Aging Baby Boomers Draw $1 Billion Bet on High-End Senior Living
BDT & MSD Partners acquired a majority stake in Sunrise Senior Living for more than $1 billion, with senior leadership retaining the remainder. Sunrise, the fifth-largest senior-housing operator in North America, runs more than 230 communities across the U.S. and Canada serving over 22,000 residents. Canada’s Public Sector Pension Investment Board sold its stake in what marks one of the largest senior-housing transactions since the pandemic.
Sunrise targets the upper end of the market with assisted-living rates around $10,000 monthly, before care add-ons. Most communities run above 90% occupancy with wait lists at many locations. BDT & MSD, which manages capital for Michael Dell’s family and other investors, brings hospitality experience from stakes in Four Seasons Hualalai, The Boca Raton, and Auberge Collection. The buyer plans to combine that luxury-hotel expertise with Sunrise’s care operations to win management contracts.
Sunrise owns fewer than a quarter of its properties and earns fees managing the rest. The company maintained its development team through the downturn and now controls a pipeline of more than 50 communities with an estimated construction cost of $7.5 billion. Sunrise expects to start six to seven communities annually, rising to 10 by 2030.
Senior-housing occupancy in 31 major metros reached 90.4% in the third quarter, a post-pandemic high, according to NIC MAP. Assisted-living occupancy hit 89.1%, up from below 74% at the pandemic low. NIC MAP projected in August that the U.S. could face a shortage of more than 575,000 senior-housing units by 2030 as the population age 80 and older grows by roughly one-third.
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