Avison Young brokered two land sales that will result in the development of more than 250 units of assisted living, memory care and independent housing for the elderly.
In the first transaction, Sean McDonnell, principal in Avison Young’s Fairfield/Westchester office and head of the firm’s health care real estate division, joined with Senior Associate Alison Luisi of its Capital Markets Group to arrange the $5 million sale of a 3.81-acre site from Young’s Nurseries Inc. at 211 Danbury Road in Wilton to 211 Danbury Road LLC.
The site has been approved for the development of 90 assisted living and memory care units to be operated by Sunrise Senior Living, which operates about 315 assisted living facilities throughout the U.S., Canada and the United Kingdom.
In the second transaction, Sean Cahill, principal and managing director of Avison Young’s Fairfield/Westchester office, and Luisi arranged the $3.79 million sale of an 8-acre, pad-ready site at 26 Beard Sawmill Road in Shelton. The seller was Hawk’s Ridge of Shelton LLC and the buyer was Shelter Development LLC.
The site has been approved for 160 units of assisted living, memory care and independent living housing to be operated by another national operator, Brightview Senior Living.
Luisi noted that the 65-and-older population has been estimated by Connecticut’s Legislative Commission on Aging report to grow by 57 percent between 2010 and 2040 – and that the demographic now makes up more than 20 percent of the overall Connecticut population.
“We expect this appetite for new development in this sector to continue to grow as long as developers and operators are able to find sites that allow for the density they need,” she said.
“We listed for sale the Shelton property with only preliminary approvals for ‘assisted living’,” he said. “We then went to the market nationally to try and attract a developer who would meet our seller’s pricing expectations, have a good track record of closing, and would agree to the terms of our purchase and sales agreement (PSA).
“After we got the PSA executed, the buyer had the property under contract with the stipulation that he had 12 months with possible extensions to get full and final approvals for his plan,” Cahill said. “Then the developer would close and own the property.
“Along the way continued negotiation came up as the buyer and seller ultimately decided to begin site work ahead of the closing,” he said. “In order to attract the buyer we had to do research to prove the market for these units and that the Shelton location would attract people from lower Fairfield County to move there.”
The Wilton sale “was contingent on getting approval for the project, so there was a risk factor of not getting the approvals and the seller not closing the deal,” Luisi said. “The buyer had a contract that stipulated that it needed certain criteria in terms of density and building allowances for the deal to happen.
“Therefore the seller had a time factor risk as well as approval process risk,” she said. “If those things don’t come through, the value of the property goes down.”
In both cases a broker was needed to procure the buyer, Luisi said.