An assisted living and memory care operator has branched into the Midwest with the acquisition of a Michigan portfolio and has plans to continue growing, with up to $100 million allocated over the next year or so.
Premier Senior Living, a privately-held New York-based company, acquired the operations of five memory care and four assisted living buildings—a total of 188 units across four locations. Premier took control of the operations on June 1, 2016. The portfolio, aggregately known as The Pines, is comprised of four locations, all with memory care and assisted living facilities: The Pines of Clarkson, The Pines of Goodrich, The Pines of Burton, and The Pines of Lapeer.
CareTrust REIT, a publicy-traded real estate investment trust, acquired the properties for the purchase price of $30.8 million and added the operations to its pre-existing master triple-net lease with Premier.
Premier currently has plans to continue growing, with up to $100 million “teed up” for potential acquisitions over the next year, according to Wayne Kaplan, co-founder and managing member of Premier Senior Living.
“It’s easier for us to acquire bigger portfolios than one-off [properties],” Kaplan told Senior Housing News. “But we are interested in all the above. We like properties to be [roughly] 70 units or larger, but if it’s a portfolio like the 188-unit one, that’s okay, too. I would never rule anything out.”
Premier has acquired senior housing operations with CareTrust REIT in the past, most recently in the state of North Carolina. In addition to North Carolina and Michigan, Premier has operations in Florida, New York and Ohio. Working with the REIT has proved to have its advantages in the current acquisition market, according to Kaplan. Premier Senior Living was founded in 2006 and has been quickly expanding over the last year.
“Most of the larger REITs have backed off for a while, partially due to their [lower] stock prices and partially from the market conditions,” Kaplan said. “We did this acquisition with CareTrust REIT. They are a smaller REIT, which is good because they are somewhat more flexible.”
CareTrust originated as a spin-off from The Ensign Group in 2014 and currently boasts 144 net-leased heath care properties and three operated seniors housing properties in 20 states.
Michigan represents the fifth state where Premier has operations, and its first move into the Midwest region. Including the new properties, Premier now operates 22 memory care and assisted living communities. While moving into new markets, Kaplan is mindful over oversupply by monitoring local markets surrounding specific portfolios.
“Oversaturation is really a local thing,” Kaplan said. “You can’t look at an entire county, let alone a state, and say whether or not it is oversaturated. This business is a very local business—doesn’t matter if you’re a big company, small company or anybody in between.”
Written by Amy Baxter