Lone Star Funds buys two Palm Beach County senior living complexes for $57M

Sales are part of larger portfolio deal in Florida, Georgia and Texas

Lone Star Funds founder and chair John Grayken, Discovery Senior Living exec Richard Hutchinson and the Palm Beach Gardens location of Discovery Senior Living. (Discovery, Getty)
Lone Star Funds founder and chair John Grayken, Discovery Senior Living exec Richard Hutchinson and the Palm Beach Gardens location of Discovery Senior Living. (Discovery, Getty)

Lone Star Funds bought two senior living complexes in Palm Beach County for a combined $57 million, as part of a 10-property portfolio deal in Florida, Georgia and Texas.

Records show Healthpeak Properties, a Denver-based real estate investment trust, sold all the complexes.

In the biggest deal, an affiliate of Lone Star Funds bought the 138-unit Discovery Village at Palm Beach Gardens at 100 Discovery Way for $31.9 million. The 116,383-square-foot property was built in 2016. Healthpeak, through an affiliate, bought it in 2019 for $27 million.

In the second deal, another Lone Star affiliate bought the 201-unit Veranda Club at 6061 Palmetto Circle North near Boca Raton for $25 million. The 191,356-square-foot property was built in 1987 on 6 acres, records show. Healthpeak’s affiliate bought it in 2006 for $18.7 million.

According to a news release last month, Lone Star Real Estate Fund VI bought the 10-property Discovery Village senior living portfolio from Healthpeak. The value of the deal was not disclosed.

Chicago-based Column Financial issued a $249 million loan for the 10 communities, including $29.4 million for the complex near Boca Raton and $37.6 million for the one in Palm Beach Gardens, records show.

Dallas-based Lone Star, led by founder and chair John Grayken, established its first fund in 1995. Since then, it has organized 21 private equity funds with capital commitments of over $85 billion, according to its website.

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Bonita Springs, Florida-based Discovery Senior Living will manage the portfolio under a long-term agreement with Lone Star, according to the release. Discovery Senior Living, founded in 1994 and led by Richard Hutchinson, develops, builds, markets and manages communities, according to the release.

The two South Florida properties offer housekeeping, maintenance and transportation services, as well as educational classes, health and fitness classes, and a concierge, according to their websites. Discovery Village at Palm Beach Gardens offers supervised independent living, senior assistance living and memory care, while Veranda Club has independent and assisted living.

The deals come on the heels of Healthpeak, led by Thomas Herzog, selling three Sonata-branded communities in Palm Beach County in May to Fortress Investment Group for a combined $29.3 million.

Fortress last month also bought a Coconut Creek facility from Healthpeak at 4175 West Sample Road for $11.9 million.

Florida, long a prime choice among retirees, enjoys a hot real estate market for senior living communities, including those that offer independent living and assisted living or memory care, or all three.

In March, Midtown Al Propco, led by Moshe Soskin and Joseph Hirsch, bought Midtown Manor assisted living facility in Hollywood for $9.7 million.