After taking a hit, operationally, from Hurricane Irma, five Florida assisted living communities sold to a Texas-based not-for-profit making its first acquisition in the Sunshine State. Built from 1999 to 2013, the portfolio is mostly located in central Florida, with one property on the Panhandle in the town of Niceville, and features 340 total units, ranging in size from 46 to 114 units.
Expenses rose across the portfolio due to evacuations and staffing increases from Hurricane Irma, causing the operating margin to fall to 26% on just under $17.9 million of revenues. Occupancy was also just around 79%. However, ownership had reversed the trend, and the community was budgeted to operate at a 30% margin on nearly $19 million of revenues in 2018.
The Florida-based partnership owner decided to terminate the partnership, but their affiliated entity, Superior Residences, will continue to operate the portfolio on behalf of the buyer, which purchased the communities for $71 million, or $208,800 per unit, with a 6.7% cap rate based on trailing financials. Piper Jaffray & Co. issued tax-exempt bonds for the not-for-profit buyer to fund the deal. Bradley Clousing, Jeff Binder and Toby Siefert of Senior Living Investment Brokerage handled the sale.
