MG Properties Sells SoCal Senior Portfolio for $163M

JP Morgan funded the deal with a $104 million loan.

A public-private venture led by Eagle Partners has acquired two age-restricted affordable housing properties totaling 551 units in Escondido, Calif., for $162.5 million. MG Properties sold the portfolio, Yardi Matrix data shows.

The partnership also included Red Stone Equity Partners, JP Morgan and the California Statewide Communities Development Authority, as well as Affordable Housing Access. JP Morgan issued a $104.4 million financing package consisting of two Fannie Mae loans, the data provider shows.

Dubbed The Hendrix Apartments and The Hadley Apartments, the two properties are at 439 West El Norte Parkway and 1045 Morning View Drive, less than 1 mile from one another and in a supply-constrained submarket, about 34 miles northeast of downtown San Diego. Several parks, retail outlets and healthcare centers are within 6 miles.

The duo’s apartments average approximately 754 square feet across studio, one- and two-bedroom layouts. Amenities consist of swimming pools and gyms, as well as a fenced dog park, among other features.

Following this trade, Eagle will implement a long-term affordable preservation strategy while also executing a capital improvement program. A minimum of 80 percent of units, or about 440 apartments, will be restricted to households earning up to 80 percent of the area median income for the next decade. These restrictions will fall into place as a result of a CSCDA grant.

Red Stone sourced the funding for this deal from JP Morgan, marking the second time Eagle, Red Stone and JP Morgan collaborated. Their first acquisition consisted of Hills at Hacienda Heights, a 350-unit asset in metro Los Angeles, which commanded $107 million. MG Properties sold that property as well, Yardi Matrix shows.

Strong fundamentals drive senior investment

This latest portfolio deal lands as senior housing fundamentals continue improving, with occupancy at 89.4 percent, up 11 percent since its lowest point in 2021, according to a white paper by Clarion Partners.

In other senior housing trends, the research also underlines the sector’s strong returns, which outperformed the combined average gains of the multifamily, hospitality, industrial, office and retail markets over the past two decades.

Another recent high-profile portfolio transaction includes PGIM’s sale of a 285-unit senior housing collection in metro Phoenix. KKR acquired the assets for $112.3 million earlier this year.