Newly launched Continuum Advisors, founded by David Kliewer and Jay Jordan, sprinted to the end of the year with several closings in the last week of December. First, Continuum arranged the sale of the largest senior living campus in Illinois. Friendship Village of Schaumburg was built in phases from the late-1970s to 2007 and features 512 independent living apartments, 28 IL garden homes, 85 assisted living units, 24 memory care units and 169 skilled nursing beds, or 818 units and beds, total. It sits on over 60 acres in the affluent Chicago suburb of Schaumburg, about 30 miles northwest of downtown.
In 2017, Friendship Village refinanced its debt and funded campus renovations through a bond issuance. However, beginning in January 2021, the not-for-profit borrower defaulted on its bond payments. Issues stemming from the pandemic were blamed.
So, Continuum Advisors initiated a marketing process which highlighted the ability for a buyer to restore the financial stability of Friendship Village and potentially reposition the property. With Polsinelli also acting as counsel for the seller, Kliewer and Jordan led a sale process through the bankruptcy court, which resulted in three parties submitting binding contracts for the stalking horse position. After the selection of the stalking horse and an overbid marketing process, a multi-round auction was completed in late October 2023, with Encore Healthcare Services emerging as the winning bidder at auction. From the time of launching the offering materials to closing, the transaction was completed in approximately 6.5 months.
Encore paid $35.6 million, or $43,500 per unit/bed, in cash and is planning to make significant capital investments in addition to transitioning Friendship Village from a majority-entrance fee CCRC to a rental community. Existing residents with entrance fee contracts will be refunded part or all of their entrance fees in accordance with a length-of-stay schedule, and Encore has committed to provide $750,000 per year in benevolence care, among other benefits to legacy residents.
Separately, the team sold The Weils, a 120-unit senior care campus in Chagrin Falls, Ohio, an eastern suburb of Cleveland. They represented the Cleveland-based not-for-profit seller, Menorah Park, which took over ownership of The Weils following its 2020 affiliation with another Cleveland-based not-for-profit (and the campus’s original developer and operator), Montefiore. Continuum also represented Menorah Parks’ financial advisors, SOLIC Capital Advisors, in the sale.
Built in phases between 2002 and 2015, the campus consists of 75 assisted living units, 18 memory care units and 29 skilled nursing beds (in 27 units). The 45-acre property also comes with excess land for future development. Occupancy was in the mid-80s, and there was positive momentum with strong in-place rates at the time of marketing. Another Cleveland-area-based not-for-profit organization, Eliza Jennings, took over the campus.
The third Continuum closing will be covered later this week.
