Senior Living Development News, December 4, 2014 - LCB Senior Living fast expanding in New England
December 4, 2014:
Your biweekly update on people, places, projects, plus...
LCB Senior Living fast expanding in New England
Few are talking about New England during this seniors housing development boom. In the Northeast, there are more barriers-to-entry, more existing product and more expensive land, in sharp contrast to a region like the Southwest where construction is fast leading to overdevelopment in some areas. But with a higher income population, an aging product and less competition for brand new communities, some developers have big plans in New England. According to our database, Epoch Senior Living has three “Bridges by EPOCH” communities under construction and set to open in summer 2015 in Connecticut. Benchmark Senior Living has been a consistent builder in New England, with two communities opening this year in Connecticut and New Hampshire. And Maplewood Senior Living, which already has eight properties in the region, has one more breaking ground in Connecticut early next year.
But Norwood, Massachusetts-based LCB Senior Living is developing big in New England. Started in 2010 by the management team of the former Newton Senior Living, which was one of the first assisted living developers and operators in Massachusetts, LCB currently operates 10 communities in four New England states. Plus, the developer has two communities in Connecticut, two in Massachusetts and two in New Hampshire opening in either 2015 or early 2016. All of the communities cost roughly $20 million to develop and follow a basic unit structure of 70-90 units per community, with about 20 units reserved for memory care and the remaining units available for either independent or assisted living. In fact, the IL/AL units are identical layouts, and IL and AL residents are interspersed in the same floors. When compared to the rest of the product in New England, LCB’s appears to be more high-end, costing on average $243,000 per unit and $279 per square foot compared to $225,000 per unit and $241 per square foot for all of New England, according to our database. LCB’s communities feature restaurant-like dining and utilize technology to improve residents’ communication with their families and with the staff. For most of the projects, LCB has partnered with The Architectural Team for the design, and has employed several different contractors, including Congress Companies and CWC. To help fund these projects, LCB has several equity partners, including Berkshire Capital, Virtus Investment Partners and Prudential as well as debt partners such as PNC Bank and B&T Bank. The company plans to grow by acquisition as well, having bought two Vermont senior living communities with a total of 297 units in August of this year for $80 million. In that deal, Virtus Investment Partners provided $23 million in equity, while PNC Bank spotted the remaining $57 million in debt. LCB is also in the active permitting stage at three separate sites in Massachusetts. For now, the company is focused on serving New England where its high profile makes it easier to find and acquire sites. But, don’t be surprised to see LCB stay in its region for too long...................Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today
Celebration, indeed, for one Florida developer
When there’s no senior living community within 15 miles of a town with an aging, well-off population, opportunity’s knocking for the first developer to get in there. That was case for Richard Ackerman, founder of Big Rock Partners, a private real estate investment management firm based in Beverly Hills, California and Delray Beach, Florida that invests in and develops a wide variety of commercial real estate. Ackerman, before founding Big Rock in 2004, previously worked at Apollo Real Estate Advisors and Crocker Realty Trust specializing in development and ownership of office buildings and other commercial and residential real estate. Recently, Ackerman bought land in Celebration, Florida to build a $60 million, 225-unit senior living community. Sabra Health Care REIT provided Ackerman with a $4.5 million loan to acquire the nine acres in Celebration, a planned community developed by the Walt Disney Company in the 1990s. Originally intended as a family community, the combination of residents aging in place, adult children wanting their elderly parents to move nearby, and the fact that there are no seniors housing facilities within 15 miles meant that there is probably a need going unfulfilled. Disney never even zoned land in the community for seniors housing, until now. To Ackerman, he was the right person, with the right plans, at the right time, in winning the right to build and receiving an exclusive option on all the adjacent land surrounding the property. The community he plans to build will basically follow a rental CCRC model, with 130 IL, 65 AL and 30 memory care units. It will be high end too, with rents ranging from $4,000 to $6,000, though Ackerman is sure enough of the surrounding population is looking for a product like his. Big Rock Partners is working with Walker & Dunlop to close on a third-party construction loan sometime in early 2015, while Sabra is providing mezzanine financing. Sabra will also purchase the property upon completion and lease it to Life Care Services. Perkins Eastman is the architect, and a contractor will be chosen soon, as construction is expected to begin in early 2015 and will be completed in summer 2016.
Ackerman plans to grow Big Rock primarily through development, with two to three properties a year as the goal, though he won’t shun a good turn-around acquisition opportunity. Big Rock Partners also has another large development in the works, this one a 300-unit community in Palm Beach County, Florida set to cost $80 million. Ackerman again brought in an institutional lending partner to fund the project. Plus, he has another project underway in South Carolina...................Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today
Mark Eves, the Democratic Speaker of Maine’s House of Representatives, released a report recently that showed a growing issue in Maine: that the state with the oldest population did not have enough adequate housing for its growing senior population. Maine already has the oldest population based on median age (44 years), and by 2030, one in four of Maine’s residents will be 65 or older. While the state’s Baby Boomers still have a ways to go before they need senior care, 17% of the state’s population is 65 and older, second only to Florida with 18%, according to the U.S. Census. If construction for seniors housing is so hot in Florida, what about Maine? In our seniors housing construction database, we count only a few projects started in the state in the last year. Brunswick-based provider Rousseau Enterprises announced at the end of October its plans to convert a former hotel into a 122-unit senior living building in Brunswick. The $12 million project will provide 82 IL units and 40 AL units and should be ready to lease by August 2015. Another developer in Maine, Woodlands Senior Living, is providing assisted living and memory care to a higher income population. The company, which operates 10 senior living communities in the state, recently announced the groundbreaking of a stand-alone memory care community in Lewiston, Maine, which will be the first in the Lewiston/Auburn area. The development will cost about $6.5 million, and will feature 64 beds in 46 units to open sometime next year. The Lewiston community marks the seventh for Woodlands, which operates solely in Maine. The median household income in Maine is about $5,000 lower than the national average, so the demand for seniors housing may for the most part be met with affordable housing, but one would think with an older population, developers would be a little more active in the state....................Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today
We’d like to hear from you!
Please send your development news to us at:
To advertise in Senior Living Development News, contact us at: