Senior housing developer Harbert South Bay sold its 339-unit Warner Center assisted living community for $230.3 million, or about $539 per square foot.
The senior housing development arm of Alabama-based private equity firm Harbert Management Corp. sold 6233 N. Variel Ave. to medical real estate investment trust Welltower, according to a deed filed in L.A. County and a source with knowledge of the deal. Spokespeople for Welltower and Harbert declined to comment.
Harbert South Bay, formerly South Bay Partners, and the Bluhm family’s LAMB Properties teamed up to buy the 2.7-acre development site between Erwin Street and Victory Boulevard for $15.3 million in 2018, the companies previously announced.
The joint venture demolished the vacant office building on the lot and broke ground in 2019 on The Variel of Woodland Hills, an eight-story senior living community comprised of 215 independent living units, 94 assisted living units and 29 memory care units.
It opened in 2022 and is currently operated by Laguna Niguel-based Momentum Senior Living, according to its website. Shortly after, Harbert announced it had become the majority owner of the former Dallas-based South Bay Partners and the developer rebranded as Harbert South Bay.
The Variel Avenue project presaged a wave of senior housing construction in Warner Center, a former low-rise office and industrial district where city planners have incentivized denser development as part of the 2013 Warner Center Specific Plan. That trend is about to kick into high gear after Wellpointe unveiled its 3,200-unit high-rise senior housing project, Viva L.A., in July, as the Business Journal previously reported.
Los Angeles Rams owner Stan Kroenke is also betting big on the future “downtown of the San Fernando Valley,” where he plans to build Rams Village, the future permanent headquarters for the football team. Kroenke demolished the defunct Promenade mall after acquiring it in 2022 and last year unveiled a $10 billion megadevelopment including high-rise housing, hotels, and office buildings.
Rams Village is also slated to include a swath of retail and other entertainment avenues when completed, along with public green space.
Silver is the new black
The deal comes as healthcare real estate giant Welltower leans harder into the “silver economy” buoyed by the aging population in the U.S. and other countries.
Since 2020, Welltower chief executive Shankh Mitra has led the company on a $40 billion senior housing buying spree. It was an audacious move during the COVID-19 pandemic when nursing homes and assisted living facilities were emptying out. However, the company’s enormous portfolio of more than 2,500 senior living communities is now paying dividends, as the Wall Street Journal reported in June. Welltower’s market value soared from about $47 billion in May 2020 to about $170 billion today.
Last year, the Toledo, Ohio-based REIT acquired more than 900 senior housing communities, according to its annual filing. That included a $4.6 billion CAD deal to acquire 38 senior housing properties and nine development sites across Canada from Amica Senior Lifestyles and the Ontario Teachers’ Pension Plan.
And Welltower has recently been shopping in California. Aside from the Warner Center acquisition, the firm also paid $99.6 million all-cash in August for a 195-unit senior living community at 3355 Almaden Expressway in San Jose, as The Mercury News previously reported.
