By Jon Peterson
Washington, D.C.-based Capital Seniors Housing has acquired the 93-unit Queen Anne Manor property in Seattle at a 6.25 percent cap rate. “This return is based on the current rental income that the property is producing,” says Ryan Maconachy, a senior managing director with HFF in the Dallas office. HFF worked on both the sale of the property for the seller and arranged debt financing for the buyer. The others involved were Chad Lavender, senior manager director, and Sarah Baccich, associate director.
The asset had been owned by a private owner. “The seller believed that the timing was right to sell this property. It had owned the property since 2007. The asset had been renovated last year,” said Maconachy.
“The interest was fueled by the fact that this is a class A property is located in a strong and mature market.”
Capital Seniors did not respond to a phone call seeking comment for this story. The buyer paid $36.25 million for the property. The manager of the property going forward will be Vancouver-based Milestone Retirement Communities.
This property was bought free and clear of any existing debt. The asset is located on 100 Crockett Street, which is roughly four miles north of downtown near the Lake Union waterfront. At the time of the sale the property was 96 percent occupied. The complex has 54 assisted living units and 39 memory care units. This senior housing property has units that average 294 square feet each.
HFF sees that the Queen Anne submarket is a strong one for senior housing in Seattle. “This is a market with very high barriers to entry. It’s one that is very difficult to add new product into so it makes the existing assets that more attractive to own,” said Maconachy.
HFF was responsible for arranging the $25 million of new debt placed onto the property. The company sees that there were several factors that made this property attractive to lenders. “The interest was fueled by the fact that this is a class A property is located in a strong and mature market, and the asset was bought by a very strong owner who has a lot of experience with the property type,” said Maconachy.
The source of the loan was Freddie Mac’s CME Program. The debt was structured as a seven-year floating rate loan.
Capital Seniors Housing is a national known investor of senior housing properties. The company currently owns 18 operational assets and has 12 more properties under development. It’s total assets under management are $750 million. The company is a joint venture operating partner with The Carlyle Group, a private equity real estate manager of commingled funds.