Israeli company Pancho Real Estate Holdings has made an interesting investment in the US. The company, which specializes in global real estate, has purchased a property in San Antonio, Texas, designated for protected housing for patients suffering from Alzheimer's Disease and dementia. The purchase was made through Pancho's private real estate fund, which was founded in order to invest in private protected housing properties for mentally frail senior citizens. Pancho paid $17.5 million for the property.
Pancho's properties are worth an aggregate $400 million. Most of its investments are in income-producing real estate, real estate for development, and providing mezzanine and senior loans.
Pancho is now considering for the first time the possibility of investing in and developing a protected housing project for patients suffering from Alzheimer's Disease and dementia in Israel. Pancho recently met with various parties involved in this sector. The founder, owner, president, and CEO of Pancho is Eli Tilson.
A review published by Pancho for its investors shows that an estimated 5.5 million people in the US suffer from Alzheimer's Disease. The Alzheimer's Association International Society to Advance Alzheimer's Research and Treatment (ISTAART) predicts that the number of patients will rise to 13.5 million by 2050. The review also indicates that the protected housing market in the US is unprepared for treating the growing number of Alzheimer's Disease patients, and that there is a demand for special residences specially adapted to patients with memory loss.
The property acquired by Pancho, constructed recently by Silver Companies, was planned and designed specifically for the needs of patients with memory loss, and can accommodate 68 patients. Among other things, it has a single round corridor in the middle of the building that connects all the rooms and public spaces in order to prevent the tenants from getting lost in the building.
The purchased property is leased to protected housing management company Spring Hills, and annual rent from all the tenants totals $1.3 million. The lease is for 25 years, with two five-year options.
The expected annual return on this project is 14.3%, including financing. Pancho's real estate fund is likely to sell its holding in the property after five years. According to Pancho's review, the expected internal rate of return is 14% or higher. An investment in this property is classified as conservative. The first year's rent is paid in advance by Spring Hills, a very prosperous and experienced operator.
Published by Globes [online], Israel Business News - www.globes-online.com - on June 20, 2017
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