition, Mr. Will arranged a $17.12 million Fannie Mae loan, with a 10-year fixed rate term and 60 months of interest only. This is the fifth acquisition for Auctus since its 2014 founding, which includes two communities in Washington and three in California.

Then, Mr. Will arranged a $19.65 million non-recourse floating rate loan on behalf of a joint venture between three Denver-based companies, including MorningStar Senior Living, to acquire a newly built assisted living/memory care community in Glendale, Arizona. The loan came with a three-year term, 36 months of interest only and a sub-3% all-in rate, and was provided by a national bank. MorningStar actually developed the $18 million-property together with Real Capital Solutions (opening it in September 2015), and will contribute a substantial portion of equity into the JV buyer to remain as the operating partner. Its other JV partners include Oakwood Real Estate Partners, a commercial real estate private equity firm with over $1 billion in real estate investments since 2005, and Confluent, also a private equity firm focused on real estate investment and development since 2008.

 

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