News Sep 26, 2018

Arcapita Grows US Senior Living Portfolio to $350 Million with Chicago Acquisition

  • Arcapita has completed eight transactions worth $1.8 billion in the senior living sector
  • Number of US seniors aged 75+ expected to double and hit 40 million by 2035

MANAMA, Bahrain, 26 September 2018 – Arcapita, a leading alternative investments firm with a track record of 80 transactions exceeding a total of $30 billion in value, has acquired a portfolio of senior living properties in Chicago, Illinois, bringing the firm’s total assets under management in the sector to $350 million.

The transaction comes as Arcapita, which has been operating in the US since 1998, strengthens its market presence by moving to a new office in Atlanta and bolstering its US team with highly experienced real estate and private equity investment professionals.

The Chicago portfolio comprises two premium continuing care retirement communities with approximately 1100 units and is operated by Senior Care Development and Life Care Services; the second largest senior housing manager in the US with 130 communities across 32 states.

It is Arcapita’s third senior living acquisition over the last 30 months, taking it to a total of eight transactions in the sector worth $1.8 billion. Arcapita has previously acquired six senior living communities with over 500 units in Washington D.C., Atlanta, Denver and Colorado Springs, and is a continuation of the firm’s strategy of targeting quality housing assets in districts with affluent seniors across the US.

Atif A. Abdulmalik, Arcapita’s Chief Executive Officer, said: “We have a strong track record in the sector, having previously managed and successfully exited five senior living portfolios, comprising over 70 properties in the US and UK, which delivered double-digit IRRs to our investors.

“The senior living sector is poised to experience outsized growth and is expected to continue to outperform the broader real estate market in the US. We intend to capitalize on the sector’s performance to deliver a strong yield and attractive returns for our investors.”

Martin Tan, Arcapita’s Chief Investment Officer, added: “The demand for senior housing facilities in the US is underpinned by robust fundamentals. The 75 and over demographic is expected to double from 20 to over 40 million during the next two decades as the baby boomer generation reaches retirement age, and the supply of quality facilities remains limited.

“We are delighted to have acquired these assets. Both communities enjoy strong occupancies due to their strategic locations and offer continuum of care services which allow residents to age in the community. The properties are run by a seasoned senior housing manager with decades of industry experience and are anchored by significant demand from a sizeable and affluent senior population within their vicinity.”