Lisa Widmier of CBRE Senior Housing has sold a portfolio of five assisted living/memory care communities in the Great Lakes region. Appropriately called the “Great Lakes Portfolio,” these communities consist of 514 units in Michigan (with three locations) and Ohio (two locations). Occupancy fell below 50%, and not surprisingly, the portfolio was not making any money at the time of the sale.
Lone Star Funds and alternative investment manager Hudson Advisors acquired the portfolio from an unnamed seller. The purchase price was not revealed, we have heard it may have exceeded $115 million, or more than $225,000 per unit. Considering how far occupancy needs to come to improve both margin and cash flow at these communities, that seems like a nice exit for the seller and while also giving the buyer plenty of room add value. These are also new communities, so we imagine not too many capital improvements will be necessary. Grace Management will replace Agewell Senior Living as the operator. Apparently, there were three operators in the last three years for the portfolio, so some stability could be good too.
