REITs and private equity firms were responsible for the largest transactions recorded in November, and most recently, an institutional private equity fund first spent approximately $250 million in cash on a portfolio of six seniors housing communities owned by Capitol Seniors Housing. Four of the communities, including three operated by Arbor Company and one by Chelsea Senior Living, were developed in the last few years in Maryland (2) and New Jersey (2). There was also a 92-unit assisted living/memory care community in Tampa, Florida acquired in 2015 (upon certificate of occupancy) for $20 million, or $217,400 per unit, and an 80-unit independent living community in Herndon, Virginia acquired in 2013 for $16.3 million, or $203,750 per unit. The latter two communities are also operated by Arbor. In total, the portfolio includes 515 units, selling for $482,000 per unit. Newmark handled the sale.
The Newmark team followed that up with four other sales in the last month. In one of them, a 1031 exchange buyer purchased a 63-unit assisted living/memory care community in Easton, Maryland for $27.05 million, or $429,000 per unit, for an in-place cap rate of roughly 7%. Built in 2001 and renovated in 2017, the community was 90% occupied. Valstone Partners was the seller.
Next, Newmark handled three active adult sales. Clarion Partners, though its Core Fund, paid $62.3 million in cash for a 142-unit community in Franklin, Tennessee (Nashville MSA). It was just about fully occupied (a familiar theme for active adult properties these days) and sold at a year-one cap rate of 3.75%. It was built in 2019, so that newer vintage certainly helped contribute to the high per-unit value of $440,000 per unit. The seller was a partnership between The Carlyle Group and Avenida Partners.
Carlyle was the buyer in the remaining two Newmark closings, first acquiring a 150-unit community in Houston, Texas from Pinpoint Commercial for $32.1 million, or $214,500 per unit. Also built in 2019, it was around 92% occupied and sold for a year-one cap rate of 4%. Pinpoint sold another Houston community to Carlyle for $31 million, or $228,000 per unit. Built in 2019 with 136 units, the community was also 92% occupied with a year-one cap rate of 4%.
Newmark followed up on its investment sales activity by arranging a bank refinance for a 189-unit senior living community in Hendersonville, Tennessee. Owned by Harrison Street and operated by Life Care Services, the community features 115 independent living, 37 assisted living and 37 memory care units. Ryan Companies was also involved in the property’s development, after acquiring the site in 2017 from First Bank and Matthews Investments. Newmark arranged a $34.18 million loan from Synovus Bank representing a 70% loan-to-value.
