Dees Stribling, Contributing Editor
Needham, Mass.–The Northbridge Cos. of Burlington, Mass., and Sandy River II of Portland, Maine, have finalized a $100 million joint-venture with the Chicago-based private equity firm Harrison Street Real Estate Capital. The JV will focus on developing and operating dedicated memory-care facilities and assisted living communities, particularly in New England.
The JV might develop as many as 10 projects of about 52 to 62 units each. The primary thrust of the venture will be Avita-branded senior housing assets consisting of long-term healthcare properties catering to seniors in need of health-related services and cognitive care. According to Northbridge, there’s significant unmet demand for memory care within its primary markets, where it’s difficult to develop such properties.
“The reason we’re focused on New England is because of the high barriers to entry, especially in greater Boston,” James Coughlin, CEO of Northbridge, tells MHN. “It’s a market with considerable site restrictions, and challenges in getting developments permitted. We’ve been in the market for over 20 years and have the expertise to meet those challenges.”
The first transaction funded by the partnership is Avita of Needham, a 62-unit assisted living community specifically designed to care for individuals with memory loss. The $15 million development in Needham, Mass., a western suburb of Boston, is under way, with completion slated for early 2011. “We’ve already started to receive calls by families interested in reserving units within this property,” says Coughlin.
Avita of Needham will not only serve seniors with Alzheimer’s disease, but also those with mild to moderate cognitive impairment and other related dementias. The community is designed to create four distinct “neighborhoods,” each with its own living areas, dining facilities, and private courtyard to minimize confusion and maximize the resident’s freedom of movement in a safe environment.
Northbridge owns and operates independent and assisted living facilities as well as facilities for seniors with dementia, and Coughlin estimates that about one in eight of the company’s residents will eventually need some kind of memory-care services over time. “The demand is there now,” he says. “And as the elderly population grows, so will the demand for facilities to care for loved ones with dementia.”
He stresses that the facilities envisioned by the JV will be for middle-income to upper-middle-income residents. “When you develop too high-end of a product, a lot of potential residents will choose the option of staying in their homes if they can,” he notes.