A new real estate investment trust (REIT) specializing in student and senior housing is undertaking an initial public offering (IPO), offering up to $1 billion in shares.
The newly organized Maryland REIT, Strategic Student & Senior Housing Trust, is sponsored by SmartStop Asset Management, a diversified real estate company that has focused primarily on on self storage properties. SmartStop, a newcomer to senior housing, has $1.5 billion of real estate assets under management, including 111 self storage facilities in the U.S. and in Toronto, Canada.
Shares would be priced between $9.40 and $10.33, according to public filings with the Securities and Exchange Commission (SEC).
The company commenced a private offering of up to $100 million in shares last year. As of Dec. 31, 2017, Strategic Student & Senior Housing Trust had raised about $75.6 million.
Last month, the REIT closed on a deal to buy a portfolio of three assisted living communities in the Salt Lake City area from MBK Senior Living for an aggregate purchase price of $78.5 million. Each of those properties is currently managed by an affiliate of MBK, and the REIT does not intend to directly manage or operate any of its senior housing assets.
“The acquisition of the Salt Lake City assisted living portfolio provides Strategic Student & Senior Housing Trust with three established senior housing properties, each with full amenities packages,” said John Strockis, chief investment officer for SmartStop, in a statement about the acquisition. “Additionally, this acquisition marks SmartStop’s entry into the senior housing space, an emerging asset class.”
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Moving forward, Strategic Student & Senior Housing Trust will seek to acquire class “A” independent living, assisted living, memory care and continuing care retirement communities (CCRCs), which are defined as amenity-rich properties built or heavily renovated within the last 10 to 20 years in favorable demographic markets with high barriers to entry.
The REIT owns five student housing properties in total, including near the University of Arkansas in Fayetteville, Arkansas and Florida State University in Tallahassee, Florida.
The public offering comes at a time when many senior housing REITs are battening down the hatches in the face of new federal legislation, pending asset sales and uncertainties in various health care sectors.
Strategic Student & Senior Housing Trust declined to comment for this story, as it is in an SEC-mandated quiet period.
Written by Tim Regan