A senior housing operator is cashing out on two Silicon Valley memory care facilities as investor demand for elder care properties continues to build.
Vacaville-based Calson Management sold Crescent Oaks in Sunnyvale and Silver Oaks in Menlo Park for nearly $24.3 million in an off-market deal, the Silicon Valley Business Journal reported. Crescent Oaks traded for about $11.8 million, while Silver Oaks fetched roughly $12.3 million.
The buyer, Rocklin-based Kalesta Healthcare Group, took over operations in November. The sale comes as senior housing draws heightened interest from investors chasing what’s often dubbed the “silver tsunami,” signifying the surge of baby boomers aging into assisted living and skilled nursing facilities. With the oldest boomers now in their early 80s, operators and capital alike are preparing for a prolonged demand cycle.
That demand clashes with a constrained pipeline in the region. New development has lagged in recent years, squeezed by high construction costs and operational challenges, leaving markets across the region undersupplied.
Earlier this month, for example, Signature Development Group and SRM Development trimmed their plans for a senior residential complex in Oakland by nearly 10 percent. The imbalance between supply and demand has pushed resident costs higher while bolstering revenue expectations for owners.
Both properties carry mortgages backed by the U.S. Department of Housing and Urban Development. Those loans, typically fixed for 35 to 40 years at below-market rates, can be assumed by buyers.
That kind of debt can materially shift deal math, as stepping into HUD-backed loans gives buyers more flexibility on pricing and operations.
Kalesta also oversees operations at The Villas at Saratoga nursing home and plans to purchase another skilled nursing facility in Atherton, according to the Business Journal. The acquisition of Crescent Oaks and Silver Oaks mark the latest senior housing transactions in Silicon Valley, following Harrison Street Real Estate’s purchase of a Los Gatos senior complex in November for $54 million.
— Chris Malone Méndez
Read more
