Colorado-based Balfour Senior Living is paring down some of the ownership of its senior living portfolio in an effort to return investments to its partners. In a deal valued at $104 million, Boston-based AEW Capital Management L.P. has purchased a portfolio of three senior living communities from Louisville, Colo.-based Balfour.
The agreement marks yet another step in the joint venture between AEW and the regional owner-operator; Balfour has operated several senior living communities in Colorado since its inception 17 years ago, four of which are now owned by AEW with a fifth under development.
Balfour’s owner and CEO Michael Schonbrun said the deal serves to recapitalize the company and buy out dozens of investors, many of whom invested in the property nearly two decades ago and are now retiring or will do so soon. The sale will also enable the company to take advantage of expansion opportunities—perhaps beyond Colorado’s borders, Schonbrun told SHN.
“We had a number of people who invested with us 17 years ago when they were working and they are now retired and they would like some of their investment returned. We had a lot of discretion about how long to hold the assets or make a transaction. It felt like the right thing to do. Pricing is strong and that gives us power for future expansion.”
The three properties include The Lodge and the Residences independent living facilities and Balfour Retirement Community, which spans assisted living, skilled nursing and hospice services. Occupancy for all communities is in the mid-90% range.
Under the terms of the agreement, Balfour will continue to manage the properties under its operating company and for the 300 employees who work on the properties it will remain business as usual.
The company is mum about specific plans to expand, but says the growth will be conscious and conservative.
AEW and Balfour already maintain an existing partnership through which they are developing Balfour at Riverfront Park, a 205-unit community that will include independent living, assisted living and memory care. The two companies are in partnership on five properties including the development under construction.
While the joint venture served as a “win-win” in the most recent transaction, there are no current plans to expand under the existing partnership.
“We do everything on a case by case basis, but certainly enjoyed working with [AEW] in a wonderful partnership to date,” Schonbrun said.
AEW declined to comment future plans for the partnership.
Written by Elizabeth Ecker