Nearly five years after acquiring a newly-built senior living community in Lexington, Kentucky, Atlas Senior Living is selling the asset, marking the first disposition in the company’s nearly 10-year history. Blueprint Healthcare Real Estate Advisors’ Brooks Blackmon, Ben Firestone, Kyle Hallion and Lauren Nagle handled the transaction on behalf of Atlas and oversaw a competitive bidding process for one of the few Class-A, stabilized communities on the market right now.
Opened in 2017, The Legacy at Fritz Farm was developed by DMK Development at a cost of $26 million, or $155,000 per unit. It features 114 independent living, 38 assisted living and 15 memory care units. The community was nearly stabilized when Atlas executed on a purchase option for it in December 2018, financing the deal with a $35 million bridge loan secured by MidCap Financial.
Upon stabilization, Atlas then refinanced the property in March 2020 with a $36.3 million loan through Fannie Mae. MidCap had closed the transaction through its relationship with Bellwether Enterprise Real Estate Capital, and the loan came with a 12-year, fixed-rate term at 70% loan-to-value, putting the value of the community at more than $310,000 per unit.
More recently, the community was still fully stabilized, with occupancy above 98% and the operating margin in the mid-30s. Plus, the property boasted its attractive assumable Fannie Mae debt, which must have increased buyer interest.
Blueprint began marketing the property in the fall of 2022 and procured six competitive offers from a mix of private and public institutional and family office investors. KIRCO, a full-service real estate and investment company based in Troy, Michigan, emerged as the winning bidder and entered into a joint venture agreement with Atlas to continue managing the community. With operations humming along, that sounds like a good call.
