As investors and developers look ahead to the potential supply-and-demand imbalance in seniors housing in the coming years, we must consider the effect of conversion projects on future supply of assisted living units. With higher expenses and higher capital costs, not every assisted living community (particularly those that are small and/or older) will operate profitably as an assisted living business in the future, depending on the local market, of course. So sellers will increasingly look to alternative use buyers to get either an acceptable price or just any buyer.
We have seen more and more behavioral health buyers look to struggling seniors housing properties for just such opportunities. Blueprint’s Behavioral Health Team recently advised a seniors housing owner in the sale of a 45-unit assisted living community in an Indiana suburb of Chicago, specifically targeting residential treatment providers looking to expand their footprints in northwest Indiana.
At the time of LOI execution, Blueprint advised the seller through a public hearing zoning process that was ultimately approved by the jurisdiction’s city council. Ultimately, an Indiana-based physician-owned psychiatric and behavioral health provider purchased the community in October 2024 for approximately $5.22 million, or $116,000 per unit. The incoming owner plans to expand their behavioral health services at this new location to specifically treat substance use disorders under Indiana’s Medicaid reimbursement program. Blueprint’s Andrew Sfreddo, Shane Harmon and Gunnar Raney handled the transaction.
