One of the more active buyers of high-quality seniors housing assets announced a couple more acquisitions in the last month. Focus Healthcare Partners has so far acquired $200 million in assets this year to date, and has an approximately $100 million pipeline set to close before year end.
First, in August, Focus bought The Summit of Blue Ash in Blue Ash, Ohio (Cincinnati MSA), from an institutional investor. Opened in 2022, the community featured 200 units of independent living (107 units), assisted living (61 units) and memory care (32 units). It was previously operated by Anthology Senior Living but reported occupancy in the low-50s at the time of closing. Evolve Senior Living will take over operations in a new partnership with Focus. The firm paid $41.3 million, or $206,500 per unit. Given the age and quality of the property, we estimate that it was developed for a larger amount, perhaps as high as $350,000 per unit, so Focus is most likely getting this property at a nice discount to replacement cost.
Second, this month Focus acquired a larger 313-unit seniors housing community in Lake Worth, Florida. Sitting on 22.5 acres, the community was built in 2018 with a three-story IL/AL building consisting of 259 units and an adjacent one-story memory care building featuring 54 units. Formerly known as Mariposa, the community was more than 95% occupied, and has been at 90% and above since September 2020. That is fantastic, and credit to Discovery Senior Living, which was the previous operator. Arbor Senior Living will hopefully hit the ground running as the new operator, renaming it The Arbor at Lake Worth.
Multiple local media outlets have cited the purchase price to be $63.8 million, or $204,000 per unit, but we suspect that only represents the real estate allocation. So the purchase price was likely above that. We reported in 2019 that Big Rock Partners developed the community at a cost of $106 million, so we are also guessing the purchase price falls below that amount, given the current market for even well-run, stabilized buildings. We also found the property to be in Ventas’s most recently, publicly available, downloadable property list and suspect the REIT to be the seller.
