BMO’s Healthcare Real Estate Finance group acted as sole lender on an acquisition term loan of $41 million on behalf of Merrill Gardens and an institutional investor for The Ackerly at Sherwood. The Class-A community comprises 130 independent living, assisted living and memory care units in Sherwood, Oregon. It will be operated by Merrill Gardens, which currently manages more than 60 seniors housing communities across 20 states. The company previously announced it acquired The Ackerly at Sherwood, as well as two others, through a joint venture with PGIM.
Later, after Merrill Gardens’ announcement, Alex Florea, Kevin Lukehart and Dan Mahoney of Blueprint announced a closing which appears to have included The Ackerly at Sherwood and The Ackerly at Timberland (a 147-unit community in Portland, Oregon). A joint venture between a multigenerational, regionally focused developer and local investors divested the assets. The two communities had strong in-place cash flow and offered the opportunity for continued rate growth, contributing 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 for the two properties, which would put the per-unit price above $400,000 per unit. We also suspect that given the quality of the two assets and of their performance (with upside), the cap rate may be in the low-6s on in-place financials. The transaction closed with the assumption of one agency loan, one bank refinancing (the BMO loan) and the Oregon licensure process.
