Regional Provider MBK Aims to Double Senior Housing Portfolio

MBK Senior Living has had a big month, having recently grown its community portfolio from 16 properties to 22. And based on the company’s expansion plans, this could be only the start of a new era for the Irvine, California-based provider. It is continuing an aggressive push that could see it double in size and expand beyond the western markets where it has become well established, even as the company seeks a new president.

As of 2015, MBK Senior Living ranked as the 59th-largest provider in the nation according to industry association Argentum, with a total resident capacity of about 2,000 across its 16 properties. The most recent transactions bring its portfolio to 22 properties located in Arizona, California, Colorado, Utah, and Washington, offering independent living, assisted living, and memory care.

MBK owns certain properties outright and is the joint venture operator in other cases. Of the recent transactions, one was the purchase of The Commons at Dallas Ranch in Antioch, California, which was completed on Sept. 1. The company did not disclose the purchase price.

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The Commons includes 109 assisted living and memory care units, and amenities such as a formal dining room, library/media center, beauty/barber shop, and theater, according to a press release.

The other five recent transactions involved MBK assuming operations of five communities, in a partnership with real estate private equity firm Capitol Seniors Housing. One of those properties is located in the Orange County, California, community of Costa Mesa, and the others are in the Seattle area.

This mix of wholly-owned and joint venture projects is likely to be the approach that MBK takes to its growth going forward, as it seeks to double its presence within the next two years, COO Danielle Morgan told Senior Housing News.

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In general, MBK Senior Living is interested in properties with 75-plus units of either standalone or combined assisted living, independent living, and memory care. And it is thinking big not only in terms of the scale of its pipeline but in entering new markets.

“[We are targeting] the Western United States as we already have a strong presence and strong operating reputation,” Morgan said. “However, we are also interested in expanding outside the Western U.S. if an opportunity exists to acquire a regional cluster of communities on the East Coast and/or in the Southeastern U.S.”

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The expansion push will not be slowed down by the resignation of long-time president Terry Howard in August, according to MBK’s press release on the recent acquisitions.

Howard’s exit has not affected the company’s growth strategy or any of the company’s third-party management contracts, Morgan stated in that release.

Still, Howard’s departure to pursue new development opportunities means the company will be filling the leadership role for the first time since 2004, when Howard took the helm. That essentially means Howard has been leading MBK Senior Living for its entire existence. MBK Real Estate—a subsidiary of Mitsui & Co.—was founded in 1997 to manage a 600-unit senior housing portfolio. However, that was reduced to one community in 1999, and MBK opted against any additional growth for four years.

It was not until 2003 that the company decided to “fully commit” to senior housing, and then started its own operating company in 2006, according to Morgan.

Mitsui & Co. still is the parent company of MBK. With its U.S. headquarters in New York City, the company is involved in multiple business lines, including investment, project development and management, capital goods leasing and technology transfer, and general trading.

The financing for MBK’s growth is coming from Mitsui, along with debt and the investment of JV partners.

At the same time that the company is seeking a new president, it is committed to building out its team specifically to drive dealmaking, “re-engineering its infrastructure” to create a dedicated acquisition and development team.

MBK’s plans may support the notion that now is a good moment for some smaller players and private equity investors to seal senior housing deals, as the larger real estate investment trusts (REITs) have been sidelined by high prices and some uncertainty in the markets. However, MBK simply pointed out that it is positioning itself to meet the demand of an aging population.

“MBK Senior Living is poised and ready to meet the swelling demand for high-quality senior living housing and person-centered care,” said Morgan, in the press release. “Building on over a decade of experience, we look forward to continuing to fulfill our purpose to exceed the quality, service and care expectations of those we serve.”

Written by Tim Mullaney

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