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Senior Living Facilities Continue to Change Hands as Healthpeak Sells Two Sunrise Communities for ~$28MM

Healthpeak, Brookfield, Aegis Living, Blue Moon, Cephas Partners, Sunrise of Edmonds, Sunrise of Mercer Island, Edmonds, Mercer Island
Courtesy of Sunrise of Edmonds

By Meghan Hall

In the spring of 2020, Seattle’s senior living communities made headlines as the source of the nation’s first COVID-19 outbreak. Now, they are back in the headlines as senior living operators around the region sell off their assets—often through multiple deals at a time. In two transactions that closed mid-January, but only recently recorded, Healthpeak Properties sold its Sunrise of Edmonds and Sunrise of Mercer Island communities for about $28 million. The buyer, based on information from public records, is an entity affiliated with Brookfield Properties.

The larger of the two transactions was for Sunrise of Edmonds. Brookfield paid $20,317,595 for the asset located at 750 Edmonds Way. The community provides both assisted living and Alzheimer’s and memory care. Assessor’s parcel data indicates the community totals 174 units and sits on 1.56 acres. Services include social and education programs, group trips and fitness activities. 

“Sunrise of Edmonds is the epitome of safe, warm and inviting senior living, with a team that genuinely enjoys what they do and treats each resident with respect and dignity,” the community’s website states. “Our top-quality assisted living in Edmonds, WA, starts with a beautifully maintained exterior, including walking paths, gardens, beautiful landscaping and a covered veranda.”

In the second transaction, Sunrise of Mercer Island sold for $7,387,011. The community is smaller, with about 50 units, and the retirement facility was originally constructed in 1990. Located at 2959 76th Ave. SE, Sunrise of Mercer Island offers coordination of hospice care in addition to assisted living and memory services. The community features suites for residents and community spaces such as a wraparound porch, dining room and bistro.

In all, there are eight Sunrise Senior Living communities within the Seattle region. As of this writing, only Sunrise of Edmonds and Sunrise of Mercer Island have sold. The remaining six assets are located across the region in markets such as Redmond, Bothell and Lynnwood. 

In recent months, the communities are far from the only two senior living assets that have sold. Prior to the end of 2020, Healthpeak sold two other assets, Aegis Living Callahan House and Aegis Living Shoreline, for a combined $132.5 million. The buyer was affiliated with Cephas Partners.

Earlier this year, Aegis Living and Blue Moon Communities acquired 10 senior living communities—including three in Washington—for more than $350 million. The deal was the largest in Aegis Living’s history.

In September of 2020, Seattle-based Merrill Gardens closed on a similarly-sized deal, buying out its joint venture partner, Ohio-based Healthcare REIT Welltower, for $344.7 million. Spread across four separate transactions, Merrill Gardens acquired full ownership for its 184-unit Gardens at Renton Centre for $114.111 million, as well as its 123-unit University Village community for $116.1 million. For Merrill Gardens Kirkland and Tacoma, the firm paid $68 million and $45.5 million, respectively.

Those who are betting on the senior living market believe that growing demographics in the Seattle region and increasing numbers of retirees will help boost the asset class in years to come—even though COVID-19 has disproportionately impacted senior communities, and operators are leaving the market.

“At a time when we are seeing many operators and traditional senior living investors leave the market, we are leaning in,” said Aegis Living President Kris Engskov in a statement upon announcing its joint venture with Blue Moon. “The challenges presented by COVID-19 have made clear just how critical senior care is and will increasingly become. We have learned a great deal during the pandemic and look forward to putting many of those lessons to work to keep even more seniors safer, happier, more purpose-driven and more engaged than ever as we continue to grow.”