A high-end CCRC in Naples, Florida in financial distress sold to Life Care Services in a deal handled by Grandbridge Real Estate Capital’s Senior Housing Investment Sales team led by Dave Kliewer and Jay Jordan. Opened in 2015 on 39 acres in the Lely Resort master-planned community of Naples, the community offers 47 independent living cottages, 128 IL units, 42 assisted living units, 37 memory care units and 44 skilled nursing units, with plenty of amenities. Entrance fees average around $950,000, which would certainly put the community on the high end of the Naples area.
However, the community was in default on around $136.32 million of Series 2013 and 2015 bonds (as of June 1, 2022) plus nearly $10 million of indebtedness to Mission Investment Fund of the Evangelical Lutheran Church of America. It also dealt with low occupancy: about 75% for the IL units and 69% for the AL/MC/SNF portion at the time of closing. Bondholders had not received payments on the bonds since May 2019, and efforts to stabilize the community failed, leading to the sale. There was an unsuccessful sale of the community in 2021 when the buyer, LifeSpace Communities, Inc., backed out of the deal, and another marketing effort resulted in LCS being the ultimate purchaser. Changes to the Florida insurance market in the fall of 2022 disrupted the transaction and led to revised terms and an adjusted final purchase price of $81 million (down from a cash price of $90 million, including a $3 million earnest money deposit), or $272,000 per unit. As of April 30, 2022, the entrance fee refund liabilities totaled approximately $85.1 million.
On December 28, 2022, the court-directed sale process was completed and delivered the property free and clear of bond debt. LCS will look to increase occupancy and realize the campus’s strong cash flow potential through the fill-up of some IL units without associated entrance fee refunds on them.
