Kandu Capital, LLC, and its operating company, Bloom Senior Living, collectively known as Bloom, sold its final seniors housing community in South Carolina. The company is seeking realignment as it exits the state after a decade-long presence in the region. The 129-unit independent living and memory care community, which is in Bluffton, sold for $13.5 million on an initial investment of approximately $3 million. Occupancy was around 63% at the time of acquisition, but performance improved between LOI and closing, with monthly revenues increasing from between $250,000 and $260,000 to over $300,000 (or over $3.6 million annualized). NOI also trended up, from roughly breakeven to around $45,000 per month ($540,000 annualized) in May. And it’s getting better.
Silver Wave Capital and Persimmon Ventures acquired the community and will re-brand it as May River Landing. They plan to convert half of the memory care capacity to assisted living and have Senior Living Asset Management take over operations, marking the second collaboration between Silver Wave/Persimmon and the operator. Berkadia represented both Bloom and the undisclosed buyer in the transaction. Honigman LLP served as legal counsel to Bloom.
Prior to this transaction, Kandu Capital/Bloom Senior Living divested two assisted living and memory care communities in the Bluffton and Hilton Head markets. Additionally, in recent years Kandu has divested skilled nursing, behavioral health and seniors housing assets at peak valuations of up to $225,000 per bed, while strategically redeploying capital into new seniors housing investments at less than $30,000 per unit.
Since 2021, these transactions have generated over $120 million in proceeds on total initial investments of approximately $27 million, with minimal leverage. Bloom’s core portfolio is currently just below 100% occupied with record rent and NOI, as well as a strong balance sheet. And the company has new opportunities in the pipeline.
Bloom/Kandu also recently refinanced an Indianapolis, Indiana, property that it acquired in October 2023, and already added value to it. Formerly owned and operated by Enlivant, Bloom at Kessler was in a distressed state when Bloom took over operations, with occupancy at 39% and an annual loss of around $1 million. It was purchased for $2.135 million, or just $35,000 per unit.
Since the purchase, Kandu and Bloom have spent just over $200,000 in capex and $600,000 in working capital, bringing occupancy to 84% and raising rates to $5,100 per unit. Revenues and EBITDA keep improving, as well, with stabilized EBITDA estimated between $1.0 million and $1.2 million. Using a cap rate of 8.0%, that would put the value between $12.5 million and $15 million.
Bloom/Kandu has now refinanced the property with $2.5 million of non-recourse debt from its regional lending partner, Commerce One. The plan is to take the loan out with agency debt, after additional stabilization. Part of that turnaround includes a rebrand, a new management team and adding the Medicaid Waiver program.
