Aegis Living CEO Dwayne Clark

Aegis Living and senior housing private equity investor Blue Moon Capital Partners entered a second joint venture Tuesday with the acquisition of 10 communities across California, Washington and Nevada from real estate investment trust Healthpeak Properties. 

As the largest deal in Aegis Living’s 24-year history, the acquisition includes more than $350 million in senior living real estate and supports the company’s shifting strategy to owning its communities and growing rapidly over the next 10 years, Aegis said in a statement. The transaction also advances Healthpeak’s goal of unloading much of its senior housing operator portfolio and triple-net lease assets.

The 702-unit portfolio consists of assisted living and memory care apartments, all in urban, high-barrier-to-entry markets with attractive demographics and limited existing supply. Aegis Living previously operated these communities under a lease. With Tuesday’s announcement, Aegis now has ownership in more than 70% of its 32 communities.

“At a time when we are seeing many operators and traditional senior living investors leave the market, we are leaning in,” Aegis Living President Kris Engskov said in a statement. “The challenges presented by COVID-19 have made clear just how critical senior care is and will increasingly become. We have learned a great deal during the pandemic and look forward to putting many of those lessons to work to keep even more seniors safer, happier, more purpose-driven and more engaged than ever as we continue to grow.” 

In 2018, Aegis Living and Blue Moon established its first joint venture agreement that included the acquisition of three Class A assisted living and memory care properties in Bellevue and Kirkland, WA, and Aptos, CA. 

The 10 properties in this second joint venture include:

  • Aegis Living Callahan House in Shoreline, WA
  • Aegis Living Shoreline in Shoreline, WA
  • Aegis Living Kirkland in Kirkland, WA
  • Aegis Living Las Vegas in Las Vegas
  • Aegis Living Dana Point in Dana Point, CA
  • Aegis Gardens Fremont in Fremont, CA
  • Aegis Living Granada Hills in Granada Hills, CA
  • Aegis Living San Francisco in San Francisco 
  • Aegis Living Pleasant Hill in Pleasant Hill, CA
  • Aegis Living Ventura in Ventura, CA

The Bellevue, WA-based operator also has eight additional communities in development.

“The future of the senior living industry has never been stronger and those with a robust owner-operator presence will be best positioned to meet the growing demands for high-quality senior assisted living and memory care,” Dwayne Clark, Aegis Living founder, CEO and chairman said in a statement. “We are just getting started on our plans to double in size by 2030.” 

Even amid the COVID-19 pandemic, favorable senior demographics, combined with a significant supply decline begun last year, has allowed Blue Moon to remain confident in the seniors housing industry, and in Aegis Living in particular, Kathryn Sweeney, co-founder and managing partner at Blue Moon, told the McKnight’s Business Daily.

“We firmly believe occupancies and rents will improve, creating profit streams surpassing pre-pandemic levels,” she said. “As a high-quality operator, Aegis Living is positioned to capture increased market share as their attention to resident needs, medical relationships and innovative culture are demonstrated in each of the markets where they operate.”

PGIM Real Estate also help arrange a $222 million Fannie Mae credit facility on behalf of the partnership for the portfolio.

“In addition to the best-in-class sponsorship, the portfolio has a long and proven track record of high performance and the assets are located in supply constrained, geographically diverse markets,” noted Trace Wilson, executive director at PGIM Real Estate who originated the loan on the firm’s behalf.