Silver Wave Capital and Persimmon Ventures announced their second joint venture acquisition, buying a 102-unit assisted living/memory care community in Auburn Hills, Michigan. Earlier this year, the joint venture had acquired an AL/MC community in Naples, Florida, to mark their first purchase together, and they plan on more in the next year.
The Class-A Michigan asset was built in 2018 by First & Main and features 58 AL and 44 MC units. However, the Auburn Hills market was overdeveloped for seniors housing services, and we understand that the property never reached stabilization. It was previously owned by Hudson Advisors, an affiliate of Lone Star Funds that purchased the community as part of the five-property Great Lakes Portfolio in August 2021, according to LevinPro LTC. The portfolio sold for $115 million, or $223,700 per unit, although we do not know the allocation for the Auburn Hills property. Grace Senior Living took over operations before LCS was brought on to manage the community, along with nine others, in April 2023.
According to those familiar with the community, it was less than half-occupied at the time of the current deal, so we do not believe it was profitable and probably sold for under $100,000 per unit. Silver Wave Capital and Persimmon Ventures are bringing in Synergy Senior Management, a Michigan-focused operator with 15 properties in the state and extensive local expertise and resources, to turn around the well-built community. Synergy also invested significant capital into the transaction. Skin in the game always helps. Alex Florea, Ryan Kelly and Kyle Hallion of Blueprint handled the transaction.
