Aegis Living, Blue Moon Acquire $350M in Senior Housing

Aegis Living Dana Point. Image courtesy of Aegis Living

Aegis Living and Blue Moon Capital Partners LP have teamed up to acquire a more than $350 million portfolio of 10 senior living communities across three Western states, marking a major vote of confidence in a market shaken by the coronavirus crisis.

Spread across California, Nevada and Washington, the 702-unit portfolio comprises assisted living and memory care apartments, all of them located in urban markets, including San Francisco, Las Vegas and the Seattle metro area. Aegis Living previously operated the facilities under a lease.

Following the transaction, the national assisted living and memory operator now has ownership in more than 70 percent of its 32 communities. The deal builds on an existing relationship between Aegis Living and senior housing investment specialist Blue Moon, which struck a joint venture in 2018 to acquire three Class A communities in California and Washington totaling 253 units.

Resurgence expected

This second JV comes after sharp declines in senior housing occupancy stemming from the public health emergency that has gripped the U.S. since last March. Occupancy of the property type fell to a historic low of 80.7 percent in the fourth quarter of 2020, according to data from the National Investment Center for Seniors Housing & Care (NIC).

Aegis Living Kirkland. Image courtesy of Aegis Living

In a statement on the deal, Aegis Living and Blue Moon acknowledged the disproportionate impact of the pandemic on senior housing communities nationwide but predicted a “resurgence” in demand for high-quality assisted living and memory care options. Dwayne Clark, Aegis Living founder, CEO and chairman, noted in the statement that the company plans to double in size by 2030.

The 10 properties that changed hands are all located in markets with high barriers to entry, favorable demographics and limited supply, the companies said, and include the following:

• Aegis Living Callahan House (Shoreline, Wash.)
• Aegis Living Shoreline (Shoreline, Wash.)
• Aegis Living Kirkland (Kirkland, Wash.)
• Aegis Living Las Vegas (Las Vegas)
• Aegis Living Dana Point (Dana Point, Calif.)
• Aegis Gardens Fremont (Fremont, Calif.)
• Aegis Living Granada Hills (Granada Hills, Calif.)
• Aegis Living San Francisco (San Francisco, Calif.)
• Aegis Living Pleasant Hill (Pleasant Hill, Calif.)
• Aegis Living Ventura (Ventura, Calif.)

Aegis Living has eight further communities in development, including three that are slated to open their doors this year in Bellevue, Wash.; Kirkland; and Seattle’s Eastlake neighborhood. The latter community, Aegis Lake Union, is a sustainable, 79-unit facility that broke ground in late 2019 and is now scheduled for completion in the fall or winter of 2021.

One in every five Americans are projected to be of retirement age in less than a decade, according to Census Bureau data. Despite the turbulence of the past 10 months, many in the industry predict that the demographic trends will drive robust demand for high-quality and affordable senior housing in the future.