The Blackstone Group has formed a joint venture with Seattle-based Emeritus Corporation, which owns and operates living and care facilities for senior citizens, to acquire 25 assistedliving facilities and one skilled nursing facility for $190 million (€152 million).
Emeritus, which houses 18,400 residents in 182 communities across 35 states, will acquire a 19 percent interest in the venture for $7 million and take five percent of the portfolio’s revenue as its management fee. The joint venture agreement also provides Emeritus the option of purchasing the properties in the future.
Prices have been on the rise as private equity real estate firms and other investors increase their activity in the senior housing sector, something that is expected to continue as baby boomers in the US continue to gray over the coming years.
Some firms have even set up separate vehicles to invest in senior housing. NorthStar Realty Finance and Chain Bridge Capital formed a joint venture called Wake Field Capital earlier this year.
In one of the largest transactions in the sector, alternatives firm Fortress Investment Group pumped $1.3 billion into Brookdale Senior Living’s acquisition of American Retirement Corporation, making that firm the largest senior living operation in the US.