Real estate investment firm Harrison Street in Chicago has purchased a $1.2 billion portfolio of senior housing facilities that includes many in the Valley region.The company plans to sell 14 medical offices for nearly $400 million and buy 24 senior housing properties. The deal spans eight states, multiple sellers and counterparties in what Christopher Merrill, Harrison Street’s chief executive, called “a highly complex series of transactions” in a statement.
The acquisition will give Harrison Street 2,195 senior units in California and Nevada. All 24 of the properties are operated by Irvine-based Oakmont Management Group.Half of the properties, which are owned by Gallaher Cos., are located in Simi Valley, Oxnard, Camarillo and elsewhere in California. The other half of the portfolio, owned by Healthpeak Properties Inc., are located in Santa Clarita, Valencia, Montecito, Huntington Beach, Chino Hills and other locations in California. The properties are four years old on average and had a 96 percent occupancy rate from 2016 to 2019.
Michael Gordon, Harrison Street’s global chief investment officer, said the senior housing sector is poised for growth after remaining resilient throughout the pandemic.
“The assets we are acquiring are managed by a leading operator in Oakmont and located in attractive markets backed by solid demographics, high barriers to entry and historically high occupancy rates,” he added in a statement.According to Senior Housing News, the acquisition of the portfolio is occurring throughout various stages. Harrison Street has had 16 communities turned over to it so far, and the remaining eight will be officially acquired at another date.As for the medical office properties, Harrison Street will sell the 14-property portfolio to Healthpeak Properties for $371 million. The properties total to 833,000 square feet and are located in California, Oregon, Texas, Illinois, Minnesota, New Jersey and Virginia.
Since Harrison Street’s inception in 2005, it has closed 552 assets for a total cost of $19.5 billion in the health care sector.