In January of 2018, CREC partnered with a national real estate developer to form a joint venture to develop a 200-unit senior living community named Hidden Springs. The project is located in the north-Dallas suburb of McKinney, Texas, which topped Money Magazine’s list of “Best Places to Live in America” in 2014. A high standard of living coupled with an accommodative business environment, both at the state and local level, spurred a 260% population increase within McKinney over the prior 20 years, with population increasing from 54,000 in 2000 to 195,000 in 2020 (according to the U.S. Census Bureau).
As a result of the rapid increase in population, there existed a supply-demand imbalance, especially in the independent-living space, within the markets surrounding the site of the project. Hidden Springs was designed to meet this demand, with its unit mix consisting of 132 independent-living (“IL”) units, 40 assisted-living (“AL”) units and 28 memory-care (“MC”) units. Based on the local demographic trends and market fundamentals, all of the units were planned to be private pay, involving no governmental reimbursements.
Hidden Springs achieved its Certificate of Occupancy on March 9, 2020, and resident move-ins commenced immediately thereafter. The licensing for assisted living and memory care was delayed due to COVID-19; however, Hidden Springs passed its Texas Health and Human Services Commission (HHSC) Life Safety Inspection in June of 2020, which permitted assisted living and memory care residents to move into the facility.
In December 2021, based on value creation through construction and leasing activity, CREC was able to secure a bridge loan from Eagle Realty Group involving a five-year term, three years of interest-only payment and thirty months of fixed interest at a rate of 4.0%. The bridge loan proceeds allowed for the repayment of the original construction loan, a $2 million interest reserve and funds to construct resident climate-controlled garages. Current residents had indicated they would be willing to pay as much as $200 per month for these garages.
As of April 1, 2023 the Independent Living units were fully occupied and occupancy across the three levels of acuity reached 97%, which exceeded current year projections.
- Asset Location: McKinney, TX (North Dallas)
- 200-unit senior housing community
- Investment Date: January 2018
- CREC Total Investment: $11.5 Million
- Investment Type: Senior Housing Development
- JV Partner: PM Realty Group, L.P. (“PMRG”)