Private Investors Gravitate to Standalone Senior Assets

PORTLAND, OR—An aging population, a declining homeownership rate among older Americans and rapid wealth growth for senior-aged residents are driving demand and development in the seniors housing sector, according to a recent study by Marcus & Millichap. One such example of this demand is Courtyard at Mt. Tabor, a continuum of care senior housing community with 286 units of independent living, assisted living and memory care.

The senior facility has been purchased for $92 million by Strategic Student & Senior Housing Trust Inc., a public non-traded real estate investment trust sponsored by SmartStop Asset Management LLC.

Situated on 7.1 acres of land in the Mt. Tabor submarket of Portland, the community was constructed between 1999, 2000 and 2009 at 6125 and 6323 SE Division St. Courtyard at Mt. Tabor is currently 94% occupied and 100% private pay. An expansion project that will add an additional 23-unit memory care building to the facility is scheduled to break ground in the fall of 2018.

Courtyard at Mt. Tabor is a full-service retirement community that offers dining service options, wellness care and activities, transportation, personal care and support services, housekeeping, and a 24-hour front desk staff. The property received the Caring Stars award in 2015 and 2016, a program that honors the best senior living communities in the United States based on consumer reviews.

“Courtyard at Mt. Tabor aligns perfectly with our strategy to acquire stabilized properties that also offer an opportunity to enhance value through operational or structural improvements,” said John Strockis, chief investment officer. “The property also benefits from its ideal location in Portland, a welcoming city with premier senior housing fundamentals and high cultural acceptance of senior living communities.”

Integral Senior Living, a premier senior living operator that manages independent, assisted living and memory care properties throughout 18 states, has managed the property since 2011 and will continue to manage the property on a day-to-day basis on behalf of the REIT.

“We look forward to being partners with Strategic Student & Senior Housing Trust at Courtyard at Mt. Tabor,” said Collette Valentine-Gray, Integral Senior Living’s CEO and COO. “SSSHT is a top-notch company that intends to continue to invest in senior-living communities, with an eye to enhancing amenities and services. They share our vision and mission of making our communities vibrant, healthy and welcoming environments for residents and their families.”

This property is Strategic Student & Senior Housing Trust’s fourth senior housing acquisition. It also owns two student housing communities acquired for an aggregate contract purchase price of approximately $275 million.

Average senior housing costs in Portland range from $2,744 per month (independent living), to $3,995 for assisted living and $4,713 for memory care, according to A Place for Mom.

Factors impacting demand are employee shortages and steadily increasing healthcare costs associated with medical services, says the Marcus & Millichap report. Construction of assisted living and independent living facilities has comprised the bulk of deliveries in the seniors housing sector in recent years, but the development pipeline for these properties is beginning to decline. Completions for memory care units have increased substantially during the past couple of years. Alzheimer’s cases are on the rise and developers and operators are seeking to meet the needs of dementia care patients by constructing specialized facilities.

For a competitive advantage, senior housing developers are advised to provide unique or at least distinctive amenities, overcome the negative preconceptions of senior housing, enable seniors to age in place, provide memory care services, integrate seniors into the larger community, accommodate ancillary services, play up the marketing value of sustainability and look into the Greenhouse Project model, according to the BDC Network.