Benchmark Senior Living has received approval to acquire senior living community the Groves of Lincoln for a sum of up to $35 million, following the community’s default on more than $88 million of tax-exempt bonds.
Plans to expand upon the existing campus would effectively turn the property into a Continuing Care Retirement Community, the second of this property type in Benchmark’s portfolio.
Benchmark emerged as the “stalking horse” among hundreds of potential bidders, and received court approval this week to acquire the property for up to $35 million; $30 million upfront and an additional $5 million pending approvals for expansion.
Plans to modify the property include the addition of 90 units spanning assisted living, memory care and skilled nursing which will provide a full continuum of care on campus, Benchmark told SHN. The deal is expected to close July 1.
The not-for-profit community had two sponsors under its previous ownership including Masonic Health System (MHS) of Massachusetts, Inc. and New England Deaconess Association – Abundant Life Communities, Inc. (DALC), with 80% and 20% membership interests, respectively.
The Groves used $88.43 million in bonds issued by the Massachusetts Development Finance Agency to finance the construction in 2009, shortly after which it gained potential occupancy of 75% based on initial reservations. At the time of the bankruptcy filing, however, the community was only 56% occupied due to initial entry fee deposit cancelations.
The property modifications will help to reposition the community, Benchmark says.
“The Groves operates in a very strong market and we will dedicate substantial resources to marketing the property,” Sarah Laffey, senior vice president of capital told SHN in an email. “We believe bringing the full continuum of care on campus will make the property an attractive alternative for seniors as they are evaluating their options in the market.”
The company, which operates 48 properties including the Groves, is concentrated in the Northeast and counts one other CCRC, based in Connecticut. Acquiring the property was highly preferable to new development from a cost standpoint, Laffey said.
“We were able to purchase the Groves at a price substantially less than what it would cost us to construct the project,” she said.
Written by Elizabeth Ecker