SEQUIM, Wash. — A joint venture between Oxford Capital Group LLC and Fortress Investment Group LLC has acquired a three-property, 256-unit seniors housing portfolio located on a single campus in Sequim.
The properties were built between 1974 and 2007 and are located northwest of Seattle, just across the Salish Sea from Victoria, British Columbia. Evans Senior Investments (ESI) brokered the $54 million transaction.
The buyer acquired the properties from an independent family operator. Oxford’s seniors housing management affiliate, Oxford Living US LLC, will manage the properties. Terms of the transaction were not disclosed.
“We are excited to continue to expand our seniors housing silo as we strategically assemble a portfolio of properties throughout the United States and Canada,” says John Rutledge, founder, chairman and CEO of Oxford Capital Group. “Oxford Living has made targeted seniors housing acquisitions and investments in a number of growing markets throughout the southeastern United States and Canada, including Florida and Ontario. We plan further portfolio acquisitions in these and other markets.”
“This transaction builds further on our strategy of acquiring seniors housing assets with scale in attractive demographic areas that are well positioned to weather an inflationary environment,” adds Peter Stone, managing director at Fortress.
“While most institutional investors focus on high-end development in urban centers, our strategy is to buy overlooked mid-market properties which are dependable, comfortable and affordable,” says Lawrence Cummings, president of Oxford Living.
The buyers plan to invest over $8 million in enhancing the properties, with plans for a significant expansion of the portfolio’s assisted living/memory care offerings.
Prior to the COVID-19 pandemic, the portfolio was 91 percent occupied and produced nearly $3.5 million in annual net operating income. Throughout the pandemic, the portfolio’s occupancy dipped slightly and at the time of closing occupancy hovered around 85 percent.
“The campus was surrounded by age-restricted condominiums that served as a feeder to the campus,” says Brendan DeSilvia, Associate at ESI. “Additionally, Sequim serves as a retirement destination for seniors throughout the Seattle metropolitan area. All of these factors helped contribute to the strong occupancy throughout the pandemic.”
Matt Jassak with Foley & Lardner represented the seller on this transaction.
Aron Will and Matthew Kuronen of CBRE National Senior Housing arranged a four-year, floating-rate acquisition loan through a regional bank for the buyers.