US - Pramerica Real Estate Investors has set up a joint venture to acquire the Epoch Senior Living portfolio for $138m (€117.4m).
Pramerica will hold an 80% stake in the portfolio with the balance being held by American Retirement Corporation. The deal combined debt and equity with $42.5m put in by Pramerica as equity alongside $10.5m from American.
The portfolio is made up of 742 housing units. The majority are in the assisted-living sector but there are also some Alzheimer units. The assets are located in Arizona, Colorado, Georgia, Kansas, Minnesota, Nevada and Texas.
The portfolio was 93% occupied at the time the deal was completed. All of the assets were built in the late 1990s or in early 2000.
Senior housing continues to be an attractive niche for some pension fund capital. The demographics are very strong, especially for the population group in the 75+ bracket. This is growing by 30% annually.
Housing construction starts for this age group have slowed since the late 1990s making the existing product more valuable.
Pramerica is now raising capital for its third senior housing fund. It’s called Prudential Senior Housing Fund III. One of its initial pension fund investors is the Pennsylvania State Employees Retirement System which has committed $35m.
Pramerica said it would be looking at a variety of deals for this fund including the purchase of existing assets, forward commitments on new developments and mezzanine financing.