Ryan Saul and Patrick Burke of Senior Living Investment Brokerage handled the sale of a 50-unit assisted living community in Racine, Wisconsin, five years after the community last sold. The buyer back then (and the current seller) was Meridian Senior Living and its joint venture partner Blue Vista Capital. They paid $6.5 million, or $130,000 per unit, for the community, although we do not know the 2020 sale price.
Originally built in the 1960s but gutted, renovated and converted to a Community-Based Residential Facility (assisted living community) in 2008, the community was around 94% occupied at the time of the November 2015 sale. The operating margin also stood at 25% at that time, resulting in a 12.8% cap rate for the deal.
Operations have dropped off since then, and the community has since transitioned to a Medicaid waiver community. Occupancy dipped to 75%, and the community was not making money on nearly $2.5 million of revenues. Monthly rents averaged around $3,600. Meridian and Blue Vista wanted to focus on newer, private pay communities and so initiated the sale.
Another regional owner/operator with other communities in the area, including those caring for Medicaid waiver residents, stepped in to purchase the property. They plan to invest in capital improvements to the physical plant and improve occupancy by emphasizing their “affordable” assisted living offering.
