US - Pramerica Real Estate Investors (PREI) has put together a joint venture with American Retirement Corporation to acquire the Freedom Village senior housing property in Bradenton, Florida.
The total size of the transaction was US$95m (€74.2m). There was US$62m in financing provided by Capmark Bank.
The US$33m of equity in the deal was split up between the two investors. PREI obtained an 80% ownership in the property by providing around US$26.5m of the equity to the deal. The other 20% or around US$6.5m came from American Retirement Corp.
PREI’s Managing Director Noah Levy felt very comfortable with the property. He said, “This is a long and established property in the Bradenton market. It has several types of senior housing and is located close to a major hospital. The property would be very difficult to duplicate given the amount of land that is needed and how the state of Florida regulates these kinds of projects.
Freedom Village has a total of 760 senior housing units. It’s designed as a continuing care retirement community kind of project. It has 500 independent living apartments, 120 skilled nursing units and 140 beds of assisted living. The property was developed 20 years ago.
The property now has occupancy of 90%. The new owners hope to increase this in the future. Levy said, “We would hope that being under new management we can move the occupancy to the mid-90% range. It’s our opinion that the property right now doesn’t really need any capital improvements.”
PREI made this investment for one of its senior housing commingled funds. The real estate manager is now marketing its newest commingled fund, Prudential Senior Housing Fund III. One of its investors in the fund with a US$35m commitment is the Pennsylvania State Employees Retirement System.
This commingled fund has a value-added strategy which includes issuing forward commitments, buying existing assets and writing mezzanine debt loans.
