Senior care. That’s the topic of conversation when Jim Kelley and Lon Lloyd of Champions DFW Commercial Realty, LLC, welcomed Boone Nerren to the Champions DFW podcast. He is the president of AMZ Equity Partners, LLC. Here is an excerpt of their conversation as they discussed the senior care market of commercial real estate…
Boone: “It’s a moderate sized assisted living memory care facility. Most of the larger 200-300 unit senior care facilities you’ll see even in a market like Dallas or Houston is going to include a large component of the independent living of the fifty five plus who need limited services. It’s more just a lock and go type of community downsizing allowing seniors to travel go see their children go to places they want to go and have a minimal amount of maintenance versus a home and that tends to be the large driver of large unit complexes. You rarely see two or three hundred units of assisted living or memory care just because no one local community is going to have that dramatic need for that specific focus.
But even as I mentioned earlier in small towns in Texas, that are two or three thousand they can still fill 60 or 70 beds of assisted living and or memory care. And, so we designed Fredericksburg which has a population of eleven thousand. Not a big market at all with 60 assisted living and 24 memory care units. So that was a total of twenty one and a half million dollar project. We got underway in 2017 with construction 18 months later, right at the first of the year of 2019 we completed construction. I went through the licensing process with the state and we’re granted our license and now are leasing up. So that one projects very well, you know.
Twenty one and half million for our project. We add 14 and a half million in debt and a little over 6 million in equity in the deal. And upon completion, just construction not even lease up or stabilization, it’s appraised and valued at twenty seven million. So, five and a half million of additional equity created just by building a building, taking raw land and and putting improvements on it, and of course at five and a half million is virtually a doubling of our 6 million of equity we’ve got in it we’re handing leased it up yet so, prospects look very good. Why is that?”