New Senior Housing Investment Group Targets Middle-Market Acquisitions

A new senior living investment group is looking to capitalize on the nuances and fragmentation in the senior living industry, particularly middle-market operators following its launch this week.

Chicago-based Birchwood Health Care Properties plans to further its presence in the health care real estate industry with acquisitions that focus primarily on senior housing and nursing home assets, says Founder and Managing Principal Isaac Dole.

Though still in its infancy, Birchwood currently has an acquisition pipeline of approximately $50 million that Dole says has been “gaining traction” since he left his former post as managing director of acquisitions with Aviv REIT (NYSE:AVIV), also headquartered in Chicago.

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These $50 million worth of assets consist mostly of nursing homes and are at various stages of negotiations, be them verbal or in documentation such as a letter of intent, Dole said.

Beyond its existing pipeline, Birchwood is seeking acquisitions valued up to $100 million in the continental U.S. in primary, secondary and tertiary markets, according to the company’s webpage.

But despite all the new capital pouring into the senior living market overall, Birchwood isn’t worried much about competition from institutional investors, as the company plans to target operators in the middle-market in deals valued at $20 million and below, at least for now.

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“There’s not a lot of competition for the middle-market—those sub-$20 million transactions,” Dole said. “Smaller deals don’t really attract institutional investors.”

The company plans to use a “two-pronged” approach that is a matter of raising capital on an asset-by-asset, or portfolio-by-portfolio, basis and then matching the right investor for the right opportunities.

“The industry is very dynamic and is changing every day,” Dole said. “We’re looking to work with forward-thinking operators who have a strong emphasis on care, the ability to scale and are very hands-on and market-driven.”

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Dole plans to leverage his experience and network of relationships from his time spent working with Aviv REIT and past expertise as an associate with Marcus & Millichap (NYSE:MMI) to assist senior housing operators navigate the industry landscape.

“We acknowledge operating a senior housing facility or nursing home is a 24/7 business, which gives operators little time to focus on their growth plan,” Dole said. “Birchwood was founded to work with a select group of operators to supplement their growth efforts and provide them with entrepreneurial capital solutions.” 

Written by Jason Oliva

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