Kayne Anderson Real Estate has paid $39 million, or $165,958/bed, for the 235-bed Casa Sandoval assisted-living facility in Hayward, Calif.
The Los Angeles investment manager bought the property, at 1200 Russell Way, from an affiliate of Casa Care LLC, a Hayward developer of senior-living communities.
The property was constructed in 1990 and offers independent-living, assisted-living and memory-care units. It’s in the East Bay of Northern California, near Hayward Japanese Gardens in De Anza Park.
The transaction was completed through Faris Lee Investment’s recently launched Senior Living and Hospitality Group, one of six new business groups created by the Irvine, Calif., firm as part of an expansion of its services.
Faris Lee for the past 22 years has focused primarily on advising clients on retail investments and transactions.
It has divided its resources into six groups – single tenant properties, anchored retail properties, mid-market investments, private capital acquisition, capital markets and the senior living and hospitality industry, explained Richard Chichester, the company’s president and chief executive.
“By breaking these out, we can underwrite to those unique qualities,” he said. “Characteristics of properties and clients are uniquely different.”
“The reason we added senior care is that retail is hyper specific to its location,” Chichester said. “Its location matters more than any other commercial real estate. The retail center usually occupies the best retail in the community, and the larger retail sites are going through some repositioning. Many of them have excess land available, and now is the ideal opportunity to use that excess land to develop senior care, now that the Baby Boomer population is retiring and creating huge demand.”
Faris Lee solidified the expansion with a 40 percent increase of staff in the last year, Chichester said, recently capped with a round of new hires. Phil Ramming joined the company’s national anchored retail-investment group as senior managing director to focus on strengthening and creating new relationships with family offices, regional owner/operators, developers and select private and institutional investors nationally. He previously was with Sabal Financial Group.
Kirt Boultinghouse, who has some 20 years of experience, including at Trammell Crow and Donahue Schriber, was named senior managing director of Faris Lee’s capital markets group. He is charged with building new and existing equity relationships, as well as representing sponsors with local and national capital requirements.
Tyler Strauss, who previously was with CBRE Capital Markets, was hired as associate with the single tenant investment group, working on the acquisition and disposition of single-tenant, net-leased investments, as well as national portfolios and sale-leaseback deals nationwide.
Hunter Steffien, who previously handled franchise development for a fast-foot chain, also joined the single tenant group as a director, specializing in single-tenant, net-leased investments in the restaurant industry nationwide.
Finally, Nick Miller joined the national private acquisition advisory group as a director specializing in buyer representation for all retail asset classes. Miller manages all 1031 exchange requirements with investors and others in the brokerage industry.
As part of its expansion, Faris Lee has also become a sales partner with X Team Retail Advisors, a national platform specializing in the retail market that has partnerships with 36 firms across 40 markets, totaling 350 brokers sharing insights and local market expertise.
Faris Lee’s expansion comes at a time when the retail industry is evolving to meet the needs of the new consumer, Chichester said. It’s not a new obstacle for the industry, which has weathered changing trends several times.
“Retail has always been dynamic and fluid,” Chichester said. “Consumers have different habits and expectations today. In the ’60s and ’70s, malls were the new things, where the community congregated. The new generation is saying no to malls, they don’t want to shop there.”
Online shopping has claimed several long running brick-and-mortar chains, but the industry is looking for a balance of the two, Chichester said. A cross-channel relationship will create a harmonized retail experience, where the shopper researches and orders a product online, goes to the store to pick it up and buys a few more items.
“Here’s what’s important to understand,” Chichester said. “Amazon is moving as fast as it can to bricks and mortar because they understand the physical store captures the consumer’s five senses. It creates a higher probability that he or she will buy other items, as opposed to purchasing a single item online.”