Bradley Clousing and Matthew Alley of Senior Living Investment Brokerage continued the firm’s impressive run into the seniors housing M&A market (read about their skilled nursing deals here), selling a 170-unit independent living community in Dallas, Texas. The property actually traded at the end of 2020, with CareTrust REIT (NASDAQ: CTRE) selling to Valstone Partners. Built in 1987 and thoroughly renovated in 2013 with additional capital improvements made in 2016, CareTrust had previously converted the remaining assisted living units to independent living.
Occupancy had declined as a result, but it was steadily improving to the low-80s with a focus on the middle market. Cash flow also reached about $200,000 on nearly $2.5 million of revenues. Valstone had intended to possibly reintroduce assisted living and raise the below-market rents but in the end decided to just sell the asset to Elevation Financial Group, which intends to further lower the property’s acuity, converting it to active adult. SLIB connected buyer and seller, and the final purchase price ended up being $8.45 million, or $49,700 per unit. Must have been a nice return for Valstone after about five months of ownership. Mr. Clousing also sold an 87-unit assisted living community in Lakeland, Florida to Mainstay Senior Living, but no other details were disclosed.
Next, Jason Punzel, Brad Goodsell and Vince Viverito represented an individual owner/operator in the sale of their 42-unit assisted living/memory care community in Hillsboro, Oregon (Portland MSA). The seller also retired as a result of the sale, which came to $8 million, or $190,500 per unit, at an 8.05% cap rate. That’s a nice way to go out.
Built in 2002 with additions made in 2006 and 2012, the property consists of 62 licensed beds, which will be converted to 100% memory care by the new private equity owner. A third-party manager will come in to operate but is walking into a strong operation with 87% occupancy and a 25% margin on $2.6 million of revenues. The buyer will also invest in a community-wide refresh.
In the first publicly announced senior care deal in the state of Alaska since 2008, according to our deal database, Messrs. Punzel, Viverito and Goodsell sold a brand-new community in Anchorage for $32.5 million, or $280,200 per unit. The community opened in December 2019 and was already 67% occupied at the time of the sale. It features 116 units and beds of assisted living and memory care, with rents ranging from $6,000 for an AL studio to $6,900 for an AL one-bedroom unit to as high as $9,000 for memory care services.
A local developer sold the property to a national REIT, which retained the current operator. The buyer then intends to finish the lease-up and keep the property in its portfolio for the long-term. There is also the opportunity for a JV expansion for an IL community on the adjacent land.
