Denver-Based Senior Living Developer Confluent Plans $500M Pipeline

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Confluent Development is expanding its presence in senior living despite persistent headwinds facing new development growth as construction starts remain at historic lows.

The Denver, Colorado-based real estate investment and development firm is gearing up for continued growth with a large pipeline, and recently promoted Matt Derrick to managing director of the firm’s senior living development division.

Since joining in 2016, Derrick has led the development team through the completion of $600 million in senior living projects across 14 projects. Under Derrick’s leadership, Confluent is now developing a $500 million pipeline for active adult and senior housing projects. The senior living team identified opportunities with lower-acuity projects like IL and active adult.

Amid this year’s tough inflationary climate and tough capital and lending ecosystem, Confluent Development worked with land owners to temporarily postpone land closings on certain sites, while still retaining control of the properties. Derrick expects those challenges to remain in place for the “rest of 2023 and for at least the first-half of 2024.”

“Sitting on the sidelines is not in our nature, so we are going to be focused on sourcing new, A-plus development sites in great markets. This will put us and our operating partners in a superior position for the anticipated recovery in 2025 and beyond,” Derrick said.

The company has partnered with MorningStar Senior Living and Harbor Retirement Associates (HRA) to handle management of the new communities, having worked with MorningStar on 14 ventures across six states and HRA on nine properties in six states.

“We are currently working with several additional operators in both the senior and active adult spaces and we are excited to share more details on those partnerships and ground breaks in the near future,” Derrick told SHN.

Pipeline Remains Strong

This year, Confluent marked the opening of MorningStar of Mission Viejo in California, HarborChase of Shaker Heights in Ohio and MorningStar at Observatory Park in Colorado, all projects that were started in 2021.

Even amid the tough climate, Confluent has active projects in the works, including: MorningStar Senior Living at The Canyons, which is under construction and is its first joint venture in Nevada and design and entitlements phase for a Kansas City, Kansas-based project with MorningStar.

“With a robust pipeline of more than $500 million, Confluent is poised to add to its growing senior living portfolio,” Derrick said. “That pipeline includes sites that are irreplaceable in high barrier to entry markets, with projects still needing design, entitlements and later construction, something that will take many years aiming to capitalize on demand for senior living in 2026 and 2027 for the pipeline’s projects to open their doors. Our new mantra is: ‘Capital and courage.’ and it is going to take a healthy amount of both to navigate the process.”

With innovation in mind, Confluent Development introduced a “Whole Health Standard” that was implemented at existing communities amid the Covid-19 pandemic, and will guide future development standards as resident safety was considered in greater detail following the pandemic. That means crafting designs that are sustainable, holistic and incorporates the latest protections for resident health while advancing amenities geared for mental health.

With health of the pipeline top of mind, Derrick said he anticipates the company returning to its aggressive development strategy for the anticipated recovery “in 2025 and beyond.” But that doesn’t mean the company is resting on its laurels in the meantime waiting for better market conditions.

“We are and will continue to pursue value-add acquisitions to add to our growing portfolio,” Derrick said. “The near term still looks challenging, but we are confident that the industry’s brightest days are right around the corner.”

 

Source: Senior Housing News

IRA Capital Launches $500M Fund Targeting Senior Housing, Healthcare Real Estate

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Private equity firm IRA Capital has launched a $500 million closed-end fund focused on the acquisition of medical properties and senior housing assets in the U.S.

IRA Healthcare Real Estate Fund will target the acquisition, development and financing of healthcare assets in high barrier-to-entry and supply-constrained markets. The California-based company projects the fund will have annualized net returns of 14% to 16%.

“We intend to acquire assets across the risk spectrum with a focus on core-plus and value-add opportunities,” IRA Capital co-founder Jay Gangwal said in a statement. “The diverse strategy will result in a balanced portfolio with a combination of yield and appreciation, while providing downside protection given the needs-based demand.”

The fund is open to both institutional clients and high net worth investors, including domestic and foreign endowments, pension funds, insurance companies and family offices. Southern California-based IRA’s principals are adding their own capital to the fund, according to the release.

The push to acquire healthcare and senior housing assets comes as the sector slowly recovers from pandemic-era financial challenges, inflationary pressures and decreased occupancy. Overall occupancy at senior housing facilities was around 78% in April, up 5% from pandemic lows but still down from the 87% seen before the global health crisis.

The healthcare sector was at a moment of “peak volatility” in February, according to Spencer Levy, global client strategist and senior economic advisor at CBRE. The near-term uncertainty is being exacerbated by high interest rates, but Levy said an expected peak of rates later this year will present opportunities for buyers as asset values are likely to increase in one to two years.

“The current capital markets environment is also presenting unique re-positioning opportunities that we expect will create significant value and generate outsized returns,” Gangwal said.

 

Source: Bisnow

Orlando Health Opening Two Outpatient Resource Centers

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Orlando Health has opened a new resource center designed specifically to help individuals who may not have access to a primary care physician with their outpatient follow-up needs, Positively Osceola reported Aug. 8.

One of the two centers is already operational, and the other is set to open this fall.

The outpatient resource centers will offer health and wellness services ranging from post-discharge exams, medication management, to care coordination services and disease prevention education.

“Timely follow-up visits are an important bridge between hospital care and continued care post-discharge,” Ashley Dlugokienski, MD, medical director of the Orlando Health Support Team for Aftercare and Resources Outpatient Centers said in a statement. “The centers will help facilitate these crucial appointments, which enable patients to address lingering concerns and reduce the chance of readmission.”

Both outpatient resource center locations will be staffed by advanced practice nurse practitioners, RNs, care coordinators and pharmacists.

 

Source: Becker’s Hospital Review