Cerulean Partners, LLC recently announced the $4.25 million acquisition of a 116-unit independent living community in Las Vegas, Nev. in a joint venture with Real Estate Special Opportunity Portfolio and Real Estate Portfolio Management, both California-based investment funds. The total deal cost was $5.2 million including cap-ex dollars and closing fees.
Destinations at Eastern was previously owned by Starwood Capital and “suffered through foreclosure and the 2008 financial crisis,” according to Cerulean. A joint venture between Starwood and Orion Residential had purchased the community in 2006 for nearly $14.6 million as part of a large portfolio transaction, but the property had been foreclosed on by 2011.
A special servicer has been operating the property, which will be rebranded as The Echelon, for the past two years.
“We think the basis, low leverage, and upside for The Echelon coupled with a rebounding Vegas economy will prove rewarding for our investors,” says Kerry Haskins, Managing Partner of Cerulean.
Under its new ownership, The Echelon will continue to offer full-service independent living with food service, housekeeping, transportation, resident services, and other programming.
Cerulean will consider including personal care and home health services, along with expanding assisted living units, as part of its strategy to improve The Echelon’s operating performance. The JV partners plan to invest up to $500,000 in immediate capital improvements, and expect to increase occupancy and double net income in a three-year period.
Arrow Senior Living, based in O’Fallon, Mo., will manage the community. Cerulean and its joint venture partners’ investment was capitalized with debt from Town and Country Bank, based in Las Vegas. Minneapolis-based investment bank Northland Securities placed the debt.
Written by Alyssa Gerace