Assisted living residence with renovation potential attracts REIT

Case Study

Challenge: Located in the heart of Tampa in Hillsborough County, FL, Hanna Oaks is an 88-unit, 135-bed assisted living residence that included 20 units and 40 beds dedicated to memory care. The 41,148-square-foot property was built in 1987 and is situated on more than two acres. In previous years, the residence was stabilized at an occupancy rate of 88%. The seller was unable to be hands-on at the facility, and consequently the occupancy level dropped to 46%.

Strategy: A decision was made to present this opportunity to a smaller buyer pool, which needed to include buyers whose business plans would be flexible enough to see the value-add opportunity and who would have the foresight to develop a business plan to reposition the residence by increasing the memory care component. The residence was cross-collateralized with several other properties owned by the seller. In addition, we needed to strategize in developing a dialogue with the lender holding the collateralized note.

Result: Within our target market, we found a private REIT that envisioned renovating the facility. The note holder was engaged over the course of the due diligence period and finally arrived at a solution to release the lien to allow the closing. This acquisition provided the buyer with the opportunity to enter the Florida seniors housing marketplace.