Michael Dell's Firm Buys Senior Living Giant for Over $1 Billion

BDT & MSD Partners, an investment firm founded by Michael Dell, is acquiring a majority stake in Sunrise Senior Living, a prominent operator of upscale senior living communities. The deal is valued at more than $1 billion, according to sources familiar with the transaction.

Sunrise Senior Living operates over 230 communities across the United States and Canada, providing care for more than 22,000 seniors. The company is recognized for its luxury properties, including two high-profile towers in Manhattan: Sunrise at East 56th, a 17-story building at 139 E. 56th St., and The Apsley, a 19-story residence at 2330 Broadway. The Apsley offers amenities such as recitals by Juilliard students, art studio sessions, and backstage Broadway experiences, with monthly rates starting around $17,000.

The investment reflects a growing trend in the senior housing market, driven by the aging Baby Boomer generation. The oldest members of this cohort are turning 80 this year, and many possess the financial means to afford premium senior living options.

"The silver tsunami has been a topic since 1998," Coburn Packard, head of real estate equity at BDT & MSD, told The Wall Street Journal. "The difference now is that the long-predicted wave has finally shown up."

Industry occupancy rates support this outlook. In the third quarter, occupancy across 31 major metropolitan areas reached 90.4%, the highest level since the beginning of the COVID-19 pandemic. Assisted living occupancy, which dipped below 74% during the pandemic, has recovered to 89.1%.

Data from NIC MAP indicates a potential shortfall of over 575,000 senior housing units by 2030. Assisted living costs approximately $10,000 per month before additional care services are factored in. Many Sunrise locations report occupancy rates above 90%, with some maintaining waiting lists.

This marks BDT & MSD's first foray into the senior housing sector. The firm's existing portfolio includes luxury hospitality assets such as The Boca Raton and Four Seasons Hualalai.

Sunrise Senior Living owns fewer than a quarter of the properties it operates, managing the remainder for other owners. Its Manhattan properties were developed in partnership with Hines and health care real estate landlord Welltower.

The company has ambitious expansion plans, with over 50 new projects in development, representing an estimated construction cost of $7.5 billion. Sunrise aims to increase its annual groundbreaking rate from six or seven projects to ten by 2030. This growth strategy is supported by the company's decision to retain its development staff throughout the pandemic, enabling it to acquire sites that competitors may have overlooked.

Sunrise Senior Living CEO Jack Callison Jr. stated that the company's mission is to create environments that foster "longer, healthier, and happier lives."