American Healthcare REIT Inc. (AHR) announced the acquisition of eight Class A senior housing communities for approximately $696 million, establishing a new operating relationship with LCB Senior Living (LCB). The transaction also gives AHR its first meaningful footprint in the Northeast senior housing market and brings LCB into its portfolio of regional operating partners.
AHR’s total year-to-date investments now exceed $2 billion and its awarded investment pipeline stands at approximately $675 million, which it expects to close with match funded equity proceeds from unsettled forward agreements.
Despite having multiple sellers, the 10 communities were marketed together. The acquisitions were executed through a series of transactions over a coordinated six-week process allowing AHR to obtain the eight assets it views as core to its capital allocation strategy, while simultaneously facilitating the acquisition of the other two assets by another leading institutional investor to accommodate the sellers’ desire for a broader portfolio execution.
Subsequent to securing the assets, AHR assigned its purchase and sale agreements for the two non-target communities to the other institutional investor, which acquired them at AHR’s allocated basis for those properties. AHR completed its acquisition of the eight target communities in phases over a three-week process that concluded in early August. The institutional investor completed its acquisition of the two additional communities in late-August.
“This series of transactions is an example of disciplined capital allocation supported by strong execution,” said Jeff Hanson, chairman and chief executive officer. “We understood that only a solution for all 10 communities would clear the market. Rather than either walking away from a highly strategic opportunity, or compromising our capital allocation discipline to secure it, we constructed a solution that required neither.”
In total, the eight communities were built between 2020 and 2022 and comprise 867 units across Massachusetts, Connecticut, New Jersey, Pennsylvania, Delaware and Georgia.
Of the communities that AHR acquired, five were developed and managed by LCB and two were transitioned to LCB from the previous operator upon closing. This Northeast portfolio serves affluent suburban markets where land availability, entitlement complexity and construction economics constrain new supply – among them Westport, Connecticut; Basking Ridge, New Jersey; suburban Boston and Philadelphia’s Main Line.
LCB is based in Norwood, Mass. and develops, owns and operates luxury senior housing communities across New England and the Mid-Atlantic regions.
“We have sought a relationship with LCB for some time, and we have been looking for the right way into these East Coast markets. This gave us both, at scale,” said Gabe Willhite, President and Chief Operating Officer. “LCB is the kind of regional operator we are building AHR around – deep local knowledge, a culture that genuinely prioritizes superior resident care and the ability to develop and manage luxury communities well. Our job is to be the partner of choice for operators like that.”
The portfolio also includes The Holbrook of Sugar Hill in Georgia, developed and managed by Holbrook Life, a luxury senior living provider that combines hospitality-driven service with personalized care and proactive resident wellness programs. Holbrook Life will continue as manager of the community.
Newmark Group Inc. acted as real estate advisor for the transaction.
