Kisco Senior Living acquired ownership of a 289-unit Florida continuing care retirement community (CCRC) in August about a year after purchasing $48 million of its debt.
The for-profit senior living developer and operator has acquired about $107 million of debt for three CCRCs in the past few years, going on to gain ownership of two of them, including the transaction that closed last month.
While all three communities were experiencing some level of financial distress at the time their debt was acquired, Andy Kohlberg, founder and president of Kisco Senior Living, believes there’s also opportunity for investment in properties requiring extensive renovations.
“Many out there that don’t have capital structure issues do have large, looming capital expenditures needed in order to remain competitive in the marketplace,” he says. “We think there are lots of opportunities to come up with creative structures for these CCRCs that might be 20-30 years old and need major renovations.”
Kisco now operates 20 communities after gaining ownership interest of La Posada, a 289-unit CCRC in Palm Beach Gardens, Fla., in early August about a year after acquiring an approximately $48 million loan on the property.
As owner, Kisco plans to expand the community with another 40-60 units of assisted living on an adjacent parcel of land.
“What we’re looking for is the ability to add value through whatever means that takes, whether it’s adding capital or management expertise or both,” says Kohlberg. “What we generally look for is, ‘What’s the value add? What can we bring to the table that’s a win-win for the residents and the community?’”
The operator and developer has acquired the debt of two other CCRCs in the past few years, University Village in Tampa, Fla., and Villa de San Antonio in Texas, and now owns two out of the three (Kisco is having “ongoing conversations” with the borrower that currently owns and operates University Village).
Kisco Senior Living continues to consider distressed communities for acquisition, but Kohlberg expects more activity when it comes to those in need of a capital infusion. Even CCRCs that are performing well at the present will likely need substantial capital expenditure to be sustainable for the next 20 years, he says.
“A lot of companies don’t have the capital to do that,” says Kohlberg. “We see that as an opportunity.”
Ed. note: A previous version of this article incorrectly identified Villa de San Antonio as The Villages of San Antonio.
Written by Alyssa Gerace