Senior Focus

Shelter Group Divests Affordable

By Cutright Elizabeth on Sep 5, 2017 in News

In a move intended to anticipate exponential growth in the industry, real estate development firm The Shelter Group, recently sold the entirety of its affordable housing portfolio to Enterprise Homes.

Stating a desire to focus on the rapidly growing potential of the company’s senior housing properties, The Shelter Group’s executive vice president and CFO Jeffrey Hettleman told Senior Housing News the decision was also based on the company’s desire to remain “service oriented.”

“As Brightview has grown, the two businesses have become different and really served different populations, “said Hettlemam. “Brightview had gotten so much larger, in terms of people, and it operates around the clock, and senior living is much more service intensive that the challenges of doing that well and maintaining our culture required us to really focus on that part of our business.”

The Art of the Deal

Though neither company disclosed the final purchase amount, the August 1^st sale allows The Shelter Group to shift gears towards a complete senior housing portfolio. The switch makes sense given the current makeup of the company’s operations. Before the sale, only 175 employees manned The Shelter Group’s affordable housing portfolio, while almost 3,600 work under the Brightview banner.

Enterprise Homes will absorb those 175 employees as well as 43 affordable housing properties located primarily in Maryland. With the purchase, Enterprise Homes will triple its holding by adding 4, 1543 affordable housing units to its portfolio. According to Jeff Kunitz, executive vice president of CBRE Affordable Housing (who worked on behalf of The Shelter Group during the transaction), the company specifically looked for a buyer willing to maintain the properties as affordable housing for low-income families.

“It was very important for Shelter Group to find a buyer who would maintain the same high level of service for the tenants in these properties that they had provided. This transaction showcased two great companies partnering together to ensure that high-quality affordable housing continues to be available for families and seniors,” said Kunitz, in a prepared statement.

A Future Full of Growth

By divesting itself of its affordable housing properties, The Shelter Group plans to pour all of its resources into growing its portfolio of Brightview senior housing communities. According to Hettleman, the company’s initial plans include completing four to five new senior housing projects per year.

“We are well capitalized and are committed to having the financial structure going forward to support our growth and the business that we’re committed to,” he said.

Currently, there are six Brightview communities under development across the Mid-Atlantic, including Maryland, Massachusetts, New York and Pennsylvania. Three additional projects in Connecticut, Maryland and New York are slated to start later this year. With these new additions, says Hettleman, The Shelter Group can refine its operations in a way that enhances the overall quality of service and care the company provides to residents and their families.

“Given the number of [employees] and our growth plan, it’s important that we’re able to focus on this business, particularly around ensuring that we do the highest quality job possible and that we maintain that culture so that growth does not come at the expense of quality,” he said.