It took about five years, but an assisted living community in Tucson, Arizona finally found a new owner. Opened in 2015 with 70 private units, the community consists of seven separate 10-unit buildings. The developer decided to sell the property almost immediately after opening it and worked with Mark Biery of Berkshire Hathaway to find a buyer.
The property went under escrow several times but to mostly unsophisticated, out-of-state investors. It was difficult for a lender to get aboard, especially when the potential buyers don’t have any experience operating in the assisted living sector. Also complicating things was the fact that four separate mom & pop operators leased the buildings on the campus. The property was cash flowing and providing rent to the developer/owner, and occupancy was around market levels, but the goal to sell was always present.
Finally, Alex Snyder and Hamid Panahi of Marcus & Millichap brought an experienced buyer to the table. Innovative Senior Living operates a few seniors housing communities in southern Arizona, and is based in Tucson, so it emerged as the perfect fit. They ended up paying $4.85 million, or nearly $70,000 per unit, at a cap rate between 6% and 7%. Messrs. Snyder and Panahi had previously worked with the developer/seller, which has now exited about 150 units in the past three months, leaving it with capital to deploy to new projects.
