Key Takeaways
- • Welltower acquired the 339-unit Warner Center assisted living community at 6233 N. Variel Ave. in Los Angeles from Harbert South Bay for $230.3 million, or about $539 per square foot, according to a deed filed with L.A. County.
- • Harbert South Bay, the senior housing development arm of Harbert Management Corp., and the Bluhm family's LAMB Properties bought the 2.7-acre site for $15.3 million in 2018, making the sale roughly 15 times the land cost.
- • The Variel of Woodland Hills opened in 2022 with 215 independent living, 94 assisted living and 29 memory care units, and is operated by Momentum Senior Living.
- • The deal reflects Welltower's continued $40 billion senior housing acquisition strategy under CEO Shankh Mitra, as the REIT expands in California following an August purchase in San Jose for $99.6 million.
- • Warner Center is seeing a wave of senior housing development under the 2013 Warner Center Specific Plan, with Wellpointe's 3,200-unit Viva L.A. project unveiled in July.
Summary
The seller is the senior housing development arm of Alabama-based private equity firm Harbert Management Corp. Harbert South Bay, formerly South Bay Partners, and the Bluhm family's LAMB Properties teamed up to buy the 2.7-acre development site between Erwin Street and Victory Boulevard for $15.3 million in 2018. The joint venture demolished a vacant office building and broke ground in 2019 on The Variel of Woodland Hills, an eight-story community with 215 independent living units, 94 assisted living units and 29 memory care units. The property opened in 2022 and is operated by Laguna Niguel-based Momentum Senior Living. Harbert later became majority owner of the former Dallas-based South Bay Partners, which rebranded as Harbert South Bay.
The transaction underscores Welltower's push into the senior housing sector. Since 2020, CEO Shankh Mitra has led the Toledo, Ohio-based REIT on a $40 billion senior housing buying spree, which the Wall Street Journal reported in June is now paying dividends. Welltower's market value rose from about $47 billion in May 2020 to about $170 billion currently. Last year the company acquired more than 900 senior housing communities, according to its annual filing, including a $4.6 billion CAD deal for 38 senior housing properties and nine development sites across Canada from Amica Senior Lifestyles and the Ontario Teachers' Pension Plan. Welltower also paid $99.6 million all-cash in August for a 195-unit senior living community at 3355 Almaden Expressway in San Jose, according to The Mercury News.
The Variel project presaged a wave of senior housing construction in Warner Center, a former low-rise office and industrial district where city planners have incentivized denser development under the 2013 Warner Center Specific Plan. Wellpointe unveiled its 3,200-unit high-rise senior housing project, Viva L.A., in July. Separately, Los Angeles Rams owner Stan Kroenke is pursuing a $10 billion megadevelopment on the site of the former Promenade mall, including the planned permanent Rams Village headquarters, which he acquired in 2022.
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