Location clearly commanded a premium for a just-sold memory care community in Santa Barbara, which sold for $18.6 million, or $465,000 per unit, despite still being in lease-up. Built in 2015 as the only asset of the local owner, this community has 44 beds in 40 units on a 0.65-acre lot in scenic Santa Barbara. It was just 82% occupied at the time of the sale, but was still valued approximately $240,000 per unit higher than the average for AL/MC communities in 2016 (included in the 22nd Edition of The Senior Care Acquisition Report, to be published this month).
The high rents can help explain the property’s appeal, ranging between $7,600 and $8,000 per month for private units, and about $6,500 per month per resident for the few double-occupancy rooms. A couple of rooms with respite care cost about $9,000 per month in rent as well. The transaction featured a cap rate of 7.9% based on projected EBITDAR of $1.475 million and annual revenues were approximately $3.53 million. A public REIT was the buyer, which will hire a California-based management company to operate. Jason Punzel of Senior Living Investment Brokerage represented the owner in the sale, netting a great price for his client.
