HMC Acquires Senior Housing Developer South Bay Partners

Senior housing developer South Bay is now part of the Harbert Management Corporation (HMC) platform.

The Birmingham, Alabama-based alternative asset firm in December announced it had entered into a “strategic transaction” to become majority owner and manager of Dallas-based South Bay Partners.

HMC has approximately $8 billion in assets under management across multiple asset classes, including European and U.S. real estate, senior housing communities, growth capital, credit solutions, infrastructure and absolute return funds.

As part of the transaction, South Bay Founder and CEO Craig Spaulding will transition to an advisory role with the company, with South Bay President Patrick McGonigle taking over as CEO of the developer.

Harbert Management plans to raise capital for South Bay’s development projects through a series of separately managed accounts and commingled funds. To date, the senior housing company has developed more than 10,000 units totaling more than $1 billion in total cost.

West Coast expansion was a goal for the company as it embarked on a pre-pandemic growth push, with projects in the California markets of Woodland Hills and Irvine, McGonigle told SHN in 2018.

In May 2020, Harbert closed a fund securing approximately $510 million worth of equity commitments to target the U.S. senior housing industry.

The addition of South Bay to the Harbert Management platform “brings a wealth of talent and experience developing new senior housing communities in markets around the country,” according to Harbert President and COO Travis Pritchett.

“The team has a great pipeline of deals under control and the market opportunity should continue to grow,” Pritchett said in a press release about the move. “This business will be very complimentary to our existing seniors housing investment platform, as it will give us control of pure development investment opportunities, but with greater flexibility to offer targeted and concentrated development risk exposure to our clients outside of our diversified, commingled seniors housing fund.”

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