CNL Healthcare Trust Expands Senior Housing Portfolio with $226M Acquisition

By Keith Loria, Contributing Writer

Orlando, Fla.—CNL Healthcare Trust, Inc., a real estate investment offering focused on senior housing and healthcare real estate, purchased seven senior housing communities valued at nearly $226 million through a joint venture agreement with Sunrise Senior Living, Inc.

Under the terms of the joint venture, CNL Healthcare Trust owns approximately 55 percent of the portfolio, while Sunrise owns the rest and will continue to operate the seven communities under a long-term management agreement.

“We have a long running relationship with Sunrise, who knew the quality of these assets, and they were ready to take them out and brought them to us first, and we went to joint venture,” Sharon Yester, CNL Financial Group’s chief asset management officer, tells MHN. “All of the seven are under five years old, and offer high quality in some of the very best markets.”

The seven senior housing developments represented in the portfolio are Sunrise of Santa Monica in Santa Monica, Calif.; Sunrise on Connecticut Avenue in Washington, D.C.; Sunrise at Siegen in Baton Rouge, La.; Sunrise of Metairie, La., near New Orleans; Sunrise of Gilbert in Gilbert, Ariz., near Phoenix; Sunrise of Louisville in Louisville, Ky.; and Sunrise at Fountain Square in Lombard, Ill., near Chicago.

All totaled, the seven communities consist of a total of 687 living units, comprised of 374 assisted living units, 184 memory-care units and 129 independent living units.

“It’s always good to have a newer product—the upkeep is less—But the real factor for us is that over time, senior housing has developed a lot and the people who build and operate them learn the right size, the right mix and the right layout for services and socialization,” Yester says. “The ambiance of these properties was very important for what we were looking for.”

CNL Healthcare Trust has been very active since February, acquiring interests in senior living communities valued at more than $310 million, in nine states and the District of Columbia.

“It’s a direction we chose to go over the past 18 months based on the compelling demographics of what’s going on in America,” Yester says. “We have those turning 65-plus growing by nearly 10,000 a day and you go forward to 75-plus and 85-plus growing even greater. Senior housing is by and large a need driven aspect of what’s going on in our culture.”

The two companies have been connected since CNL Retirement Properties (a former REIT of CNL FInancial Group) purchased the Marriott Senior Living portfolio in 2000 and Sunrise became the operator of those assets.

“They did a great job and our relationship works well,” Yester says. “They have one of the strongest senior housing brands and we’re very excited about this and enjoying the opportunity.”