CT assisted-living firm taps up to $1.8B in capital

Aug. 1--An investor of Benchmark Senior Living has cashed out its shares for $1.8 billion, much of which will be reinvested in improvements for existing assisted-living communities with the Massachusetts-based company managing 16 in Connecticut from Stamford to Mystic.

Benchmark is based in Waltham, Mass., with the company privately held and not disclosing immediately the identity of its new investor. Founder Tom Grape grew up in Fairfield, where last November Benchmark opened the Sturges Ridge at Fairfield community.

The selling shareholder is Welltower, a Toledo, Ohio-based company that last year was the second largest owner of senior housing in the country with more than 65,000 units at year end, according to the American Seniors Housing Association.

The senior housing sector is fresh off a boom year for acquisitions, with more than 425 deals in 2018. That shattered the previous record of 365 deals in 2015, and last year the senior housing sector saw a record number of acquisitions, according to Irving Levin Associates, a Norwalk firm that tracks merger activity across the health-care sector.

According to a separate report by CBRE, senior living communities generated a 14 percent total return on investment over the past five years, well above returns of less than 10 percent for apartment complexes and other types of commercial real estate.

Both Grape and Welltower CEO Tom DeRosa have spoken at recent forums on the need for investors to create a profitable model to spur the construction or conversion of more senior communities priced for people of middle income, who cannot afford the upscale communities that have been built in southwestern Connecticut in the current economic cycle.

A Welltower predecessor company first invested in Benchmark Senior Living in 2011, at the time taking an $890 million stake in 34 communities and adding more in 2015 to build a portfolio of 48 centers totaling more than 4,100 residential units.

In the first quarter of 2019, Welltower reported net operating income of $25 million from the 48 Benchmark communities it is divesting, working out to an average of about $520,000 for each over the three-month period.

Benchmark operates 58 communities in all, with four more under construction. In conjunction with the Welltower divestment, Benchmark extinguished $24 million in debt, and is pledging to invest "significant capital" in its words into improvements at its properties.

In the past several years, Benchmark has made major investments in southwestern Connecticut, including the addition of a wing at Edgehill in Stamford for the care of residents with Alzheimer's disease and other upgrades at a $20 million total investment.

Edgehill marked in July the 20th anniversary of its opening, noting it recently welcomed its first resident from the baby boomer generation who attended Woodstock.

The company's other area communities include those carrying the Benchmark Senior Living name in Hamden, Ridgefield, and Shelton; as well as Carriage Green at Milford, Coachman Square at Woodbridge, Middlebrook Farms at Trumbull, The Village at Brookfield Common, and The Village at Mariner's Point in East Haven.

Elsewhere in Connecticut, Benchmark has communities in Avon, Meriden, Middletown, Mystic, Niantic, Rocky Hill, South Windsor and Waterbury.

As of the end of June, Welltower had investments in nearly 1,500 senior communities nationally, including Sunrise Senior Living which has a Stamford facility and is adding two more in Fairfield and Wilton.

Alex.Soule@scni.com; 203-842-2545; @casoulman

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