Madison Marquette, GFH Target Senior Living With Portfolio Acquisition

The company partnered with the Bahrain-based asset manager to acquire 6 private-pay senior living communities in California, Washington and Michigan.

By Erika Morphy | July 24, 2019 at 05:19 AM (as appearing in GlobeSt.com)

WASHINGTON, DC—Madison Marquette, in a joint venture with the Bahrain-based asset manager GFH Financial Group, has acquired a portfolio of six private-pay senior living communities in California, Washington and Michigan.

It is the first significant move the company has made into this asset class. “We intend for this to be an anchor transaction that will grow our acquisition activities in the senior living space,” says Salime Yacoubi, Managing Director/Investments for Madison Marquette in prepared remarks. The transaction also establishes a base in this asset class for GFH as well, with CEO Hisham Alrayes commenting that it “represents an attractive opportunity to establish a foothold in the senior living market.”

The communities comprise 509 units and 589 beds with a unit mix of independent living, assisted living and memory care. They are run by senior living operators Senior Resource Group, JEA Senior Living and Senior Village Management. The JV entity between Madison Marquette and GFH will own the assets, with GFH as the investment manager and Madison Marquette as the day-to-day manager of the portfolio. The companies expect they will make further investments to add to their senior living holdings.

The properties in the portfolio include Independence Village in Brighton, MI; Chateau at River’s Edge in Sacramento; Chateau on Capitol Ave, also in Sacramento; Callaway Gardens in Kennewick, WA; Summer Wood in Moses Lake, WA; and Pine Ridge in Spokane, WA. The portfolio is stabilized at a 92% average occupancy rate. Besides the healthy occupancy, the portfolio also has an industry standard NOI margins of 34.4% and should be well-positioned for additional growth through incremental rate increases during the hold period, Yacoubi adds.

The timing is right for this deal, according to Amer Hammour, Chairman of Madison Marquette. “Through our recent platform activities in the space, we have studied the senior living sector carefully and have timed this transaction to benefit from what we believe are short-term industry dislocations and long-term demographic tailwinds,” he says in prepared remarks.

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