CBRE Arranges Sale of Assisted Living Portfolio

New York—CBRE Capital Markets’ National Senior Housing team has arranged the sale of The Morningside House Mid-Atlantic Portfolio. The assisted living and memory care portfolio, encompassing 526 units, was sold to an affiliate of HCP Inc., for $186.3 million or $354,424 per unit.

The Morningside House Mid-Atlantic Portfolio consists of seven properties in the greater Baltimore and Washington, D.C., areas. It was developed between 1993 and 2013. The properties are Morningside House of Ellicott City, Ellicott City, Md.; Morningside House of Friendship, Hanover, Md.; Morningside House of Laurel, Laurel, Md.; Morningside House of Satyr Hill, Parkville, Md.; Morningside House of Leesburg, Leesburg, Md.; Morningside House of Saint Charles, Waldorf, Md.; and Poet’s Walk Memory Care, Fredericksburg, Va.

The seller, a joint venture between Morningside House Senior Living and Harrison Street Real Estate Capital, was represented by Lisa Widmier, executive vice president, CBRE National Senior Housing and Matthew Whitlock, executive vice president.

The “current operator desired to exit the business so we had to find a financial buyer and marry them with a new operating partner,” Widmier told MHN. “We found a buyer who was motivated to establish a new relationship with a particular operator.”

Transaction volume for larger-size offerings declined sharply as the public and private REIT buyers, who had been driving demand, were sidelined for various reasons, Widmier added. “We found a public REIT buyer who had new leadership and was motivated to change the composition of their existing portfolio of investments and operator relationships.

“The assets were encumbered by HUD debt the buyer needed to assume and this process took over eight months due to a HUD agency backlog. Market conditions continued to change during this period and portfolio performance declined. So we had to work hard to sustain the pricing. We were extremely impressed with the buyer, who upheld their obligations during this prolonged closing process. We stayed in constant contact with them during the HUD assumption waiting period.”

CBRE’s $2.8 billion senior housing transaction volume last year accounted for one-fifth of the estimated volume for the entire senior housing intermediary industry during the year. The company’s more than $4.5 billion in combined year-to-date transaction volume already greatly outstrips that of all 2015.

“CBRE National Senior Housing has had a long-term relationship with HSRE, as exclusive advisor in the sale or financing of more than $1 billion,” Widmier said.