Alex Snyder and Hamid Panahi of Marcus & Millichap’s Tucson, Arizona office didn’t have to go far for their latest seniors housing deal, selling an 80-unit assisted living community in their hometown of Tucson. They represented both the merchant developer seller and regional owner/operator buyer (both also based in Tucson), the latter of which paid $5.6 million, or $70,000 per unit, for the property. The buyer utilized a combination of a seller carryback, bridge debt and conventional debt to finance the acquisition.
Opening in 2018 and still leasing up when the pandemic hit, the community was just 42.5% occupied at the time of the sale. However, new ownership made their presence felt by filling 10 units within the first 10 days of owning the asset, bringing occupancy to 55%. We imagine it was not profitable at the time of the sale either, but that may change soon at that rate. The community cares for high-acuity assisted living residents on a campus consisting of eight 10-unit homes. The developer has another similar property currently in the works in the area.