Gallo Affiliated LLC are seeking to acquire an $85,000,000.00 Packaged Assisted Living Portfolio Investment: "The Bridgewater Portfolio."
Seeking $10,000,000 in Gap Financing as Down Payment to Existing Bond Indebtedness of $28,500,000, payable at 5.4% interest and amortized to 2036 no prepay after 2024 & preliminary loan commitment.
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Contract in a place possessing of a Blended Capitalization Rate at 8.378%
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Current Revenue on 398 beds as of 03/31/24
Price for The Portfolio: $85,000,000
Current Gross Rev : $17,079,110
Annual Net Operating Income:
I.) $3,284,592 Midtown Peoria AZ
II.) $2,325,306 La Cholla Tucson AZ
III.) $1,512,000 Mission Agua Fria Peoria AZ
Total Annual Net Operating Income: $ 7,121,898
Capitalization rate: 8.37870352941176%
REAL ESTATE SNAPSHOT :
- Price for Bridgewater Midtown (Peoria, Arizona): $36,500,000
Annual Revenue.............................................................................................6,588,153
NOI.................................................................................................................3,284,592
- Bridgewater La Cholla Tucson $26,500,000 :
Annual Revenue..............................................................................................4,901,202
NOI..................................................................................................................1,691,137
- The Mission Agua Fria $22,000,000 :
Current Ann Rev..............................................................................................5,689,763
NOI..................................................................................................................1,512,000
***************************************. Gros Rev $17,079,110
DETAILS OF EACH ASSET :
#1.) Bridgewater Midtown:
Address 4000 N. 3rd Ave., Phoenix, AZ
Year Built 2016
# of Rooms 140
# of Beds 146
Type of Pay: Private Pay & Mercy Care
Website Senior Living in Phoenix Arizona | Bridgewater at Midtown
(solterraseniorliving.com)
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#2.) Bridgewater La Cholla: Address 6505 N. La Cholla Blvd., Tucson, AZ
Year Built 2007
# of Rooms 108
# of Beds 123
Type of Pay: Private Pay & Mercy Care
Notes: The property has 5 existing Villas and a 1.5-acre lot entitled to build 56 units for Independent Living, Assisted Living, Memory Care, and
behavioral Health.
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#3.)The Mission at Agua Fria: Address 8880 N. 107th Ave., Peoria, AZ
Year Built 2019
# of Rooms 90
# of Beds 111
Type of Pay: Private Pay & Mercy Care Notes The property includes 1.71 acres of land to the north side of the Facility that is prime for an additional 65+ units. The City of Peoria confirmed they would support additional Assisted Living (AL, IL, MC) or 55+ age-restricted apartments.
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UPSIDE :
Total Additional Land for Development 3.21 Acres Specifically:
- Peoria..........................................................1.71 "
Potential Entitlements: The property includes 1.71 acres of land to the north side of the Facility that is prime for an additional 65+ units.
The City of Peoria confirmed they will support additional Assisted Living (AL, IL, MC) or 55+ age-restricted apartments.
- Tucson.........................................................1.5 " Current Entitlements Tucson .........................................................additional 56 Units
- Midtown......................................................none
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POTENTIAL DEVELOPMENT UPSIDE :
- Tucson: Similarly, Existing 123 beds produce $ 6,642,000 annualization pluss $3,024,000 from entitled 56 units after construction cost
- Peoria: 111 beds X $54,000 annual rent target/bed is $5,994,000 annually. The development of 65 units adds $3,510,000 annually.
- Midtown: Revenue upside lies within streamlining operations (see below).
OPERATIONAL UPSIDE :
Well-defined customer patient classifications look to be the ultimate path to a "fair maximization " of profit margins within existing gross revenues when the correct "mix" of patient-specific-needs group demographics is marketed to for the superior management and excellent quality of care provided by Solterra Mgmt., et al. In other words, Solterra can maintain in-line contracted Insurers, providing additional net revenue for additional services such as higher-profit-margin-services such as Memory Care, etc... Please Note that Seller has agreed on behalf of his management company (5% already
expensed*see *Spreadsheets) to stay on following the successful close of escrow and partnering in on any additional construction needs, the *costs of which are not a part of this investment.
Arizona is a managed care State, which means the State of AZ contracts out their Medicaid Long Term Care is available to third-party insurance companies. They are awarded every 5 years. Per the Seller, Mercy Care/Aetna has had the Az components since 2000. Currently, Banner, United, and Mercy Care are the three providers. For Tucson, the Seller has agreements with Mercy Care and Banner. The Seller has recently gotten rates similar to Banner, opening more opportunities for particular population/behavioral health residents for the Tucson property. Since they have many Mercy Care residents, they can negotiate reasonable reimbursement rates because they can provide better outcomes and
reduce tenants' health care costs. If Mercy Care lost its contract, a new owner could keep the same rates with the new provider.