A different kind of investor has jumped into the seniors housing market. A big health system is now an equity partner in new developments—a sign that care collaboration is quickly moving into its next, and more deeply connected, phase.
In the first deal of its kind, Houston-based Belmont Village Senior Living and Baptist Health South Florida, a nonprofit provider, recently announced a joint venture partnership to develop, own and operate senior living communities in the greater Miami area.
“This is very unusual,” said Patricia Will, founder and CEO at Belmont. “We’ve had strategic alliances with health systems, but never where the healthcare system is also the institutional investor.”
The joint venture’s first project will be a high-rise in Coral Gables, near the Shops at Merrick Park, an upscale development with restaurants and other amenities within walking distance.
Belmont Village Coral Gables will have about 200 apartments with independent, assisted living and memory care units. The building’s design is currently being finalized. Construction is slated to begin later next year, with completion expected in late 2022.
Another Belmont project is already underway in Ft. Lauderdale. The 12-story building has 204 apartments for independent living, assisted living and memory care. Harrison Street Real Estate Capital, of Chicago, is Belmont’s equity partner in the project.
Belmont currently owns and operates 29 buildings across seven states. It also has a property in Mexico City, and one under construction in Chicago’s upscale Lincoln Park neighborhood.
Belmont entered the South Florida market with a strategy to create a cluster of communities, similar to the way the company has expanded in Los Angeles, Chicago and San Diego, said Will.
A good match
“Baptist Health is the perfect partner,” said Will, noting that the organization is a dominant healthcare provider in South Florida. Baptist Health operates 10 hospitals, 50 outpatient and urgent care clinics, and more than 50 physician groups in Broward, Miami-Dade, Monroe and Palm Beach counties.
Baptist Health had been considering a seniors housing venture for several years, said Will. The investment bank HFF advised Baptist Health and helped to conduct a search for a seniors housing partner, eventually settling on Belmont as co-owner, developer and operator.
“We believe the future will be about care collaboration,” said Will. “Our focus is on wellness, prevention, early intervention and innovation.” She adds that the joint venture with Baptist Health reflects a shift in thinking about seniors housing. Rather than a siloed sector, it is becoming one that covers the whole healthcare spectrum.
Experts expect strategic alliances between seniors housing providers and healthcare systems to continue to grow. The big healthcare REIT Welltower last year formed a joint venture with ProMedica, a nonprofit health system to acquire the portfolio of properties formerly operated by HCR ManorCare.
Forming alliances with healthcare institutions is nothing new for Belmont, noted Will. The company’s project in Mexico City is connected via sky bridge to a hospital, providing easy access to physicians and services. Belmont’s original, flagship project in Houston has an alliance with the big rehab and research hospital, TIRR Memorial Hermann.
The details of how healthcare services will be integrated into the new Belmont community in Coral Gables are under development. The intent is to change the paradigm for senior wellness in this and every project under consideration. The company is looking at a number of sites in the greater South Florida area, from Palm Beach to Miami, for new communities.
Looking ahead, Medicare Advantage may be a part of the equation. “We are focused on bringing more value to the customer,” said Will. “We want to provide the kind of quality services so residents don’t just live a long time, but live well for a long time.”
Reflecting on the state of the seniors housing industry, Will said, “We’re at an interesting inflection point.” Residential developers are entering the space with active adult-type developments that focus on lifestyle. At the other end of the spectrum, healthcare providers and institutions are building communities. “Our joint venture with Baptist Health is a cross between the two,” said Will. “We will have great hospitality, and also the opportunity to improve the lives of our residents through care collaboration.”
May 5, 2019