PrivCap pays $7M for Margate assisted living facility

A South Florida real estate investment company bought an assisted living facility in Margate for $7 million.

PrivCap Companies, based in Boca Raton and led by Donny Cohen, bought the 111-unit facility at 6810 Southwest 7th Street, according to records. That equates to about $63,000 a unit.

The building houses VIP Care Pavilion, which caters to seniors with memory and mobility impairments, including Alzheimer’s and dementia, according to the company’s website.

VIP Care, started in 1999, offers dining areas for each level of care, private and semi-private rooms, an activity and fitness room, computer tablets for video chatting with friends and family and an enclosed outdoor patio. The Margate building was built in 1972.

The seller was Bessli Capital Partners, a Miami-based developer and asset manager specializing in assisted living facilities. Bessli bought the building in 2018 for $3 million. COO Noah Slimak signed the deed to PrivCap.

PrivCap’s portfolio includes properties in Florida, New Jersey, Texas, and Georgia according to its website.

In 2018, PrivCap was a partner on a mixed-use project called 441 Rock, which included a 180-unit rental property, together with a Wawa convenience store, a Wendy’s restaurant and a self-storage facility.

While senior housing typically comes with strict caps on rent increases and other regulations to protect residents, investors can still reap profits as asset values rise, whether they hold or sell, even during after Covid-19, experts say.

The sector has outperformed all other commercial real estate asset classes since 2003, while average rents have increased every quarter since 2009, according to the NCRIEF property index, a benchmark for commercial property investments.

Earlier this month, Fairstead paid nearly $18 million for the Federation Davie Apartments in Davie, with plans to renovate the senior affordable housing property. In July, The Jewish Federation of South Palm Beach County sold an affordable senior housing complex in Boca Raton to Fairstead for $33.75 million.

The Richman Group is planning a 105-unit senior housing development in Allapattah.

In May, Welltower sold a Parkland senior housing facility for $55.7 million, a steep discount from its last sale price nearly five years ago. Earlier this year, senior housing and medical office real estate investment trust Ventas renegotiated leases for a firm that operates 121 of its senior living facilities across the country, to address the financial toll the coronavirus pandemic has taken on those communities.