OPPORTUNITY

Lenders are quick to sell licensed senior living community loans at a discount rather than foreclose.

■ Lenders do not want to own a health care property and assume the liability that comes with ownership

■ In many circumstances the properties being sold by lenders are not producing positive cash flow; lenders do not want to assume the working capital burdens after foreclosure

■ Value-add and foreclosure sales of senior living properties are generally traded as single assets rather than portfolios

■ Single-asset sales of $2 to $10 million are generally too small for larger institutional buyers

■ The Fund seeks to acquire one-off properties and aggregate the properties for sale

■ Once the portfolio is acquired, the McFarlin team will go through a value-add period of strategic investment in the properties, after which the properties will be run at max rent roll for a few years and will be refinanced or sold in aggregated pools to maximize return of capital to Fund investors