Brookdale Senior Living has agreed to sell its trophy community in New York City at a record price to Ventas, but will keep the management.
Anyone who heard former Brookdale Senior Living CEO Mark Schulte address the ASHA annual meeting in the aftermath of 9/11 will never forget it. He talked about their newest project in lower Manhattan. There was nary a dry eye in the room.
The community, called The Hallmark at Battery Park at the time, was still in fill-up, covered in inches of dust and debris, and had to be evacuated. The industry at other communities pulled together, took in as many Brookdale residents as possible, not knowing how long they would stay, not knowing how they would get paid. They just did it. Everyone helped out, and the empty building became a sort of headquarters for rescue workers.
The residents eventually came back, and it has been a success story ever since. Occupancy has been consistently in the mid-90s until the recent flu season and it operates at a healthy margin in the low 40s. The 14-story building with 217 units completely blends in with the neighborhood, which has changed for the better since the 2000 opening date.
Now, Brookdale has announced the sale of the building to Ventas for $194 million, or $894,000 per unit. We believe that is a record price for a single property, and we believe the per-unit price may be a record as well. With the “urbanization” of seniors housing, this will be a trophy investment for Ventas, even if it may need some sprucing up. If you want to talk about hard to build in markets, this is certainly at the top of the list.
Net of debt, Brookdale expects to reap proceeds of $140 million and will continue to manage it for Ventas. A win-win for the company and another step towards cleaning up its capital structure. Ryan Maconachy and Chad Lavender of HFF represented Brookdale in the sale.