A Florida-based operator and developer of senior housing has acquired six properties in the Sunshine State under its newest partnership with a private equity firm.
Through a new partnership between Discovery Senior Living and Kayne Anderson Real Estate Advisors (KAREA), the companies have acquired six Class A properties comprising 1,930 units of senior housing, formerly owned by GE.
The acquired properties derive from a former partnership between Discovery and GE also known as the Aston Gardens communities. Under the new partnership, KAREA has replaced GE in the enterprise.
“This transaction represents the one-off sale of an equity position in a strong market,” a spokeswoman from GE told SHN. “Our core business is lending to the senior housing industry, and our commitment to the sector remains strong. In fact, our lending volume is up year over year, and we continue to aggressively seek opportunities to provide debt financing to businesses who meet our lending criteria.”
The properties are located throughout Florida in Naples, Parkland, Sun City, Tampa and Venice. The assets involved include a mix of 82% independent living and 18% assisted living units with a total portfolio occupancy rate of 97%.
“We are delighted that we were able to partner with KAREA in order to negotiate a buyout and keep the Aston Gardens assets in our portfolio,” says Tom Harrison, CEO of Discovery. “These properties are located in attractive markets with favorable demographic trends, and are thus well positioned to be a continued great investment for us.”
Discovery, which has been in the senior living industry for more than 20 years and with more than 2,000 units currently in the company’s portfolio, already has a series of construction projects planned to begin within the next 12 months under its “Discovery Village” brand, Harrison said in an interview with SHN.
These forthcoming projects are mostly geared toward assisted living, totalling roughly 900 units in the development pipeline.
But while these developments are exclusive to the company’s Discovery Village brand, and therefore not part of the enterprise with KAREA, that is not to say KAREA won’t be involved with these Village communities in the future, says Harrison.
“All of the Discovery Village projects are solely owned by Discovery Senior Living,” says Harrison. “KAREA is not involved with them at the time, but that’s not to say they won’t be involved going forward. We’re always looking for opportunities together to grow the enterprise.”
Today’s announcement of the acquisition marks the first portfolio of senior housing properties under the partnership between Discovery and KAREA. While the enterprise does not have any additional acquisitions immediately in the pipeline, according to a Discovery spokeswoman, both entities are looking at other areas for future portfolios.
“Kayne Anderson has a track record of making unique, quality investments in niche real estate. We’re excited to build on that and expand our portfolio through this partnership with Discovery, especially given their excellent track record in the senior housing sector,” said Al Rabil, managing partner and CEO of KAREA. “We will continue to evaluate strategic opportunities in the space.”
KAREA is the private equity real estate arm of Kayne Anderson Capital Advisors, a $24 billion investment management firm with 30 years of experience in real estate, growth capital, infrastructure, energy, middle market credit and distressed municipal sectors.
The company also has three funds with commitments of more than $1.4 billion, investing in specialized niche real estate sectors that include student housing, conventional multifamily unit and medical office space.
A request for comment from KAREA was not returned as of press time.
Written by Jason Oliva