A local assisted living ownership group in southeastern Wisconsin is looking to expand in a big way with its acquisition of a senior living community in the town of Mukwonago (Milwaukee MSA). To this point, the group had owned just eight eight-bed assisted living communities in the area. But, in one transaction, they have now more than doubled their portfolio, by units, in purchasing the 73-unit Mukwonago community.
Originally built in 1996 with a 20-unit assisted living community, the property added a 48-unit independent living building in 1999 and five 55+ senior rental homes in the 2000s. Two local partners had owned and operated the community since its inception, but were looking to divest their only asset and retire from the industry.
They left the community in good shape, with occupancy near full across the unit types. However, there remains plenty of upside in rents (which were below market for the AL and for some of the IL units), cash flow (which was around $400,000 at the time of the sale on nearly $1.3 million of revenues), and a development opportunity on the property (which has been pre-approved for 64 seniors housing units). Given the occupancy and the affluent area, that could be a home run.
In the end, the community, including the 1.74 acres of vacant land for development, sold for $4.9 million, or $67,100 per unit. Ray Giannini of Marcus & Millichap handled the transaction.