Seniors Housing Weekly Update-- High-Priced ALF Portfolio Sold

May 29, 2012


 

May 29, 2012. 60 Seconds with Steve Monroe. Five years after selling a Long Island portfolio, The Engel Burman Group has teamed up with Harrison Street Real Estate Capital to buy it back at the same price.......

 

High-Priced ALF Portfolio Sold
Sometimes, what goes around comes around, but in this case we are not talking about a bad thing. Five years ago, Bristal Assisted Living sold its five assisted living communities located on Long Island in New York for $290.5 million, or what was at the time a record $454,000 per unit.  The buyer was a partnership between Chartwell Seniors Housing REIT and ING Real Estate Australia. Well, five years later, the owners decided to sell, and when a potential sale to one or two of the REITs was taking too long, they called the previous owners and basically said this is the price, are you interested? Of course they were, since they were already developing more communities on Long Island and beyond and it made little sense to compete with themselves, especially since they had remained the manager of the original five.  So, The Engel Burman Group teamed up with Harrison Street Real Estate Capital and they are paying $290 million for those five and are buying a sixth separately from ING. And how are they doing?  Occupancy is just above 95%, and we have estimated the cap rate to be just above 7%. Who says you can’t compete with the REITs?

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