Chicago-based investment manager Harrison Street Real Estate Capital recently struck a $520 million senior housing deal through a newly formed joint venture with The Shelter Group’s Brightview Senior Living entity.
The deal includes the acquisition of 11 properties and grows the value of Harrison Street’s assets under management more than $7 billion. The new assets collectively comprise 1,600 units, 50% of which are independent living and the rest allotted to assisted living and memory care.
Baltimore-based Brightview will continue to operate the properties, which are located in and around the Baltimore, Boston and Philadelphia areas, as well as in Staunton, Va. and Newport, R.I.
The deal is the first in a projected long-term programmatic partnership with Brightview, which developed nine of the communities in the portfolio, Harrison Street says.
“Brightview is going to be a vital partner and an important component of our senior housing growth strategy for years to come,” says Michael Gordon, principal and head of Harrison Street’s transaction group, in a written statement.
The latest acquisition follows the real estate fund-managment firm’s $380 million acquisition of a Long Island, N.Y.-based senior housing portfolio last year.
“This investment complements our existing portfolio and highlights our firm’s various cost of capital products, which creates excellent opportunities for our LPs,” says Christopher Merrill, co-founder, president and chief executive of Harrison Street.
Harrison Street acquired the portfolio on behalf of two funds: Harrison Street Real Estate Partners (HSREP) IV, its $750 million closed-ended fund, and Harrison Street Core Property Partners, its $2 billion open-ended fund.
HSREP IV purchased three of the communities, which average 82% occupancy, and have been undergoing capital programs and repositioning initiatives.
The firm’s open-ended core fund, which focuses on stabilized income-producing properties, purchased eight of the properties with an average occupancy of 96% or higher.
The portfolio was financed through multiple lending sources, including PNC, Fannie Mae, SynovusBank and GE Capital.
“The transaction continues Harrison Street’s decade-long healthcare strategy, which focuses on private-pay rental properties that serve independent living, assisted living and memory care residents,” Harrison Street says.
Written by Cassandra Dowell