HCP Inc., one of the biggest U.S. health-care real estate investment trusts by market value, has bought a Winter Park senior care facility, the second time this month a large investor has purchased an area facility for the elderly.
One consultant said the activity suggests the senior housing market in Central Florida is in play, with investors attracted by all of the construction coming online, the amount of existing facilities and the area's attractiveness for seniors.
HCP of Irvine, Calif., on Nov. 2 paid $11.3 million for ManorCare Nursing & Rehabilitation Center, which offers post hospital care and nursing home services.
The seller was ManorCare of Winter Park, an affiliate of HCR ManorCare, Inc., which is headquartered in Toledo, Ohio. HCP has no ownership relationship with HCR ManorCare.
HCP did sign a master lease with HCR ManorCare through March 2033, with two potential renewals that could take it to 2051.
Word of the sale follows Tuesday's disclosure that Madison Realty Companies of Pasadena, Calif., bought assisted living facility Cornerstone at Longwood for $9.4 million.
HCP and Madison Realty both have a focus on senior facilities, seeing them as strong long-term investments with solid cash flows, the companies have said.
The purchase of ManorCare is just a drop in the bucket for HCP, which likes to go large. Deals have included the acquisition of 133 senior housing communities for $1.73 billion from a joint venture between Emeritus Corp. and Blackstone Group LP two years ago. HCP also bought 338 properties from Carlyle Group's HCR ManorCare Inc. for $6.1 billion.
A spokesman for HCP and the administrator of ManorCare did not return calls seeking comment.
Gary Langendoen, managing director of Madison Realty, told GrowthSpotter that his firm, on the heels of buying the Longwood facility, is shopping for other Central Florida senior care sites.
Senior living facilities are attractive investments because they offer a solid profit, are generally stable and qualify as need driven businesses; something people eventually have to have, said Glen Haddock, chief executive of Haddock & Associates, a senior housing analysis concern.
"It's got a good return on the dollar, which could be 15 percent or more, and is not a speculative investment," Haddock said.
And Central Florida is particularly appealing, given its climate, high percentage of elderly residents and land availability, Haddock said.
"It's a hot market and it is going to draw investors," he said.
ManorCare Nursing & Rehabilitation Center is located at 2075 Loch Lomond Dr. in Winter Park.
The property was built in 1977, has 138 beds, two floors, 39,852 square feet of net living area and sits on 1.57 acres, records from the Orange County Property Appraiser show.
--Bob Moser contributed to this article