Chicago’s senior living hot streak is continuing with CBRE’s purchase of a Lincoln Park facility for $151 million.
New York-based CBRE Investment Management bought the149-unit Belmont Village Senior Living Lincoln Park at 710 West Fullerton Parkway from Houston-based senior housing firm, Belmont Village Senior Living, in a deal that closed last week, records show.
Belmont had bought an existing property at 710 West Fullerton in 2016 for $7.5, public records show, and tore it down before developing Belmont Village Senior Living Lincoln Park, which was completed in 2019, according to reporting at the time. The senior living developers took out a $44 million loan from BMO in 2017, records show, although the company’s full investment into the development is unclear. A representative of Belmont declined to comment.
CBRE’s $151 million purchase includes $121 million for the property itself and $30 million for equipment and other items associated with it, property tax records show. At $121 million, the purchase price equates to $812,000 per unit.
Senior housing has been broadly of interest to CBRE, which announced a roughly $405 million investment in senior housing in the Netherlands, according to a Tuesday press release from the company. A representative of CBRE Investment Management did not respond to requests for comment.
In Chicago, the Lincoln Park property represents a niche subset of the senior living sector that caters to seniors looking for luxury accommodations. Shortly before the property opened to new residents in 2019, an article in The Chicago Tribune noted that the facility was developed to include high-end amenities, and that rent started at $6,500 a month at the time.
The sale is the latest in a series of similar transactions in Chicago and its suburbs.
In late February, four Chicagoland senior living communities traded in deals totaling $217 million.
Oak Brook-based commercial real estate giant, Inland Real Estate Group, bought the 156-unit Clarendale of Mokena senior living community at 21536 South Wolf Road in Mokena from Des Moines, Iowa-based LCS Senior Living for $72 million, according to public records.
About the same time, records showed that New York-based real estate investment firm, Town Lake, bought the 198-unit Sheridan at Green Oaks for $65 million from Chicago-based senior housing firm, Senior Living Corporation. The firm rebranded the community Modena Green Oaks.
And a venture led by Chicago-based Annenberg Investments bought a senior living property in Chicago’s Lakeview at 3121 North Sheridan Road for $30 million from Chicago-based REIT Ventas, according to a press release from Berkadia.
When Ventas put the 296-unit property on the market last year, marketing materials noted that the property could be converted to apartments because its operator, Brookdale Senior Living, had chosen not to renew its lease agreement with Ventas. Under the new ownership, the property will be managed by Peak Properties and leased by Chicago-based brokerage, Cross Street.
Not every recent senior housing deal has ended in a win for the seller.
Blackstone sold its Lake Barrington Woods senior living facility in February to Sabra Health Care REIT for $50 million, which came out to a roughly 30 percent discount from the $73 million New York-based Blackstone paid in 2017.
In a related sector, Skokie-based private equity firm Cascade Capital Group recently sold off two medical facilities geared toward seniors in the Chicago area.
Cascade sold The Grove at Evanston at 500 Asbury Avenue in Evanston for $16.8 million, and The Grove at The Lake at 2534 Elim Avenue in Zion near the Wisconsin border for $16.1 million, public records show. Both properties operate as post-hospital rehabilitation centers that offer outpatient services and long-term stays.
Demand within the sector is expected to grow as the baby boomer generation ages.
The population of Americans over age 75 is expected to rise by more than 4 million people by 2030, according to U.S. Census Bureau data compiled in a report from PWC.
The National Investment Center for Seniors Housing & Care expects that limited new supply and steady growth in demand will drive the average senior housing occupancy rate above 90 percent this year, potentially reaching the highest occupancy rate reported in the 20 years that the NIC has tracked this data, PwC noted.