We have not seen many stabilized seniors housing deals close in the last several months, since most owners of these properties would rather collect the cash flow or rent instead of exiting in a higher-cap-rate environment. Other owners of these properties could see the latest interest rate increase by the Fed as a sign that we will be in this higher-rate environment for longer, and see the cost of holding onto the asset for another 18 months or two years as too expensive for their taste. One possible advantage of selling now is the scarcity of stabilized assets on the market, meaning one could still command a high price for their community. Arbor Terrace Fairfax in Chantilly, Virginia, was one of those stabilized communities.
Developed in 2017 by Capitol Seniors Housing (CSH) and operated by The Arbor Company, the 48-unit/54-bed standalone memory care community reached 93% occupancy within eight months of opening and remained full and stabilized for the two years leading up to the pandemic. Even in 2020 and 2021, it never lost profitability and fully restabilized by the first quarter of 2022.
Before the capital markets fundamentally shifted in the middle of 2022, CSH approached Blueprint Healthcare Real Estate Advisors to market the property. Given the notable in-place EBITDAR that even improved during the transaction process, Blueprint was able to broaden the buyer pool to yield-driven investors who might not have otherwise considered a stand-alone memory care community.
Hamister Group, a Buffalo, New York-based owner/operator with experience in both seniors housing and hotel assets, emerged from multiple competitive bids to purchase the community for an undisclosed price. Hamister has two other communities within 10 miles of Arbor Terrace Fairfax, adding to the property’s appeal. Kory Buzin, Ben Firestone, Michael Segal and Steve Thomes of Blueprint closed the deal.
