Rob Reis of Marcus & Millichap recently sold a 45-unit assisted living community in Modesto, California, representing the single-asset owner/operator who was looking to exit the business. The seller developed the property in the 1980s, and has operated it ever since. Occupancy was 84%, and it was bringing in nearly $385,000 in NOI on approximately $1.5 million of revenues, for a 25% margin. Not bad for an older building, but it could still be improved.
The buyer was Senior Living West, a growing investor/asset manager in seniors housing, which purchased the community utilizing a regional management organization, Cimino Care. They clearly didn’t want to waste any time starting, as the property was in contract in October and closed before December 1st. The final purchase price came to $4.5 million, at an 8.5% cap rate, right around normal for the assisted living market.