The Deal
When this Project was presented to Linda in the summer of 2015; the construction was underway. The property was acquired. There were two Single Family Houses that were purchased by the Investor. While we not involved in the acquisition-the Investor came to Linda Gerchick to figure out what the Property was worth with the TWO individual side by side buildings.
The Investor had the plans for the gut and remodeled designed and built specifically for an assisted care facility. When Linda came into the picture the construction was at framing. Please see the drawing and the Architectural Renderings. The Investor had little experience in the actual market but had a location and buildings that were ideal for the intended use.
The Market Evaluation and Listing Process
In the evaluation for a market price on the assisted care; Linda did a market survey of operating assisted care in the Phoenix area. Additionally, as Linda is a CCIM she reached out Nationally to other CCIMs across the Nation for feedback on both the market and the future of the industry of Assisted Living Facilities. As this was a vacant asset; projections were the best way to ascertain a market price. Many times Commercial Properties as sold on a cashflow basis.
Once the Seller was comfortable with the Listing Price; marketing started. As this was a vacant property; Linda and her Team arranged an “open house”. This opening was marketed heavily to commercial agents in the Assisted Care arena. It was well attended.
The property was toured from local investors to Commercial Agents and even European Foreign investors. The day of the open house final touch-ups were still being completed by the contractor, Linda grabbed a broom and a bottle of Windex and jumped in.
March 2014
Acquisition Date
$440,000
Acquisition Price
$650,000
Project Budget
March 2016
Disposition Date
$1,475,000
Disposition Price
The Buyer-The Partership
One of the benefits of working with Gerchick Real Estate is the ability to see projects to fruition. As Linda became more and more convinced that Assisted Care is one of the best assets for an Investor; she was convinced that the path was to form a partnership to buy the facility, stabilize the investment and allow her investors the opportunity to own Assisted Care.
The partnership was formed in February of 2016 and this partnership bought the Bethany Assisted Care project. Linda’s Investors value her leadership and as such Linda is one of the managing members of the Partnership. She is still involved after the closing, very typical of the Team’s philosophy.
Take a look at the many photos below to see this lovely project.
Linda continues to work in the Senior Housing market and often has some unbelievable opportunities.
Opening the Assisted Care Facility
The opening of the Facility took a bit of time but the Assisted Care License was issued and tenants have been acquired. The Purchase really was two separately properties. With this is mind when the partnership closed on the Property; the guidelines for the City of Phoenix had changed or the better. Previously no one could have more than a 5 bed facility next to a ten bed. Currently, the City will allow you to have ten beds next to each other. Since there was an extra bedroom in the five bed facility; the decision was made to install the fire sprinkler system in the smaller of the buildings. This would allow additional income to the Partnership.
The Property was furnished and is currently being occupied ahead of projections and at a bed rate higher that projections.
Project Photos
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Triplex in North Phoenix-Completed