Source: Madison Realty Companies / #Senior #Housing
PHOENIX, AZ - Madison Realty Companies, a private real estate firm sponsoring alternative investment offerings, purchased two senior care facilities in Arizona's metro Phoenix area for $14.8 million on behalf of Delaware Statutory Trust investors last month.
"Our niche is buying properties smaller than the REITs have historically acquired," said Madison Realty's principal and co-manager, Gary Langendoen. "We aim to provide higher than REIT returns while offering potential upside through operating efficiency, expansion, conversion, or a combination of the three."
Madison's business model is to increase the levels of care to add value to the properties over time. Built in 2013 and 2011, the Mesa and Apache Junction properties are in excellent condition with room for growth in ancillary services and staff training. Co-manager Matthew Arnold, who works alongside Mr. Langendoen spearheading management and operational improvements at the newly acquired properties, comments on the local market, "Phoenix is a large retirement area and our target constituents are retirees who are now in their 80's and need assistance with their everyday activities."
The properties, which together serve as the company's second DST offering this year, have a loan-to-value ratio of 41.9% with 25-year amortization and a fixed rate of 4.75% for a 7-year, no interest-only term.
Madison Realty Companies is a full service real estate investment management company founded more than 20 years ago. It currently owns and manages 24 senior living properties, six of which have been acquired in the last eight months alone.