We’ve all heard the warnings of overdevelopment in Texas, particularly of new assisted living and memory care communities. One of those MSAs that has seen plenty of groundbreakings is Dallas, with nearly 5,000 units built from Q4 2012 to Q4 2016, according to NIC MAP. While the market is in better shape than Austin, Houston and San Antonio in terms of construction versus inventory, occupancy has been consistently low in Dallas, hovering around 85% for the past few years. We wonder how well those new communities have been filling up. That was probably on the mind of an out-of-state buyer when it purchased a recently built assisted living/memory care community in Allen, Texas, an affluent suburb of Dallas.
Opened in March 2016, the 87-unit/95-bed community was still in lease-up at the time of the sale, under management of local operator Civitas Senior Living. The buyer, a national owner/operator of seniors housing properties paid all cash (although the price is undisclosed) and will bring in a new operator. Doug O’Toole of Marcus & Millichap represented the buyer, and Nathan Tune of Verus Advisors – Coldwell Banker Commercial represented the seller, a local owner/developer, in the transaction. Although the price wasn’t revealed, we do know the average cost to building assisted living/memory care communities in the Dallas-Fort Worth area is around $235,000 per unit, according to our in-house development database that tracks new construction projects back to late-2013. So, we have to imagine the purchase price tops that.
