Chattanooga Senior Living Facility Sells for $9M

CHATTANOOGA, TN-Cornerstone Healthcare Plus REIT has acquired Terrace at Mountain Creek, a 110,000-square-foot senior living facility, for $8.5 million. Cornerstone Real Estate Funds and its strategic alliance partner Servant Healthcare Investments are the entities behind the REIT.

Terrace at Mountain Creek has 116 units, including 42 independent living, 61 assisted living and 13 memory care. The Irvine, CA-based Cornerstone acquired the property from Yakima, Wash.-based Wilkinson Corporation, which will continue to manage the facility under the Good Neighbor Care brand. Terrace at Mountain Creek is 96.6% occupied.

“We were intrigued by the operator, one of the largest senior housing operators in the country with a track record for success,” John Mark Ramsey, CEO of Servant Healthcare Investments, tells GlobeSt.com. “We chasing down groups that we think provide great care and Good Neighbor Care is a strong example.”

Wilkinson Corporation held Terrace at Mountain Creek for seven years, but sold when investors wanted to exit, Douglas Ellison, executive vice president at Wilkinson Corporation, tells GlobeSt.com. Wilkinson specializes in the operational side of the business, and will receive a $1 million earn out for managing the facility—if revenues and occupancies remain consistent over the next 24 months.

“The senior housing industry as a whole is strong in Chattanooga,” Ellison says. “Independent living is struggling a little bit because people need to sell their home in order to move into a retirement home. But the healthcare component of senior housing is doing performing well.”

So well, in fact, that there are not many senior living properties on the market in the Chattanooga region. Ellison says most investors are holding their assets and waiting for the market to improve.

Meanwhile, Cornerstone is making aggressive moves to acquire properties. Cornerstone has another Good Neighbor Care facility under contract in Ohio for a yet-undisclosed amount, and in August acquired a 42-bed inpatient rehabilitation facility for $14.75 million in an all-cash transaction.