Harrison Street Sells Senior Living Portfolio
Featuring more than 1,000 beds, the properties are spread across four states.
Investment funds managed by Morgan Stanley Real Estate Investing, the private real estate investing arm of Morgan Stanley Investment Management, have acquired a portfolio of eight senior housing properties from Harrison Street. The properties total 1,186 beds and are situated across four states.
The communities are in the Baltimore, Philadelphia, Boston-Providence, R.I., and Danvers, Mass., areas. The portfolio was initially acquired by Harrison Street in a joint venture with Brightview Senior Living in July 2014. Brightview Senior Living continues to manage the properties and have an ownership interest in the portfolio with MSREI.
The portfolio has consistently demonstrated strong operational performance. It includes a variety of amenities including restaurant-style dining, games rooms, libraries and fitness centers.
In September, Harrison Street purchased a senior housing portfolio totaling 743 units from Brightview as part of their joint venture agreement. The five properties are located in Massachusetts, Maryland, New Jersey, Pennsylvania and Virginia. PGIM Real Estate provided Harrison Street with a $252 million loan to recapitalize the communities, according to public records. It was the first post-pandemic deal between the two companies. Brightview will continue to operate the properties.
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A leading investor in the senior housing sector, Harrison Street has invested about $14.5 billion over 42,000 units. This year, the firm has invested more than $550 million in new senior housing communities. Following the latest transaction, Harrison Street and Brightview have a remaining shared portfolio consisting of 21 assets totaling more than 2,900 units as part of an ongoing 10-year partnership.
The JLL National Seniors Housing Capital Markets team representing the seller in the latest deal was led by Senior Managing Directors Jay Wagner, Rick Swartz and Aaron Rosenzweig, Director Tim Hosmer and Analyst Sean Kirk.
JLL also secured Freddie Mac acquisition financing for the transaction. The debt advisory efforts were led by JLL Managing Director Allison Holland and Associate Alex Sheaffer.
Harrison Street activity
The firm’s latest transaction come about two months after Harrison Street closed its ninth U.S. opportunistic real estate fund, Harrison Street Real Estate Partners IX, LP, and its associated co-investment vehicles, with approximately $2.5 billion in equity commitments. The fund will have more than $7 billion in buying power and will leverage Harrison Street’s experience in alternative real estate investments.
To date, Fund IX has allocated almost 70 percent of its total equity across 70 assets spanning seven sectors, with the largest concentrations in student housing, senior housing and data centers. The remaining capital is expected to focus primarily on acquiring well-located but underperforming assets and those with strained capital structures in need of liquidity that offer distressed pricing.
The fund’s first development project, a student housing asset at the University of Wisconsin called VERVE Madison, was recently delivered 100 percent pre-leased. The joint venture between Harrison Street and Subtext completed the 12-story, 142-unit building with 536 student beds.
