A Swedish investment firm looking to get into the senior housing space recently finalized a $500 million joint venture with an American senior living developer and operator.
Vero Beach, Fla.-based Watercrest Senior Living Group is partnering with Index International AB, headquartered in Stockholm, to co-develop senior living communities in the U.S., starting with a community in Lake Nona, Fla. that’s slated to break ground in April 2014. The joint venture’s focus will begin in Florida and the Southeast and then spread nationwide, says Watercrest CEO Marc Vorkapich.
Index International, a global independent investment company in real estate and equity investments, is built on private capital rather than institutional funding and maintains investments in Sweden and North America.
Watercrest specializes in operations, development, market repositioning, and advisory services in the senior living space and particularly memory care and assisted living, led by principals Vorkapich and Chief Financial Officer Joan Williams.
The two principals met with Index International’s co-founder, Bjarne Borg and agreed to a partnership after realizing the two companies’ shared core values, including a long-term approach to developing, owning, and operating communities. Within the joint venture, both companies are serving as co-developers, with Index as the equity partner and Watercrest bringing debt financing to the table.
“When Index decided to invest in senior housing, we met with numerous operators and Watercrest stood above the rest. Their operating culture resonated with us, as did the depth of their relationships with bankers, architects, and other key professionals,” said Borg.
The joint venture has plans to co-develop $100 million worth of senior housing each year and break ground on four to six projects annually depending on community size. Watercrest says they’re planning on building communities that will range from around 60 units to as many as 150, depending on the site and the local market.
“Our partnership with Index brings together the financial, development and operational resources to achieve explosive growth and create a significant footprint for Watercrest in the senior housing industry,” says Williams. “Our combined financial commitment puts us on pace to bring six communities online per year.”
The joint venture currently has around six or seven projects in its pipeline, in various stages of development, with at least four expected to break ground in 2014. Some projects will be standalone assisted living or memory care, while other communities will have both. The joint venture agreement has a five-year term with extension opportunities, Willams says.
“Partnering with Index enables us to swiftly respond to the incredible demand for assisted living and memory care with new and innovative communities,” says Vorkapich. “We are thereby raising the bar of quality nationally by serving more seniors and providing exponentially greater opportunities for our current and future associates.”
Written by Alyssa Gerace