Formation Capital Buys $400M Seniors Housing Portfolio

By Barbra Murray, Contributing Editor

Sizeable seniors housing portfolios are not easy to come by, but Formation Capital has gotten its hands on one. In a partnership with global principal investment concern SAFANAD, the private investment management firm snapped up a group of 36 seniors housing communities in a transaction valued at approximately $400 million.

Spanning 13 states and consisting of 2,600 units, the collection of assets is 65 percent assisted living, 18 percent independent living and 16 percent memory care.

“This transaction demonstrates Formation Capital’s continued focus on expanding its real estate footprint in private pay seniors housing,” Brian Beckwith, CEO of Formation Capital, said in a prepared statement.

Senior Lifestyles Corp., Frontier Management, Prestige Senior Living are among the entities that will manage the properties.

The transaction marks the second time in less than a year that Formation Capital and SAFANAD have partnered on a purchase. In September 2012, the team grabbed a 68-property portfolio of skilled nursing facilities on the East Coast for $750 million. The companies made their first buy together in 2011, buying 36 assets in three separate deals.

News of Formation and SAFANAD’s most recent acquisition comes just days after another major transaction in the seniors housing sector. Just before the Fourth of July holiday, Health Care REIT Inc. announced the closing of the final phase of its $4.3 billion acquisition of the 10,000-unit Sunrise Senior Living Inc. portfolio.

Timing is everything, and it appears that the present is not a bad time at all for seniors housing investment. As noted in a 2013 trends report by PwC and the Urban Land Institute, “The sheer number of Americans aging into retirement promises steady demand for seniors’ housing over the next decade.”