East Bay Senior Housing Complex Fetches $540K Per Unit

Soaring demand for senior housing and assisted living facilities in the Bay Area is pushing sale prices for these facilities to record levels.

Healthcare REIT Welltower this week purchased a 187-unit assisted living campus in Walnut Creek from PGIM and Kisco Senior Living for $101M, or about $540K per unit.

The PGIM and Kisco joint venture bought the Byron Park complex in 2017 for $77M. Kisco completed a $5M renovation on Byron Park last year.

The assisted living campus at 1700 Tice Valley Boulevard features an all-day restaurant-style dining center, a heated swimming pool and spa, a greenhouse and a library.

The Byron Park campus is the second East Bay senior housing complex to trade in recent weeks.

In July, Northwestern Mutual sold Cortona Park, an assisted living community in Brentwood, for $39.2M to a joint venture between Cogir and an unspecified national investment partner in a deal brokered by JLL. Cogir renamed the 4-acre complex, located at 150 Cortona Way in the San Francisco suburb, Cogir of Brentwood.

Welltower has been steadily expanding its senior housing portfolio in California this year. Last month, the Ohio-based REIT—formerly known as Health Care REIT—purchased Oakmont of Segovia, a 160-unit facility in Palm Desert, for $49.3M in a deal that pencils out to $308K per unit.

The Oakmont campus, encompassing 218K SF, was sold by Irvine-based Oakmont Senior Living. The campus opened in 2010 on an 8.6-acre site located at 39905 Via Scena in Palm Desert in the Coachella Valley.

In February, Welltower acquired two senior living communities in Sacramento that were part of six-asset, $297M sales by Windsor-based Oakmont Senior Living. Welltower reported $787M in acquisitions in Q1 2022 and 78% occupancy for its senior housing portfolio.

Approximately 78% of the senior housing units vacated during the pandemic have been reoccupied, according to a recent report from the National Investment Center.

Senior housing occupancy hit 81.4% in Q2 2022, up 3.4% from the pandemic low of 78% in Q2 2021.

“The sector has not fully recovered from occupancy losses during the height of the pandemic, but the continued upward occupancy trend despite workforce and supply challenges is a positive sign,” said Cuck Harry, NIC’s COO, in a statement.

On the supply side, inventory increased by a paltry 3,489 units due to construction slowdowns. The number of units under construction is the lowest since 2015, NIC reported.

Boston (83.6%), Minneapolis (85.1%) and Portland (85%) had the highest senior housing occupancy rates in Q2 2022, NIC said.