Non-Profit Real Estate Acquisitions

PROBLEM

A non-profit Church group had recently come into a significant amount of monetary proceeds from the sale of an affordable housing property that they owned. As part of the non-profit’s mandate they had to acquire and/or lend on senior affordable housing properties throughout Southern California. The non-profit was specifically looking for senior properties in Los Angeles but the supply in LA was extremely limited. Therefore, the group needed to expand their search throughout Southern California to identify properties that fit their criteria. They wanted to continue to grow their debt and investment portfolio in this sector but had yet to find their first acquisition.  

SOLUTION

The non-profit group hired Lineage Asset Advisors to help them identify properties to acquire throughout Southern California. Lineage Asset Advisors identified 4024 32^nd Street in the thriving North Park District of San Diego which is a 26-unit age restricted affordable housing property (62 and over). Lineage identified the property in early 2016 and worked with owner to do extensive research and consulting on the sub-market, financial underwriting, and market analysis on senior housing in San Diego County. After underwriting and valuing the property, Lineage and the non-profit group recognized that the property, which was listed for sale at $5 Million, was overpriced. Lineage worked over the next 6 months to negotiate a price that was commensurate with the true market value.          

OUTCOME

Lineage negotiated a final sales price of $4 Million on behalf of the non-profit group,  which was $1 million below the list price. The non-profit group ultimately closed escrow on the asset in 2016 for $153,000 per unit. Lineage also helped the non-profit group negotiate a management contract with a local property management firm. This acquisition has been a stepping stone for the non-profit group who continues to look for opportunities to grow their legacy in senior affordable housing.