NOW Closed – Now closed to investment.
Spire has again partnered with US based Bridge Investment Group LLC, to provide Australian investors with the ability to access income and growth via an investment in the US Senior Housing and Medical Properties market.
Spire USA ROC Senior Housing and Medical Properties Fund II, will operate as a feeder fund to the underlying US investments sourced and managed by Spire’s US real estate partner, Bridge Investment Group LLC.
The Fund acts as an Australian feeder fund into the assets of Bridge Seniors Housing and Medical Properties Fund II, LP (“Bridge Seniors II”). Bridge Seniors II is a “buy, fix, sell” private equity real estate fund, investing in income producing and value-add US seniors housing and medical office properties.
The Fund intends to provide investors with meaningful and consistent Current Income paid on an annual basis and the potential for strong capital appreciation and attractive risk-adjusted returns by investing in select Seniors Housing properties located throughout the US. The Fund will focus on independent living (“IL”), assisted living (“AL”) and memory care (“MC”) facilities, although the portfolio may also include skilled nursing facilities (“SNF”) and continuing care retirement communities (“CCRC”). The Fund also intends to opportunistically invest in select medical office and other healthcare-related properties which represent exceptional value.
Following the Investment Period, an exit strategy will be executed, which may include an IPO or trade sale of the portfolio.
Bridge Seniors II will acquire assets that will benefit from what is being called the “Silver Tsunami’ – the US ageing population demographic, in which over 10,000 people per day are turning 65.
Each asset acquired will have a value-add strategy which will be implemented to increase the property’s cash flow and total return. In many cases this will involve increasing the number of Memory Care beds in a facility. Memory Care is a relatively new specialist sector and asset class within the US senior housing market, which provides specialist accommodation and care programs for residents afflicted with dementia; the leading cause of which is Alzheimer’s disease.
Currently in the US, there are over 5 million people living with Alzheimer’s and someone develops Alzheimer’s every 68 seconds. Yet there are only 35,000 Memory Care beds available. Accordingly, most Memory Care facilities are 100% occupied – with waiting lists.
Following the amalgamation of the portfolio during the Fund’s Investment Period, Bridge will asses the method and timing of the most profitable exit strategy for the portfolio. It is expected that this exit strategy will seek to exploit the pricing differences between the private markets and the public markets, via a portfolio or portfolio sales to publicly traded Real Estate Investment Trusts (REITs), or via an Initial Public Offering (IPO) of the portfolio as a new REIT. Alternatively, individual assets may be sold when the value has been maximised.
The Bridge team behind the underlying Bridge Seniors II program, concluded a similar strategy in 2006 via the sale of a US$5 Billion portfolio of US Senior Housing properties to a publicly traded REIT, generating a portfolio Internal Rate of Return (IRR) of 33% (p.a.).
|Performance as at 31 December 2019||Net Returns*|
|Since inception p.a.||0.83%|
*Performance returns are based on an investment made at the Fund’s first issuance of units on 3rd March 2017 at $1.3220 per unit and includes Unit Price growth from commencement of Net Asset Value calculated after all fees and expenses following the completion of capital raising in November 2017. Unit Price and performance do not include the value of Foreign Income Tax Offsets (FITOs) which have been distributed in addition to cash. Individual investor performance will vary according to the Application Price at which they were issued Units in the Fund, which in turn was based upon the AUD / USD exchange rate applicable on the day that an investment is accepted. Past performance is not an indicator of future performance.
|Date||Unit Price||Net Monthly Return|
|31 December 2019||$1.3432||-3.93%|