An affiliate of Sage Healthcare Partners has agreed to acquire Henry Ford Village after bidding $76.3 million on the 1,038-bed continuing care retirement community (CCRC) as part of a recent bankruptcy auction.
The affiliate, HFV OPCO, LLC, plans to acquire the assets of the nonprofit community in Dearborn, Michigan, and add it to its senior living community network. Sage owns, operates, manages and consults in the senior housing and healthcare sectors. The company specializes in independent living, but also does business in CCRCs, assisted living and memory care communities and skilled nursing facilities.
Sage is planning to invest in improvements for the Henry Ford Village campus, bolster its programming and to uphold the community’s current commitments.
“The community at Henry Ford Village is vibrant, and Sage takes great pride in bearing the responsibility of preserving this community for years to come,” said Sage Healthcare Partners President Avi Satt in a press release about the deal. “We’re excited to bring a new chapter to the community’s story and look forward to strengthening HFV financially while enhancing the lifestyle residents have come to love.”
Chad Shandler, Henry Ford Village’s chief restructuring officer and a senior managing director at FTI Consulting, said the community and its leadership team were pleased with the auction and its results.
“Throughout the sale process, our guiding focus was to identify a path forward that upheld HFV’s values and stabilized its financial position while allowing us to maintain the care and lifestyle our residents have come to know, love and rely on,” Shandler said in the release. “Under Sage’s ownership, we believe HFV will achieve just that while providing a distribution to unsecured creditors.”
The transaction is subject to the U.S. Bankruptcy Court approval in a hearing scheduled for May 24.
The community is located near Henry Ford’s birthplace in Dearborn, Michigan. Erickson Retirement Communities originally developed the community in the early 1990s before it was acquired by the Henry Ford Village entity in 1998. Des Moines, Iowa-based Life Care Services joined the CCRC as operator in 2010.
Sage’s planned acquisition follows a period of uncertainty for the Michigan CCRC and its residents. Henry Ford Village (HFV) filed for Chapter 11 bankruptcy last November, as the pandemic and years leading up to it had created a “perfect storm” of financial pressures. These issues included the 2008 housing crisis and Great Recession; and the bankruptcies of General Motors and Chrysler.
In 2014, the community was named in a class-action lawsuit, and in 2019 HFV reached a settlement agreement where it and other defendants agreed to pay $800,000. Then, the Covid-19 pandemic derailed a possible refinancing of the community’s debt, which placed further pressures on operational costs and occupancy. That led the CCRC to file a motion seeking relief from the class action settlement last October — which was rejected, leading HFV to file for bankruptcy in 2020 and then ultimately engage in a stalking horse bid earlier this year.
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