- BDT & MSD Partners will buy a majority stake in Sunrise from Canada’s Public Sector Pension Investment Board, with Sunrise leadership owning the rest, in a deal valued at more than $1B.
- Sunrise operates more than 230 communities serving over 22,000 residents, owns fewer than a quarter of them and has a development pipeline of 50-plus communities costing about $7.5B.
- Senior housing occupancy hit a post-pandemic high of 90.4% in Q3, and NIC MAP projects a shortage above 575,000 units by 2030 as the 80-plus population grows.
Investment firm BDT & MSD Partners is acquiring a majority stake in Sunrise Senior Living in a senior housing deal valued at more than $1B, according to The Wall Street Journal. Sunrise leadership will own the remainder.
Terms were not disclosed, but people familiar with the matter put the value above $1B, making it one of the largest senior housing transactions since the pandemic.
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Who Is Buying and Selling
Canada’s Public Sector Pension Investment Board is the seller. Sunrise is the fifth-largest senior housing operator in North America, with more than 230 communities and more than 22,000 residents across the U.S. and Canada.
It marks the first senior housing investment for BDT & MSD, which has roots in the Michael Dell family office and holds luxury hospitality assets including The Boca Raton, Four Seasons Hualalai and a stake in Auberge Collection.
Sunrise was founded in 1981 by a husband-and-wife team who lived alongside residents in their first community in Oakton, Va. BDT & MSD’s Coburn Packard said the long-discussed demographic wave is now actually arriving.
The Operating Model
Sunrise owns fewer than a quarter of its communities and earns management fees from the rest. Its plan is to win more management contracts by pairing its care expertise with BDT & MSD’s hospitality experience.
Most communities are more than 90% occupied, and many have wait lists, CEO Jack Callison said. Assisted living costs roughly $10,000 a month before add-on care services.
At Sunrise’s two Manhattan locations, residents can attend classes and performances by Juilliard students and Broadway shows with backstage discussions, an example of the upscale programming the company sells.
Demand Meets Thin Supply
NIC MAP data show occupancy across 31 major markets reached a post-pandemic high of 90.4% in Q3, with assisted living at 89.1% versus a pandemic low below 74%. NIC MAP also projected in August that the U.S. could face a shortage of more than 575,000 units by 2030.
Sunrise has a pipeline of more than 50 communities with estimated construction costs of $7.5B. It is starting six to seven projects a year and plans to reach 10 annually by 2030.
Why It Matters
Big institutional money is committing to senior housing as demographic demand fills rooms that sat empty in 2020 and 2021. Pairing a hospitality-style owner with an established operator also signals where capital sees the upside, in the upper end of the market.
Risks remain. Inflation and higher rates are raising costs, an immigration crackdown could deepen staffing shortages, and improvements in healthcare and technology are helping older adults stay home longer.
What’s Next
Watch how fast Sunrise converts its development pipeline into openings and whether other hospitality-focused investors follow BDT & MSD into the sector.
