A sector we have not traditionally covered but has been receiving more and more attention lately is the 55-plus senior apartment market. The property type does not feature the services like a common dining room (with a meal plan) or laundry that distinguishes independent living from strictly senior apartments, and so, it fell out of our “senior care” scope. However, with so much attention diverted to assisted living and memory care in recent years by many in the industry, some (both veterans and newcomers alike) are betting that the senior apartments sector is the perfect low-profile investment that still takes advantage of the Baby Boomer wave inching towards retirement age and beyond.
Despite the moniker “55-plus,” we have heard that the average move-in age for senior apartments is closer to 70 to 72 years, and possibly older. Assuming that, senior apartments then supposedly have a good 10-15 years on average of rent payments by these residents before a number of them move into independent living, assisted living or memory care communities. That would, of course, be a perfect world. We hear that some developers are targeting a much shorter length of star and view these as a bridge to the more common, more expensive, full-service IL communities.
On the M&A front, Danny Shin and Brock Zylstra of Marcus & Millichap’s Salt Lake City office, who typically deal with the multifamily and student housing market, recently closed the sale of a 159-unit 55-plus senior community in nearby Sandy, Utah. Built in 2013, the community is located nearby shopping centers and other recreational areas about 15 miles from downtown Salt Lake City. A local developer sold it to an out-of-state investor for $23.75 million, or $149,370 per unit.