Acquisitions are originated in various ways. Key management’s network of industry contacts,
acquired over the course of many years in senior housing, supply a majority
of the potential acquisitions AREI reviews. This gives us the advantage of often reviewing new properties on
the market before the listing is common knowledge. Equally important are referrals from the nation’s top senior-housing
brokers providing information on listings they believe may be of interest.
A major criteria ARI looks for when reviewing new acquisitions
is the investment’s upside potential. Properties which have yet to stabilize can present an opportunity
for a significant upside for investors. Properties
experiencing a large decline in occupancy also create the opportunity for upside
potential. ARI also analyzes facilities
which have been poorly managed
with the upside of increasing proficiency in management of
a facility. ARI only reviews facilities
which meet the minimum size requirements of 40 units and prefers larger facilities.
The facilities must be attractive and architecturally sound.
Financing associated with the acquisition can also be a deciding factor
as to whether or not ARI proceeds with a purchase.
ARI’s acquisition team performs an initial analysis of potential
acquisitions. Factored into the analysis
are market criteria, operating assumptions, financing expectations and other
data. After initial analysis, the acquisitions
department
presents acceptable projects to the
executive committee. Upon preliminary
approval of the committee, analysis is conducted in greater detail to explore
different possibilities for financing, operating results, occupancy, and various
other factors. A site visit and the
results of in-depth analysis determine whether the project goes forward and
how management proceeds into contract, due diligence and transitioning to new
ownership.
