5 PE deals that lit up the senior market

Bain Capital, Growth Catalyst Partners and Fortress were among the top buyout shops that made significant strides in this space this year.

With 10,000 baby boomers a day turning 65 in the US, coupled with Census Bureau data showing that the number of seniors 65 and over is expected to outnumber children for the first time by 2034, it’s no surprise that private equity has been especially bullish about the aging sector in the US. From senior housing to healthtech services, PE Hub has noticed a flurry of notable deals in this market. In chronological order, here are five that caught our eye.

1. Bain Capital Real Estate and Capitol Seniors Housing buy Northstar Georgetown

This year kicked off with Bain Capital Real Estate and Capitol Seniors Housing scooping up Northstar Georgetown, a newly constructed 55-and-over adult community based in the greater Austin, Texas, area, for an undisclosed sum.

For both Bain Capital and Capitol Seniors, the allure here was not simply the economic benefits caused by a groundswell in the senior population or “silver tsunami,” but that the market is recession-resistant.

“The active adult, 55-plus sector continues to be a resilient, safe, value-driven investment and we’re glad to have Bain Capital Real Estate as a long-term partner on acquisitions in this sector,” said Michael Hartman, a principal at Capitol Seniors Housing.

2. Green Courte Partners acquires three senior communities in the Oklahoma metro area

In March, Green Courte Partners made headway in the elderly space by acquiring three active adult senior cottage communities in the Oklahoma metropolitan area: Chateaux at Mon Abri, Laurel Springs and Grace Pointe Living. Filling a need in an ever-growing demographic was the draw here for the Chicago-based private equity real estate firm. Another lure was the growth potential of the properties.

Said Matt Pyzyk, managing director of acquisitions at GCP, “We are increasingly attracted to this transitional subset of the active-adult/senior housing sector based on our positive experience operating the cottage component of our existing portfolio, which is continually almost 100 percent occupied.”

3. Growth Catalyst Partners debuts new senior assistance platform SilverAssist

In June, mid-market PE firm Growth Catalyst Partners teamed up with digital media and tech executive Greg Mason to form SilverAssist, a senior assistance platform. Fusing technology and healthcare, SilverAssist acts as a concierge service for seniors. It also addresses a massive market opportunity, created by the aging baby boom generation and increased life expectancy, noted James McNally, managing director of GCP.

“Our team has done extensive research into the growing eldercare market and pinpointed a significant market gap that SilverAssist will address,” he explained. “We are thrilled to partner with a seasoned leadership team who has already shown immense passion and dedication to our vision and roadmap which is filled with acquisitions and organic growth plans.”

4. Lee Equity and Coastwood Senior Housing Partners invest in Discovery Senior Living

Fall kicked off in high gear when Lee Equity Partners and Coastwood Senior Housing Partners agreed to invest in Southwest Florida-based senior housing operator Discovery Senior Living. When discussing the enticements for the transaction, New York City-based mid-market buyout shop Lee Equity cited Discovery’s growth and consolidation opportunities as evidenced by its portfolio of more than 110 communities in 19 states.

Said Yoo Jin Kim, a partner at Lee Equity, “Discovery Senior Living represents the ideal platform to build a leading national senior living operator due to the strength of its team, centralized services, and national and regional brand operating structure.”

5. Oxford Capital and Fortress snap up a portfolio of three senior housing properties

Coming on the heels of this deal was yet another intriguing housing acquisition: Oxford Capital and Fortress Investment Group bought Sequim, Washington-based Sherwood Portfolio, which is comprised of three senior housing properties. As part of the transaction, Oxford and Fortress will pour over $8 million into the properties for enhancements and to expand its assisted living/memory care offerings.

Fortress Managing Director Peter Stone hailed the properties’ significant valuation and operational upside potential – both boons in a possible economic downturn.

“This transaction builds further on our strategy of acquiring senior housing assets with scale in attractive demographic areas that are well-positioned to weather an inflationary environment,” he said when the deal was announced.

With the growth in this sector expected to soar in the coming months and years, a likely recession notwithstanding, PE Hub expects the deal volume in this area to continue to flow unabated.