Two newly built assisted living/memory care communities in the Detroit, Michigan area found new owners thanks to the team at Evans Senior Investments. Built between 2019 and 2020, the communities were smaller in size, with less than 65 units at each location. That meant that ownership (a growing regional operator) could quickly fill the communities, even during the pandemic, with occupancy standing at 88% at the time of marketing.
The communities also boasted a 34% operating margin at that time, and in January 2022 the seller implemented inflation-based rental rate increases for existing residents that averaged an increase of 12%. An added $400,000 of revenue as a result surely made the communities more attractive to potential new owners. The eventual buyer, which is entering the state, paid $38.25 million, or $314,000 per unit, at a 6.5% cap rate based on trailing NOI at the time of market.
