A new business led by senior residing market veterans, Scarp Ridge Funds Partners, is launching with a $300 million fund focusing on price-include, opportunistic and distressed investment decision alternatives.
“Scarp Ridge will seem to leverage our lots of years of investing experience and field associations to be the lover of selection to owners, loan providers, sponsors, and builders by getting, recapitalizing or restructuring offers to maintain and boost extended-expression price,” Rick Shamberg, a founder and controlling director of Scarp Ridge, wrote Thursday in an e mail announcing the new venture.
Even though also concentrating on hospitality, the company is concentrated principally on senior housing, such as independent residing, assisted living and memory care. Scarp Ridge is concentrating on fairness commitments of $10 million to $50 million.
Scarp Ridge’s approach contains acquisitions that can be designed below alternative price, with price-incorporate probable via capital expenses, rebranding, new administration or other techniques.
Scarp Ridge is also open to supplying runway cash to current homeowners, and might receive non-executing loans and generate structured financing involving financial debt, mezzanine solutions and most popular fairness.
“One of the differentiators among our fund and other funds resources is the intensive working backgrounds of the principals and the complementary skill sets we’ve curated and introduced alongside one another,” Shamberg informed Senior Housing Information in an e-mail.
Shamberg has intensive knowledge in the senior dwelling house, owning held management and/or advisory positions with a wide variety of companies centered on financial commitment and functions, including Draper & Co., Atwell Health and fitness Companions, Cerulean Associates, Chicago Pacific Founders/Grace Administration and Turnaround Methods/Arrow Senior Dwelling. He also served as a specific advisor to the Illinois Secretary of Commerce and in other general public provider roles, such as time in the George H.W. Bush White Residence.
He is co-founding Scarp Ridge with Greg Rush, who previously partnered with Shamberg to have and work a behavioral health and fitness facility. In 2015, Rush established Rush Cash Associates, which has a existing emphasis on deploying rescue capital into structured investments or recapitalizations with a concentration on hospitality and senior housing. His preceding expertise also involves leadership roles with Cadre, a data and engineering driven authentic estate investment decision administration system that all through his tenure invested about $600 million of equity and $1.5 billion of total transaction value into the multi-family, office and resort sectors. In addition to assisting guide many other companies, he served on the board of NorthStar Realty Finance Corp., and played a crucial position in driving the a few-celebration merger that set up Colony NorthStar, a $17 billion REIT.
They are joined by Kari Schmidt, who invested approximately 23 yrs with Brookdale Senior Living (NYSE: BKD). Schmidt initial joined Brookdale when the company’s portfolio numbered 16 communities, and assisted direct the business as it expanded to become the greatest U.S. senior residing supplier, with a latest portfolio of much more than 700 communities. As a division president with Brookdale, she held obligation for around $1 billion in earnings across additional than 300 communities. She began her job in the experienced nursing area and also served as regional director of operations for Eby Development and Administration, serving to to increase the company’s assisted dwelling and memory care items into Midwest markets.
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Scarp Ridge is launching at a time when the senior living marketplace has been dislocated by the Covid-19 pandemic. The normal assisted living acquisition value fell 30% in 2020, in accordance to Irving Levin facts.
Far more just lately, cap fees have fallen, specially for decreased-acuity communities, a not long ago unveiled CBRE report indicated. Even so, bargains are continue to getting done for underneath substitution value, which includes Welltower’s modern acquisition of 86 Holiday break Retirement qualities. The actual estate investment trust believed that offer rate to signify a 30%-moreover price reduction to substitution price tag.
And other funds are targeting price-insert chances, including a new Heitman fund with just about $2 billion in commitments.