The Arkansas Teacher Retirement System has sold the Woodland Heights retirement center in Little Rock to the Woodland Heights AL Real Estate LLC for $16.8 million, system Executive Director George Hopkins said Monday.
The sale of the 146-unit property south of Interstate 630 closed for the appraised price from an April 2014 appraisal, he said. The property includes 123 two-bedroom units, 21 one-bedroom units and two studio apartments, he said.
The retirement system acquired the retirement center in 2001 after Riley Co. defaulted on a loan from the retirement system.
"Without complete data from the past, my assumption is that Woodland Heights ultimately resulted in a loss in the range of $4 million to $4.5 million [to the system]" Hopkins said.
He estimated that the system invested $22.5 million in the facility and said that "numbers since 2007 show positive cash flows of about $1.4 million."
"Ultimately, the major difficulty in the Woodland Heights facility was my unwillingness to provide a medical care component such as assisted living ... due to the financial risk to the ATRS trust fund," said Hopkins, who has been the system's executive director since December 2008.
"RPM [Management Company Inc.] provided excellent management of Woodland Heights and helped turn it around as an independent-only living facility," he said. "Lack of a medical care component prevented the facility from reaching a core asset potential."
In June 2014, the trustees authorized the sale of the system's properties in Arkansas, except for the system's headquarters in Little Rock and the Victory Building in Little Rock, if the sales prices equal or surpass the most recent appraised values.
The teacher retirement system is state government's largest retirement system with more than $14 billion in investments and more than 100,000 working and retired members.
On April 27, Woodland Heights AL Real Estate LLC of Baltimore filed as a foreign limited liability company with the Arkansas secretary of state's office, according to state records. Kenneth R. Assiran is the incorporator and organizer of the company.
Assiran is managing director of Capital Health Group LLC. He could not be reached for comment by telephone or email Monday.
Capital Health Group is a private equity company specializing in making debt and equity investments in the senior housing industry, its website says. Its locations include Baltimore, Dallas and Media, Pa.
Hopkins referred questions about the sale to Randy Wyatt, who is vice president of public affairs for Compass Pointe Healthcare System.
Wyatt said Compass Pointe became the management company for the Woodland Heights retirement center Friday.
Compass Pointe also manages 18 skilled-nursing facilities and two other assisted living facilities in Arkansas and is owned by the Capital Funding Group, he said.
The Woodland Heights facility has 119 residents, Wyatt said.
"We feel like we can provide a great service to these folks," he said.
Compass Pointe plans to convert three floors on the west wing of the facility into assisted living units. One of the three floors will be a memory care unit to provide increased services to patients with dementia and Alzheimer's disease, he said.
The project will take six to nine months to complete.
The other nine floors in the facility will continue to be independent living units, Wyatt said.
Metro on 05/05/2015