Locust Point Capital beat its own internal estimates by raising a $312 million fund to deploy in the senior housing and care space, with a considerable planned investment in skilled nursing properties.
The fund, Locust Point Private Credit Fund, set a target of $250 million. Locust Point had raised nearly $96 million as of February, according to SEC filings that month.
The Red Bank, N.J.-based firm will use the fund to provide senior mortgages, preferred equity, and subordinate debt to owner-operators in the senior housing, memory care, assisted living, and skilled nursing sectors.
Locust Point plans to spread the fund’s capital across the senior housing spectrum, founding partner Eric Smith told Skilled Nursing News. He estimates that 30% to 40% will be earmarked for skilled nursing facilities, while the lion’s share of the capital will be deployed in senior living. The funds can be used for acquisitions, renovations, ground-up construction and general working capital purposes.
Nearly $100 million of the fund’s capital has been deployed in secondary and tertiary markets with a significant need for senior housing, Smith said.
“We typically follow repeat owner-operators with whom we have existing relationships,” he said.
Two-thirds of Locust Point’s capital came from American investors, while the balance was raised from European interests. There is growing interest in senior housing from foreign investors, Smith said. Senior demographic trends over the next 20 to 30 years — and the demand that will create — are very enticing to investors.
“The consistency of returns is appealing and we provide them access to markets where larger institutional investors may not have access,” Smith said.
Written by Chuck Sudo