In addition to its active investment in development, Berkshire Residential Investments, through its Berkshire Seniors Housing Fund I, has made its first purchase of an existing seniors housing community. The Senior Housing Investments Group, which Matthew Whitlock joined as Chief Investment Officer in May 2019, currently has six projects currently under construction and two others that have recently opened. But this is its first acquisition of an open community, and likely not the last.
Set on 11.4 acres in Clearwater, Florida, the community has 57 assisted living and 25 memory care units. A not-for-profit organization built it in 2012 and included an impressive array of amenities. To put it in perspective, of the community’s 93,700 total square feet, around 54,000 square feet are devoted to amenity and common space.
Not only that, but the operator since 2015, Adam Kaplan’s Solera Senior Living, has maintained occupancy in the 90% range throughout the pandemic. And census rose to 97% at closing. The operating margin has also ranged from 32% to 35%. Apparently, Mr. Kaplan implemented preventative measures like masking and testing much earlier than other senior living communities, and he also had a very intimate knowledge of the community’s day-to-day operations. That attention goes a long way, and Solera will stay on as operator, which we are sure Berkshire is happy about.
Joel Mendes, Mike Garbers and Cody Tremper of JLL Capital Markets represented the undisclosed seller in the transaction. Berkshire paid $23.15 million, or $282,300 per unit, which seems like an excellent deal for such a new, amenity-rich and well-operating property. Aron Will, Matt Kuronen and Austin Sacco of CBRE arranged a $15.15 million loan through Fannie Mae to finance the acquisition. Structured at 65% loan-to-value, the 10-year loan (with five years of interest only) came with a floating rate, which was all-in below 3%.
