Welltower Buys $98M In Chicago Senior Facilities

Senior living investment giant Welltower ended its Chicagoland selling streak with $98 million in new purchases last week.

Toledo, Ohio-based Welltower bought Arbor Terrace Highland Park and Arbor Terrace Glenview for $58 million and $40 million, respectively from Washington, D.C.-based developer Capitol Seniors Housing.

The purchases come after Welltower sold two medical office ground leases to Endeavor Health for $57 million and offloaded a Hinsdale senior living facility to Lincolnwood, Illinois-based Pearl Healthcare for $22 million, records show.

CSH developed the Arbor Terrace Glenview at 4700 West Lake Avenue with a $24 million construction mortgage from Northbrook Bank & Trust.

Then in 2018, CSH developed the Arbor Terrace Highland Park at 1000 Central Avenue with a $19 million loan, also from Northbrook Bank & Trust. The company’s total investment in both developments is unknown.

Representatives of Welltower and CSH did not respond to requests for comment.

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, PricewaterhouseCoopers noted.

Continuing the Chicago area’s senior care hot streak, Lincolnwood, Illinois-based Generations Healthcare Network sold a skilled nursing facility in Niles to Chicago-based Aperion Care for $29 million, records show. GHN bought the skilled nursing facility at 6631 North Milwaukee Avenue in 2014 for an undisclosed amount with a $26 million loan from Cambridge Realty Capital.

Both skilled nursing and senior living facilities have been trading for markups since the beginning of the year.

In January, Irvine, California-based IRA Capital bought the ground lease for the Advocate Health Care medical office building at 3000 North Halsted in Chicago’s Lakeview neighborhood from Nashville-based Healthcare Realty Trust for $56 million.

Then in March, Scott Goodman’s Farpoint Development, in a joint venture with Dallas-based Landes Group, bought a medical office building at the Silver Cross Hospital Campus in suburban Chicago’s New Lenox for $88 million.

Atlanta-based Meadows & Ohy purchased a University of Chicago primary care office in Hinsdale for $18 million from Chicago-based MedProperties in April.

And over the past year, Ariel Gurnicki, a former employee of Pearl Healthcare, struck out on his own and began an acquisition streak in the Chicago area.

Gutnicki bought 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 in March, public records show. Both properties operate as post-hospital rehabilitation centers that offer outpatient services and long-term stays.

Around the same time, four Chicagoland senior living communities traded for a total of $217 million. Three out of the four appear to have traded for a markup from their prior sale price.

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 in a deal that closed in March.

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 specialists, Senior Living Corporation, records show. The firm rebranded the community Modena Green Oaks in March.

A venture led by Chicago-based Annenberg Investments, Ltd, bought the senior living property in Lakeview at 3121 North Sheridan Road for $30 million from Chicago-based real estate investment trust Ventas, according to a February 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.

Not every recent medical deal has ended in a win, however.

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.

Similarly, a portfolio of medical offices and safety net hospitals in Chicago and west suburban River Forest are stuck in limbo as investors battle over a total of $89 million in unpaid debt.