A couple of seniors housing communities in the Portland, Oregon MSA, sold to a joint venture between a blue-chip national private equity investor and a respected West Coast-based owner/operator. Opened in 2016 and 2019, the two communities total 284 independent living, assisted living and memory care communities in highly affluent, high-barrier-to-entry submarkets. A joint venture between a multigenerational, regionally focused developer and local investors decided to sell the assets.
These appear to be a couple of the high-end “Ackerly” assets, a 147-unit community in Portland and a 137-unit property in Sherwood. Earlier this month, Merrill Gardens announced that it was taking over the operations of three communities, including these two, in a joint venture with PGIM.
The communities had strong in-place cash flow but offered the opportunity for continued rate growth. That contributed to a highly competitive bidding process, with more than 10 offers from REITs, private equity firms, alternate investors and owner/operators. We believe there were several bids in the low-nine-figure range, which would put the per-unit price above $400,000 per unit. We also suspect that given the quality of the assets and of their performance (with upside), the cap rate may be in the low-6s on in-place financials.
Alex Florea, Kevin Lukehart and Dan Mahoney of Blueprint handled this transaction, which closed with the assumption of one agency loan, one bank refinancing and the Oregon licensure process.
