Bell Divests Itself of Senior Living Communities

As it seeks to solidify its position as one of the nation’s premier multifamily companies, Greensboro, N.C.-based Bell Partners Inc. has completed a $300 million sale of almost all its senior living communities. Senior Housing Properties Trust (SNH), a prominent public real estate investment trust, is the buyer.

Bell Partners has been a diversified real estate company for 35 years. Although its focus has always been primarily on the apartment industry, Bell opted to diversify into the senior housing sector about 10 years ago.

“I think there’s tremendous opportunity for investors in that sector,” Bell Partners President Jon Bell tells MHN. “However, it’d be my recommendation for investors to gain exposure through companies that have a specific focus on that business. It’s been challenging for us. We were in different asset classes, and our senior executives couldn’t focus all their time on the senior housing area. “They had to focus considerable time on our multifamily business.”

Bell Partners’ increasing prominence in the multifamily industry helped signal the time was right for a sale. The company has grown extensively in the sector, and is now the country’s 10th largest multifamily company. “We felt we would be that much better off if we could focus all our efforts throughout the organization on the apartment sector exclusively,” Bell says.

Announced July 26, Bell Partners’ sale is of 22 assets now, with another four properties to be sold by the end of 2011. The portfolio of 26 properties is comprised of 10 senior living assets in North Carolina, six in South Carolina, six in Florida, two in Virginia and two in Georgia. Two senior living communities in North Carolina will be retained by Bell Partners. “We kept those two because they were in lease-up and not yet stabilized,” Bell says.

“We felt a better price could be achieved after the properties stabilized. It’s likely we will sell those in the next 12 to 24 months. We already outsourced management of those properties, though we retain partial ownership.”

Other factors precipitating the sale included attractive lending interest rates, a strong market for senior-living property acquisitions, and an overall backlog of investment cash from prospective buyers, especially public REITs. Bell notes that his company felt a duty to its investors to explore a sale, and that he was proud of selling to Newton, Mass.-based SNH, owner of about $3.8 billion worth of primarily senior-living properties, including 27,000 units in 36 states.

It was ultimately, however, his company’s desire for a single-minded focus on multifamily that sealed the deal to sell most of its senior-living portfolio. “We’re really serious about our focus on the apartment sector, and about building a best-in-class apartment company,” Bell says.