The third-largest senior housing provider in the United States is on track to become “a little bit more nimble.”
On Thursday, the Des Moines, Iowa-based LCS announced that LCS Real Estate had closed a $300 million senior housing programmatic joint venture with a large institutional investor. The two parties will work together to execute on an investment platform, and Life Care Services will provide management services to the communities that are developed and acquired.
Originally, LCS had hoped to “raise $300 million-plus as an initial step-in,” President and CEO Joel Nelson told Senior Housing News in an interview for The Leadership Series.
“That’s an exciting place—we really think that syncs up with us being able to have a little more control,” he said.
The new fund will enable LCS to “play in all spaces,” he continued. “Value-add for life plan and rentals, new development and then core.”
The fund will also help change how LCS does business.
“Today, we get an opportunity and underwrite it with our real estate partners. Then we go out and say, ‘OK, who’s going to be our partner on this one?'” Nelson explained. “This new fund will allow us to be a little more nimble in the market. And it also allows us to play on the rental and life plan models. We have partners that prefer the life plan model, and then we have partners that want to stay in the fairway of rental.”
Additionally, the joint venture platform will use discretionary funds to invest in communities that LCS already operates.
“This is a milestone event in the next chapter of optimizing the company’s real estate platform,” David Laffey, EVP and senior managing director of LCS Real Estate, said in a press release. “The JV provides greater control, greater certainty of execution, and streamlines the investment process.”
LCS Real Estate has executed on development and acquisition transactions in excess of $800 million since 2016, and presently has an ownership stake in 37 senior housing communities across the country, including 13 life plan communities.
Written by Mary Kate Nelson