Sun sets on Investcorp's partnership with sunrise

Real Estate Weekly, March 5, 2008

Investcorp Real Estate Group Realizes ROI Objective with the Successful Recapitalization of its Assisted Living Development Portfolio with Sunrise Senior Living

Investcorp's US-based real estate group announced the successful recapitalization of a two-property assisted living portfolio it jointly developed in partnership with Sunrise Senior Living, Inc..

With this recapitalization, Investcorp fully exited its investment in both properties while Sunrise and an affiliate of Herbert J. Sims & Co., Inc. will jointly own and continue to operate both locations. Terms of the transaction were not disclosed.

Investcorp and Sunrise formed their joint venture in June 2004 to develop and operate two senior living communities, Sunrise of Crestwood in Yonkers, New York, and Sunrise of Upper St. Clair, in Upper St. Clair, Pennsylvania.

The partners broke ground shortly after acquisition and construction of the properties was completed in late 2005. The properties achieved full occupancy in late 2006 and early 2007 and today offer residents a full range of assisted living services in state-of-the-art facilities.

"Our development joint venture with Sunrise is a good example of Investcorp's ability to team up with best-in-class operating partners and to invest across a broad spectrum of asset classes to create value for Investcorp and our investors," said Peter Petron, principal with Investcorp's Real Estate group.

"We entered this opportunity in 2004 with a business plan to develop these properties successfully and bring them to a stabilized operating level.

"Both properties are extremely well situated within their respective submarkets and today enjoy high occupancy levels and good operating cash flow. Having achieved our stated objectives together with Sunrise, now is a natural time for us to work with them on a recapitalization of this portfolio. We look forward to future development and investment opportunities with Sunrise in the assisted living sector."

Sunrise of Crestwood is a 79-unit senior living community located immediately northeast of New York City. Sunrise of Upper St. Clair is a 73-unit

assisted living community located in suburban Pittsburgh.

Both properties feature studio, one-bedroom and two bedroom apartments and are centrally located.