Real estate private equity firm Northwind Group has closed a $342.5 million debt fund to fuel future investments in senior living and skilled nursing properties.
Northwind plans this week to structure the fund similarly to its previous debt fund from 2021, which resulted in approximately 70% of investments in skilled nursing and 30%in senior living, according to Northwind Group Founder and Managing Partner Ran Eliasaf.
“I think fund number two will look pretty similar, and it might be even more towards skilled nursing,” Eliasaf told Senior Housing News. “We’ve used skilled nursing as a pure need-driven asset class. Yes, it’s more complex operationally, but unlike senior housing, where there’s no limits on supply, what we’re focusing on the skilled nursing side is more limited.”
This breakdown between skilled nursing and senior living stems from what Eliasaf sees as the senior living industry “lagging a bit in leasing and overall performance,” despite consistent industrywide occupancy gains since 2022.
Northwind finances independent living, assisted living and memory care properties and prefers to fund campuses that have a mix of independent living, assisted living and skilled nursing. The New York City-based private equity firm has invested in senior living assets in 26 states and tends to “follow our relationships” with operating partners.
He said the company believes both senior living and skilled nursing will “perform well over the next cycle” as the initial, demographic-driven demand beings to enter the market.
“It is important to note senior living and skilled nursing assets are very different product and have unique operational challenges that require highly experienced and well capitalized owner/operators to succeed,” Eliasaf said.
Eliasaf added that Northwind has a “robust pipeline” of deal activity through the end of this year and into early next year, with plans to have 90% of the fund proceeds deployed by the second quarter of 2026.
Northwind finances value-add acquisitions and stabilized portfolios, but currently the company is not seeing “significant volume of distressed or rescue-capital situations.”
“When considering value-add acquisitions, our focus is on strong regional owner/operators with a proven track record of acquiring and turning around portfolios in their core markets,” Eliasaf said. “This thesis has proved successful to date and will drive our deployment efforts going forward.”
Eliasaf said the firm likes working in markets in Florida, North Carolina, Ohio and Virginia, and bases future investments on provider relationships and on “stable and consistent” Medicaid policy on a state-by-state basis.
Northwind’s interest in skilled nursing reflects a “conscious decision” while some assisted living markets were “overbuilt” with slow or inconsistent leasing and performance trends.
“We also saw the effect of Covid and the psychological effects thereafter about the cautiousness of people wanting to move their parents into a senior living environment that’s still there to some extent,” Eliasaf said.
Eliasaf said relationships with the right operators who have the knowledge and operating model are critical to improving a property’s overall performance and impact the firm’s decisions on future investments.
“We have to find proven, consistent performers,” Eliasaf said.
While Northwind may have a majority interest in skilled nursing investment, Eliasaf noted that he believed occupancy in core markets for senior living properties has “more stable waters ahead” as factors such as interest rate adjustments become “more predictable.”
“We’re seeing the oversupply gradually get absorbed and so I think the next five years are going to be positive for senior housing,” Eliasaf said.
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