Seniors housing deals valued above $500,000 per unit are rare. In fact, in our M&A database dating back to 1993, only nine have been announced in the U.S. (all since 2015). And up until this month, we only had one domestic deal above $600,000 per unit, which was Health Care REIT’s acquisition of three senior living communities in the Boston area for $150 million, or $652,174 unit. Now, a single 239-unit independent living building in New York City’s Upper West Side is selling for approximately $150 million, and surpassing $625,000 per unit. The Esplanade had been owned by the Scharf family, an owner/operator of senior living communities in the New York City MSA, since they bought it from a Receiver in 1993. Over the years, the family invested millions into renovating the prewar former-apartment hotel building into a luxury independent living community.
However, Alexander Scharf and the ownership entity, Esplanade Venture Partnership, were charged in September 2016 over alleged violations of city codes that require all parts of a building to be maintained in a safe condition (a two-year old girl died in 2015 as a result of falling debris from the building). Represented by Meridian Capital Group’s Lipa Lieberman, Abie Kassin, Adam Sprung and David Schechtman, the Scharfs decided to sell the community to a joint venture between Northwind Group, Harrison Street Real Estate Capital and The Engel Burman Group. KeyBank provided a $110 million acquisition loan to fund the deal. Apart from changing the community’s name, the new owners also plan to improve food service and create new amenities, including a new cinema room, renovated art studio, game room, performing arts center, computer center and beauty salon.
