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Seniors Housing News

Seniors housing market surpasses 1996 pricing records The seniors housing market hit record prices for second quarter 1997. In 1996, there were six mergers or acquisitions in this arena in excess of $100 million, with the 10 largest deals totaling $1.5 billion and 30,000 units, according to The Healthcare M&A Monthly, an Irwin Levin Associates' publication based in New Canaan, Conn. By September this year, there had been eight acquisitions with values in excess of $100 million and three deals valued at more than $1 billion each -- a record in the seniors housing industry. In only the first nine months, the 10 largest transactions have accrued more than $6.3 billion in value and nearly 90,000 units. The publication notes that the average price per bed in 1996 was between $40,000 and $45,000 vs. approximately $40,000 in 1995. As well, the average price per unit was $65,000 in 1996 vs. $55,000 in 1995. The values for price per bed and price per unit are moving upward. It is also anticipated that mergers and acquisitions will continue at a record pace.

Koll Construction starts three Brighton Gardens facilities Newport Beach, Calif.-based Koll Construction has been selected to build three Brighton Gardens assisted living facilities in Southern California for Washington, D.C.-based Marriott International at a cost of $27 million. All three projects will be developed as 90-unit facilities with 25 special care units and 45 skilled nursing units. The $8.5 million Carlsbad, Calif., facility was started in August and is scheduled for completion by fall 1998. The San Dimas, Calif., facility was started in October with a completion date set for winter 1998 at a cost of $9.5 million. A facility is also slated for Delmar, Calif., with groundbreaking in winter 1997 at a cost of $9 million and completion scheduled for winter 1998. The projects include full-service and private dining areas, activity rooms, country kitchens and a library. Brighton Gardens are three of the more than two dozen major projects currently being constructed by Koll in the western United States.

$70 million cluster-community started in Charlotte Resources for Senior Living (RSL) and CHA Enterprises, both based in Charlotte, N.C., have started developing a $70 million seniors cluster-community that is one of the first projects of its kind in the nation. The Village at Carolina Place, located in southwest Charlotte, is a project that combines independent living, assisted living, special care residences and a 20,000 sq. ft. medical office facility for an estimated 1,000 residents. The cluster-community is located on a 50-acre, campus-style site. The project is being developed in four phases: The Dorchester (375 units), The Laurels (98 units), The Haven (48 units) and The Cottages (50 units). Construction is under way on The Dorchester with initial occupancy scheduled for January 1998. The Laurels and Haven residences will have groundbreaking in January 1998 and are scheduled for completion by fall 1998. The Cottages will be started in fall 1999 and are set for completion by fall 2000.

AFL-CIO loans $1.4 million for assisted living facility The AFL-CIO Housing Investment Trust (HIT) financed $1.4 million toward the $7.4 million construction cost of McCormack House, a 96-unit assisted living facility, located in St. Louis' Central West End. McCormack House will help meet the need for seniors housing in the area. The facility will be built using 100% union labor and be financed by HIT, The Missouri Housing Development Commission, city of St. Louis, Boatman's CDC and owner equity. Of the 96 units at McCormack House, 32 units are affordable at less than 50% median income, 28 unitsare at less than 60% median income, and 26 units are at market rate. The project is scheduled for completion by July 1998.

MBK Seniors Properties Ltd. buys three communities for $36 million MBK Seniors Properties Ltd., a division of MBK Real Estate Ltd. based in Irvine, Calif., purchased three assisted living facilities in Southern California for $36 million. Senior Income Fund L.P., a subsidiary of New York-based Lehman Brothers, sold the properties with a combined 369 units in the portfolio. The facilities include: Pacific Inn, a 134-unit community in Torrence, Calif.; Nohl Ranch, a 133-unit facility in Anaheim Hills, Calif.; and the 102-unit Prell Gardens community in Van Nuys, Calif. The acquisitions bring MBK's total portfolio to seven properties with more than 1,000 units. At present, the new facilities are at 90% occupancy with rents between $1,500 and $4,400 per month.

Associate Editor Randy Henry covers the seniors housing news beat for NREI. He welcomes comments and news items via e-mail to [email protected].

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