Lone Star buys Discovery Village portfolio

Dallas-based Lone Star Funds has acquired five Discovery Village senior living communities around the Gulf Coast for $129.73 million, according to property records.

The purchases were part of a 10-property portfolio containing 1,428 units that were sold by Denver-based Healthpeak Properties. In all, Lone Star paid $334 million for the 10 properties.

Healthpeak has been working to shed many of its senior living properties to focus on medical office buildings and life sciences assets.

At the same time, operator Discovery Senior Living announced that it had struck a deal with Lone Star to continue managing the portfolio in Florida, Texas and Georgia.

“We are very excited to be working alongside Discovery Senior Living, a best-in-class seniors housing developer and operator, and believe strongly in the quality of care that Discovery Village offers its residents,” says Jérôme Foulon, a Lone Star senior managing director, in a statement.

“We look forward to the opportunities that our relationship with Discovery Senior Living can unlock over time.”

The sale gives Lone Star ownership of Discovery Village properties in Naples, Fort Myers, Bradenton and Tampa.

Healthpeak paid $128 million for the same Gulf Coast properties in March and April 2019, according to records.

As the COVID-19 pandemic is brought under control, institutional investors in traditional retirement states have stepped up their efforts to acquire senior living communities.

For its part, Lone Star says it “seeks investment opportunities in markets that have suffered an economic and/or banking crisis, resulting in a dislocation in asset pricing and value opportunities,” according to its website.

Since 1995, Lone Star has organized 21 private equity funds containing more than $85 billion in capital, with which it had acquired roughly $223 billion worth of real estate as of the end of September 2020.

Discovery Senior Living, which owns and operates 70 senior communities in 15 states, says its welcomes the Lone Star purchase.

“Lone Star shares our passion for delivering an exceptional lifestyle experience, and together, we’re extremely bullish about the future of this portfolio,” says company CEO Richard J. Hutchinson, in a statement.