Humair Sabir and Jacob Gehl of Blueprint Healthcare Real Estate Advisors worked on behalf of a private ownership group in its sale of a senior living community in Sacramento, California. Originally built in 1997, the community features a mix of 72 independent living, assisted living and memory care units in three integrated buildings. It also has the advantage of being in a desirable area of Sacramento.
The seller, Solstar Investments, bought the community from a local investor group in 2015 for $6.85 million, or $95,100 per unit, at a roughly 6.1% cap rate. At the time, occupancy had dropped to just 80% (not that bad these days), and the operating margin could have been improved from around 20%. The current operations are not known, but the seller apparently added value by changing the management company, renovating the physical plant and converting some of the assisted living units to memory care.
A California-based seniors housing owner/operator emerged as the buyer and retained the existing management company, Northstar Senior Living. Occupancy is already strong, so a rent increase may be in the works.
