Build in Broken Arrow
At the beginning of this year, we wrote about the rise of seniors housing construction in the Tulsa, Oklahoma area, with four projects scheduled to open in the second half of 2015, representing a total investment of over $35 million. Indeed, according to NIC MAP data, the construction vs. inventory ratio for assisted living in the MSA is over 30%, one of the highest for any MSA in the country. Well, we have to add one more to the books, as Prevarian Senior Living just broke ground on a 105-unit assisted living/memory care community in Broken Arrow, Oklahoma. Prevarian, a private equity investor, is partnering with an affiliate of St. John Medical Center Hospital, on whose campus the... Read More »Healthcare REIT Stocks Surge
After the Federal Reserve announced it would not raise interest rates, at least not this month, healthcare REIT stocks surged on the news much more than the market as a whole. While the major stock indices were up between 0.5% and 1.0% in the first hour after the news, the healthcare REIT stocks increased from about 1.5% all the way to 6.0% for newly spun-off Care Capital Properties. We know Ray Lewis must have breathed a sigh of relief. This was a bit of a reprieve for the badly battered healthcare REITs, which suffered exaggerated declines during the past month or two. But rates will be increased, at some point. Read More »Hunt and Healthcare
Entering the senior living/healthcare lending market, Hunt Mortgage Group closed its first transaction in that sector with an $8.85 million refinance loan for a 50-bed memory care community in Rockwall, Texas through its new balance sheet lending platform launched earlier this year. Jim Neil, Director of Healthcare Lending at Hunt, was the originator while Jenifer Williams led the underwriting team on the transaction. On the receiving end of this loan was The LaSalle Group, the developer of the prolific Autumn Leaves® brand of assisted living/memory care with 27 existing communities and 15 under construction. Its community in Rockwall opened in 2011 and stabilized by mid-2013. But when a... Read More »Seniors Housing: Build or Buy?
In this strong seniors housing acquisition market, when does it make sense to build a brand new community or buy an “A” quality community? Based on seniors housing construction projects since 2013 (which includes independent, assisted living and memory care, or some combination of the three), the average cost to build a new project is approximately $209,000 per unit. New construction, of course, comes with certain benefits. You will have a brand-new community with all the bells and whistles that can help attract attention. But you then have to fill it up, staff it and deal with the increasingly potential risk of a competitor opening up down the street. And to buy a stabilized, “A” level... Read More »CBRE helps refinance successful community
A 100-unit independent living community well located in Carmichael, California with a strong occupancy history was recently refinanced with the help of CBRE. Aron Will of CBRE National Senior Housing and Kevin Randles of CBRE’s Debt and Structured Finance office arranged a $12 million fixed-rate loan from Fannie Mae. CBRE Multifamily Capital originated the loan on behalf of the borrower, Ray Stone, Inc., which operates five other communities with over 800 units in California and has operated the Carmichael community since its opening in 2003. Occupancy has ranged from 95% to 99% in the last few years, with rents starting at $1,500 a month and going up to about $4,000 a month. The refinance... Read More »Seniors Housing And The Flu
This past flu season has been blamed for many of the current seniors housing occupancy problems, but it has been bad for three years. When looking at the decline in seniors housing occupancy over the first two quarters of this year, much was made of the unusually severe flu season. While we are sure some companies and individual communities were hit particularly hard by this past winter’s flu, Barclays came out with an industry report which included a very interesting graph. It depicted the percentage of visits for influenza-like illnesses reported by the U.S. Outpatient influenza-like illness Surveillance Network. Yeah, I had never heard of that one either. Anyway, it did show that there... Read More »Griffin-American III acquires Trilogy Health Services
Nearly doubling its size in one fell swoop, Griffin-American Healthcare REIT III is acquiring Trilogy Health Services for approximately $1.125 billion (including the assumption of $205.1 million of debt) pursuant to a joint venture with NorthStar Healthcare Income. Griffin-American will own approximately two-thirds of the joint venture (bringing total real estate and related investments to approximately $2 billion) and will act as its manager, while NorthStar will own the other third. Also as part of the transaction, Trilogy’s founder and CEO, Randy Bufford, and other members of the company’s management will own a $24 million, or 3.6%, stake in Trilogy. Mr. Bufford will remain in place to... Read More »New Fund hits development market
Blue Moon Capital Partners, a seniors housing private equity investor founded by industry vets Kathryn Sweeney and Susan Barlow, just announced the first project for its $175 million fund, Blue Moon Senior Housing I LP (BMSH). In December 2014, Blue Moon secured a $175 million capital investment from Scout Fund II through Hawkeye Partners, LP. Kicking off development will be a 180-unit seniors housing project in Northville, Michigan being developed with The Damone Group, which has developed over 120 projects in the last 40 years. With 96 IL units, 44 AL units and 40 MC units, the community will be built by the developer’s construction arm, Damone Construction, and operated by its... Read More »Build it and they will come
If your marketing team presells 75% of all units within two months of initiating pre-sales (and that number nears 95% pre-sold just after groundbreaking), then you clearly did your homework in determining local demand. Either that or what you offer is just better than any competitor around you. That is what Greenbrier Development has experienced as it breaks ground on Phase II on Beacon Hill at Eastgate, a CCRC in Grand Rapids, Michigan. First opened in 2010 with 114 independent living units, 40 assisted living units, 35 memory care units, 29 skilled nursing beds and 20 rental apartments, Beacon Hill filled to 95% occupancy within just two years. Now, Greenbrier is adding 56 independent... Read More »Harrison Street makes an exit…and a return
An assisted living community in Mesa, Arizona has evolved a lot over its 30-year history. Built in 1985 as low-income housing, it was converted to seniors housing in 1996. Between 2003 and 2007, the owner at the time invested $5 million in renovations that allowed them to more than double rents in that time. Then, Harrison Street Real Estate Capital and its operating partner for the community, Milestone Retirement Communities, stepped in to purchase the community in 2008 for $15.85 million, or $90,600 per unit. Over time, the independent living units were reduced to make room for more assisted living. Currently there are 123 AL units, 30 memory care units and 22 IL units in 13 stories.... Read More »Schedule a demo
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