Washington, D.C.-based Capitol Seniors Housing recently acquired two senior housing properties in separate transactions for a total of $32.65 million.
The company closed the acquisition of an age-restricted senior community in Herndon, Va. from seller and original developer Sugarland Hill, LLC on Oct. 31. The 80-unit community was purchased for $15.65 million, or $195,000 a unit, and was 78% occupied at time of sale.
Principals of commercial real estate firm Avison Young’s Healthcare Services Group, Jim Kornick and Matthew Clinebell, positioned the property as an opportunity for a investor and operator to reposition the property as an independent living facility.
Capitol Seniors Housing intends to build out the property’s kitchen and convert it into independent living over time by adding food services and other amenities and activities.
Scott Stewart, founder and managing partner of Capitol Seniors Housing, described the purchase as an “opportunistic play” especially as the building already has ample dining room space. The private equity firm brought in one of its preferred operators, The Arbor Company, to manage the property, which is being rebranded as Arbor Terrace of Herndon.
Capitol Seniors Housing also recently bought Park Rose Estates, 100-unit independent living community in Syracuse, N.Y., for $17 million and a trailing cap rate of around 7.25%.
The acquisition of the 100% occupied Park Rose Estates marks the beginning of a new operator relationship with Spectrum Retirement, which is retaining management of the community.
In addition to the opportunity to work with Denver-based Spectrum, the purchase represents how Capitol Seniors Housing is adapting to the marketplace and where it is looking for acquisitions, Stewart said.
“We’re incented to look at secondary markets for yield since there are a lot of new players out there [looking at] the same opportunities as us,” he says.