Active adult communities continue to draw attention from investors, particularly those not traditionally involved with the more service-oriented property types like assisted living and memory care. Brad Goodsell and Jason Punzel of Senior Living Investment Brokerage recently represented a privately-owned multifamily group in its sale of a 320-unit age-restricted community in Hemet, California. The buyer was another multifamily investor with a strong presence in California, including several active adult communities.
Built in 1984, the target was operating well at 93% occupancy and a 53% operating margin on approximately $3.04 million of revenues. While you don’t often see margins like those in traditional seniors housing, active adult communities typically have fewer expenses and lower labor costs. The buyer ended up paying $30 million, or $93,750 per unit, at a 5.4% cap rate.
