A relatively new entrant to the senior living market plans to use an $80 million capital injection toward the development of 10 properties in Florida, with a heavy focus on memory care for the first several projects.
Validus Group, the parent company of Tampa-based Validus Senior Living, last week sold affiliate Validus Strategic Capital Partners for $80 million to investment firm RCS Capital Corporation (NYSE:RCAP).
The company will use a significant portion of the proceeds toward the development of about 10 new properties throughout the state, four of which are already in the ground in Tampa, Sun City, Palm Bay and Sarasota, Validus Senior Living CEO Steve Benjamin told SHN.
Validus has teamed with a St. Petersburg-based developer to build the new properties, which will comprise primarily memory care services in a 58-unit, 78-bed structure, with a few exceptions. Validus declined to disclose the developer’s name to SHN, but says it plans to target areas like Bonita Springs, Cooper City and Winter Park for development.
Established as a subsidiary of Validus Group little more than a year ago, Validus Senior Living’s strategy banks on what Benjamin calls a “winning formula” that emphasizes the company’s intentions to build rather than buy, and also reinforces its brand within Florida and the Southeast corner of the U.S.
“It’s cheaper to build than it is to buy,” Benjamin said. “It’s a seller’s market. Our niche is to build a strong regional portfolio first.”
Older assets, those between 20 and 30 years old, that need a capital infusion have higher cap rates of about 6%-6.5%, are less appealing for the company when it comes to build vs. buy in the region.
“It’s not worth looking at acquisitions,” said Benjamin.
The company’s first forays into the senior living Florida market occurred last September when it acquired two memory care communities in St. Petersburg and Bradenton: the 58-bed Ivy Ridge Living and the 78-bed Hidden Lakes Living.
Validus recently completed the acquisition of a third memory care community, InspiredLiving at Sarasota, and is currently underway on a 122-unit, 98,000-square-foot assisted living and memory care project called Lakewood Ranch, also in Sarasota and the company’s first assisted living project.
Validus expanded upon its strategic growth plan to build out its Florida-Southeastern presence when it was awarded a contract to manage Campo Felice, a 323-unit independent living luxury apartment community located in Fort Meyers, Fla.
The community, which is expected to open this Fall, has been undergoing a $55 million transformation since last year from its previous state as a Sheraton hotel.
While memory care has been the company’s main focus thus far, Benjamin says the company will spend more time looking at developing more on the independent living and assisted living side down the road.
“The expanding demand for memory care right now seems to be a no-brainer,” he said.
Written by Jason Oliva