The luxury senior-living sector is booming

A once-struggling tower in Chicago just sold for twice its 2012 sale price

National /
Jan.January 04, 2020 12:00 PM
1802 2nd Avenue (Credit: Google Maps, iStock)

1802 2nd Avenue in Manhattan (Credit: Google Maps, iStock)

The 53-story Clare tower on Chicago’s Magnificent Mile has sold for $105 million, a sign that luxury senior living facilities hold huge upside in today’s market.

Fundamental Advisors LP sold the luxury seniors-only tower for twice what the private equity firm paid for the 334-unit tower in 2012, according to the Wall Street Journal.

The sale is a good sign for investors backing luxury senior living projects. The wider senior living sector has been held back by oversupply over the last several years as developers rushed to build new communities for the aging baby boomer generation. They’ve tended to stay in their homes longer than many industry watchers thought, leaving many new apartments are empty.

But some developers and investors are still betting that seniors will want to rent in urban areas after selling homes in the suburbs. The development costs associated with the projects, including the high cost of land in cities, means most of these urban senior developments will be pricey.

A unit at the Clare costs an average one-time entrance fee of $800,000 or so, along with around $5,500 monthly fees. The entrance fee is refunded when a resident dies or moves out. Entrance fees at a typical senior living facility is around $369,000.

Rents for a top-end unit at the recently opened Inspir Carnegie Hall, a senior living and assisted living project on Second Avenue in Manhattan developed by Maplewood Senior Living and Omega Healthcare Investors, run around $20,000.

Fundamental Advisors bought the Clare out of bankruptcy and poured around $20 million into the project. The project was developed by the Franciscan Sister of Chicago, a religious organization, and underperformed at launch just after the 2008 financial crash. [WSJ] — Dennis Lynch


Related Articles

arrow_forward_ios
Clockwise from top left: 162 West 13th Street, 325 Avenue Y in Brooklyn, 1281 Viele Avenue in the Bronx (Credit: Google Maps)

Here’s what the $10M-$30M NYC investment sales market looked like last week

Here’s what the $10M-$30M NYC investment sales market looked like last week
B6's Paul Massey and Tom Gammino (Photos via B6; Jll)

Tom Gammino joins Paul Massey’s B6

Tom Gammino joins Paul Massey’s B6
From left: Rybak Development's Sergey Rybak, 126 East 86th Street, 128 East 125th Street, Maddd Equities' Jorge Madruga (Rybak, Google Maps; Getty)

Manhattan investment sales show vital signs again

Manhattan investment sales show vital signs again
48-00 Grand Avenue in Maspeth and Prologis CEO Hamid Moghadam (Google Maps; Prologis)

Prologis picks up Maspeth parcel for $51M

Prologis picks up Maspeth parcel for $51M
Clockwise from left: 205 Brook Avenue in the Bronx, 219 Jay Street in Brooklyn, 377 Johnson Avenue in Bushwick and 54-25 58th Street in Maspeth (Google Maps; JLL)

Mid-market investment sales record strong week

Mid-market investment sales record strong week
454 East 148th Street and 5252 Kings Highway (Google Maps; Compass)

Bulk co-op buy in the Bronx tops mid-market investment sales

Bulk co-op buy in the Bronx tops mid-market investment sales
554 Fort Washington Avenue (top) and 235 Gardner Avenue (Google Maps)

East Williamsburg warehouse fetches $28M

East Williamsburg warehouse fetches $28M
SL Green CEO Marc Holliday and 410 Tenth Avenue (Google Maps; SL Green)

SL Green’s Hudson Yards deal is breakthrough for Manhattan’s i-sales market

SL Green’s Hudson Yards deal is breakthrough for Manhattan’s i-sales market
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...