In the June issue of The SeniorCare Investor, we wondered when private equity would get off the M&A sidelines in a major way, with so much dry powder available to them. On cue, Harrison Street Real Estate Capital announced the largest seniors housing and care deal in two years, spending approximately $1.2 billion on a portfolio of 24 assisted living/memory care communities in California and Nevada. The portfolio totals 2,195 units, resulting in a per-unit price of $546,700 per unit.
Oakmont Management Group operated the whole portfolio, Healthpeak Properties owned half of the properties and California-based real estate developer Gallaher Companies owned the other half. The Healthpeak Communities average four years old, and were 96% occupied from 2016 to 2019, until the pandemic caused a decline, we are sure. They are located in affluent markets, which certainly contributed to the high per-unit price. The Gallaher properties, which include the one property in Nevada (Las Vegas, specifically), are also recently built or under construction.
Harrison Street also announced the sale of 14 medical office buildings in eight states to Healthpeak for approximately $371 million. Totaling 833,000 square feet, they are located in Virginia, Illinois, Minnesota, New Jersey, Oregon, Texas and California. The properties are now held across Harrison Street’s Core Fund and U.S. Opportunity Funds.
Speaking of dry powder, Harrison Street reportedly raised $720 million in a new investment fund devoted to seniors housing, life science and data center real estate. They targeted $1.5 billion for the fund but could ultimately raise up to $2 billion according to its filing with the SEC. And earlier this year, Harrison Street shelled out $312 million to purchase 12 more communities from Healthpeak.
