Bellevue-based Aegis Living, which provides senior assisted living and memory care at 32 properties throughout the West, announced today that it has acquired ownership of 10 of those properties — including one in Kirkland — in a joint-venture deal exceeding $350 million, the largest in its 24-year history.
Aegis acquired the properties totaling 702 units in Washington, California, and Nevada — which it has operated under a lease — through a joint venture with Boston-based Blue Moon Capital Partners LP, a senior housing private equity investor. It’s the second deal between Aegis and Blue Moon. In December 2018, they entered a joint venture to buy three properties totaling 253 units, including one in Bellevue and Kirkland, and one in California.
That was Aegis’ first deal involving institutional capital partners and the relationship has been positive, Aegis Living President Kris Engskov said in an interview.
“We are very closely aligned in philosophy, in approach, on operations, on people, on future growth — and that’s the reason we’re doing this with them on this particular opportunity, because we’re very aligned in what the future looks like and work well together,” Engskov said.
He wouldn’t share specific terms of the joint venture, but each party owns a significant portion of the buildings together. Aegis’ strategy is to be owner-operators, he added.
“We believe strongly that if you’re the owner and the operator, you’re always going to be aligned to where you’re headed,” Engskov said.
Aegis, which is privately held and today owns a significant piece of 70 percent of its properties, eventually would like to own and operate all of them, he said.
“I think there’s another eight that are currently leased and over time, we absolutely would either want to … buy those communities, or develop a community in those markets that we own,” he said.
Aegis also has eight properties under development, including Aegis Living Bellevue Overlake opening spring 2021 and Aegis Living Kirkland Waterfront opening summer 2021, and has a goal to double in size by 2030. But it’s not just about size, Engskov said.
“We’re so optimistic about what we do and the opportunity to do what we do even better post-COVID,” he said, also pleased by the high percentage of staff and residents already inoculated with the first dose of COVID vaccine.
“Aegis Living is going to be one of the safest places on the planet here in the next month” as vaccinations wrap up, he said, calling that a game-changer for the company.
Also, senior demographics haven’t slowed, Engskov said, calling the number of people who will need care over the next five to 10 years “gigantic.” Baby boomers begin turning 80 in 2026, but senior-living supply hasn’t changed much over the last year, he said.
COVID has highlighted the importance of senior living in the health care continuum, he said. While technology, including telehealth, has helped in senior care during the pandemic, senior care is still a people-oriented business, and consumer expectations are higher than ever, he added.
“We see that as a great opportunity for us to lean into that, to kind of overperform, to exceed people’s expectations,” he said. “… I think maybe more so now than in a very long time, the people that are on the front lines of senior living have been recognized for who they are and they’re a big part of our health care community; they’re getting the respect, they’re getting the understanding of what they do, and how critical their role is.”
That could attract more people to work in the industry as they see the opportunity provided by growth in the senior population and the vital mission of care, he said.
In a news release, Kathryn Sweeney, co-founder and managing partner at Blue Moon, praised Aegis founder and CEO Dwayne Clark and his team.
“Their energy, passion, and skill have met the COVID-19 challenges presented this past year for the benefit of residents, families, staff, and investors,” she said.
Aegis and Blue Moon acquired the 10 properties from Irvine, California-based Healthpeak Properties Inc., a real estate investment trust that owns and develops health care real estate for senior housing, life science, and medical office tenants.
The 10 properties include Aegis Living Kirkland on Totem Lake Boulevard NE, and Aegis Living Callahan House and Aegis Living Shoreline, both in Shoreline; an Aegis property in Las Vegas; and six Aegis properties in California.