Harrison Street JVs on $380M LI Seniors Portfolio

GARDEN CITY, NY-The locally based Engel Burman Group, which developed the Bristal brand of senior housing facilities on Long Island, has entered a joint venture with Harrison Street Real Estate Capital on seven of those facilities in Nassau and Suffolk counties. Valued at approximately $380 million, the acquisition was completed by the Harrison Street Core Property Fund, Chicago-based HSRE's core open ended vehicle, with a combination of equity and the assumption of existing debt from Freddie Mac.

For its part, Engel Burman made a significant equity investment in the JV and will continue to manage the properties, according to a release. HSRE and Engel Burman will also partner on additional opportunities.

Collectively, the seven assets total 1,047 beds, 80% of which are assisted living with the balance dedicated to patients with memory care needs. The newest of the seven, the Bristal at East Northport, opened in 2012 and is already 100% leased. Across the portfolio, residents pay an average of approximately $4,200 per month to rent assisted living units and $5,500 for memory care units.  With the addition of the Bristal portfolio, the HSRE senior housing portfolio includes 68 properties valued at more than $1.3 billion.

HSRE believes it has demographics on its side in capitalizing  on sectors such as senior housing. “The US population continues to age,” says Michael Gordon, principal of the firm and co-head of the transaction group, in a release. “In fact, the 70+ year old population that uses facilities like the Bristal assets is expected to grow by 3.7 million by 2015 and continue to grow.” HSRE's acquisition strategy focuses on private-pay rental properties that serve independent living, assisted living and memory care residents that allow them to age-in-place.  

“This acquisition safeguards our local market share and strategically situates our company for future regional growth utilizing the platform we created in the late 1990s,” says Engel Burman president Jan Burman in a release. “Owning these assets once again while aligning ourselves with a strong institutional partner who shares our vision for growth ensures that the Bristal will remain the benchmark for excellence in assisted living.”