Clare at Watertower was bought at a bankruptcy auction by Harrison, New York-based company, Senior Care Development LLC.
Senior Care bid $53.5 million in cash and agreed to take liability for the over $57 million in resident deposits that the building currently holds. Senior Care Development CEO David Reis is thrilled to take advantage of this opportunity.
“We are very excited about this opportunity,” Reis told Crain’s Chicago Real Estate Daily. “We’ve been looking at it for over three years, and clearly it’s highly unique, being a block off Michigan Avenue. It’s beautifully built and has great amenities.”
The Clare is the cities only luxury high rise retirement community and is rated as a five star nursing home by the State of Illinois which is well above average compared to other Illinois nursing homes. Despite its high rating the owners of The Clare filed for chapter 11 bankruptcy last november after defaulting on their $229 million mortgage. Only 83 units or 34 percent of the building was occupied in 2011.
Senior Care Development plans to lower rates and to change the widely unpopular deposit refund policy that the building currently holds in which the families or benefactors of deceased residents must wait to get the 90 percent deposit refund they are to receive until other unoccupied units are sold. The new plan will refund parties as soon as the unit belonging to that particular resident is sold.
Current residents pay $600,000 entrance fees and $2,700 in monthly fees to receive meals and medical care.
During the auction there were multiple rounds of bidding in which Senior Care Development out-bid local real estate developers Michael Reschke, chairman and CEO of Chicago-based Prime Group Inc., and David Crawford, principal at Chicago-based D2 Realty Services Inc.
Reschke who owns, upscale senior housing company Brookdale Living Communities Inc.,said that his bid was $1 million behind Senior Care.
“They outbid us, and I wish them the best of luck with the building,” Reschke says. “We’re sorry we didn’t win. It’s a tremendous asset.”
Senior Care Development’s financial partner, New York-based Fundamental Advisors L.P., and management company, Des Moines, Iowa-based Life Care Companies LLC, have previously worked together in taking over two other distressed retirement communities in the Chicago area: Monarch Landing in west suburban Naperville and Sedgebrook in north suburban Lincolnshire.