Private to not-for-profit transitions certainly constitute the minority of senior care transactions, but it was nevertheless the case for a 190-unit independent/assisted living community that sold in Deland, Florida. Mike Pardoll of Marcus & Millichap represented the previous private owner/operator (who also developed the property), and sold the community to a 501-C3 for $19 million, or $100,000 per unit, with a 10.1% cap rate.
The original seven-story 124-unit building was built in 1986, and a four-story (70-unit) addition was constructed in 1996, with a common area connecting the two buildings. Currently, four of the units are used for corporate purposes, lowering the total resident units to 190. Units range in size from 630 square feet to 1,030 square feet and each features modern kitchens, electric appliances and balconies. And residents, of which 16% are on a Medicaid waiver program, also receive two meals a day and weekly housekeeping.
The previous owner had spent over $1 million in the past three years to upgrade most of the community, but rents fell below market average. So, while occupancy is already high at 93%, there is the potential to increase revenues through rent increases. The not-for-profit buyer hired Greenbier to manage the community.
