An independent owner based in southern California enlisted Senior Living Investment Brokerage in the divestment of a seniors housing community in Scottsdale, Arizona.
The Springs of Scottsdale is a 143-unit independent and assisted living community, with 56 licensed AL beds and the remainder serving IL residents. Built in 1986, the community has undergone recent renovations in excess of $1.0 million. Occupancy was decent at 81%, and so was the margin at 20% on $4.86 million of revenues. But the seller had used multiple management companies over the past few years, so some stability there could help things going forward. Stability was ensured when the seller chose to sell the community to its current, Utah-based operator that has a national seniors housing presence. The purchase price was $16 million, or $112,000 per unit. Based on more recent trailing financials, the cap rate fell between 8.0% and 8.5%, but there is more room for improvement on a cash flow basis.
The purchase was made up of a mix of buyer equity and the assumption of an existing loan. Matthew Alley, Jason Punzel, Vince Viverito and Brad Goodsell of SLIB handled the transaction.
