Through the acquisition of a distressed Massachusetts independent living property in a deal that closed this month, Benchmark Senior Living is solidifying its position in the market for continuing care retirement communities.
The second CCRC operated by Benchmark in its 46-property portfolio, the company says it is interested in the product type and is seeking opportunities to acquire CCRCs in its target geographic region spanning the eastern seaboard from Boston to Washington, D.C.
“We like the CCRC product very much,” says Benchmark President and COO Stephanie Handelson. “Those in major metro markets from Boston to D.C., if something were to come available we’d love the ones that have the expansion opportunity.”
The most recent acquisition added Lincoln, Mass. property The Groves to Benchmark’s portfolio for up to $35 million. The distressed, entry-fee CCRC was facing bankruptcy and Benchmark jumped at the opportunity.
“This happens to be a real gem, for a variety of reasons,” Handelson says. “The building is less than three years old. We like expansions where we can add assisted living or Alzheimer’s care and/or skilled nursing, and this project gave us the ability to add all three. Generally, others offer the Alzheimer’s value add. We are lucky enough to have an awesome SVP of Development to execute the value add or enhancement strategies and a SVP of Capital and Acquisitions, who search out these diamonds in the rough.
Benchmark is waiting on final title approvals to expand the property, a contingency built into the terms of the deal that would up the purchase price by $5 million, from the initial price of $30 million.
The community currently has 168 independent living units including 38 cottages and two other buildings. Plans are in place to add 88 health care units including 24 memory care, 26 skilled nursing and the remainder assisted living.
Its first CCRC property is located in Stamford, Connecticut, which helped in the process of educating The Groves residents about the shift, and gaining trust and buy-in about the process.
Benchmark arranged for residents to visit the Stamford property, ask questions, and allowed the two resident councils to meet without any Benchmark representatives present.
“It’s a process,” Handelson says. “It doesn’t happen overnight. But the biggest win is we protect 130 seniors’ investments.”
While the company does not have immediate acquisition targets on the horizon, the CCRC model is of interest in the long term, she says.
“We’re absolutely interested.”
Written by Elizabeth Ecker