Investment in Four Healthcare Facilities
In 2002, MCAP purchased four assisted living facilities, whose size and location allowed for both physical expansion and organizational improvements.
- Closely monitor the weekly occupancy and leasing reports for the facilities, allowing MCAP to analyze leasing progress, changes in rental rates and future projections of occupancy
- Expand two facilities
- Obtain FHA insurance and/or bond financing
- Sell bonds for long term capital gain
- Sold one facility after research showed a renovation would not provide an adequate return
- Formed management company, Commonwealth Assisted Living, to manage and reposition the facilities
- Invested in capital improvements, including the addition of Memory Care Facilities, resulting in substantial increases in net rental income
- Refinanced facilities several times, returning capital to investors
- Interim refinancing distributions and net operating income from property operations were the primary sources of investment return.
- Developed an alternative exit strategy to provide investors with several options. Most investors chose to receive a distribution in-kind of an interest in a new Virginia limited partnership, thereby retaining their ownership interest in the assisted living properties and deferring taxable gains and benefitting from future growth