Harrison Street has acquired five seniors housing communities in a joint venture with Brightview Senior Living, from Brightview itself, as part of the pair’s ongoing partnership. Brightview will continue to manage the communities. The purchase price was not disclosed, but we believe they commanded strong per-unit values.
These recently constructed communities (in the last 10 years, at least) comprise 743 independent living, assisted living and memory care units throughout Massachusetts, Maryland, New Jersey, Pennsylvania and Virginia, in affluent and smaller markets with high barriers to entry. They have an average occupancy rate of 94%, and Brightview has a history of building, filling and then selling high-quality, Class-A communities. We imagine this was a cap rate deal, and given the quality and locations of the assets, similar deals have traded for around a 6.5% cap rate in the last several months.
Following this deal, the joint venture will have a combined portfolio of 26 assets with over 3,600 units, including a development that is currently under construction in Fairfax, Virginia. Brightview is also set to raise more than $200 million in funding for its next stage of developments.
In addition, the buyer arranged a seven-year, fixed-rate loan from a life insurance company, with a full term of interest only. Financing large deals has gotten easier compared with last year, but it also helps to finance performing, Class-A communities.
Newmark was the sole advisor on the transaction.
