Optima Living, along with one of Axium Infrastructure’s managed funds and the Desjardins Global Asset Management-managed DGAM Global Private Infrastructure Fund, have acquired five seniors living and continuing care communities from The Brenda Strafford Foundation (BSF) for approximately $300 million.

The acquisition will add more than 1,000 suites and include a support office in Calgary, bringing Optima Living’s suites under management to more than 6,200. The deal increases Optima Living and Axium Infrastructure’s jointly held portfolio to 30 seniors living communities across Western Canada. 

“We initially partnered with Axium in 2019 as we were seeking new capital to grow our business in the long-term care infrastructure space,” Optima Living co-founder and principal Karim Kassam told RENX.

“At the time they were looking for new operators with whom they could grow their investments in the space as well. So that relationship has since turned into something quite special, where we own just over 3,000 units together.”

The transaction marks DGAM Global Private Infrastructure Fund’s second investment alongside Optima Living and Axium Infrastructure in the seniors living sector after making its first one in 2023.

“Optima has been chosen as the operating partner,” said Kassam. “Desjardins and Axium are the capital investors, and together we govern the assets and have a long-term view of those assets because we look to have a 30-year minimum investment horizon.”

BSF’s background and search criteria

BSF was established in 1975 by Dr. Barrie Strafford to provide continuing care in Alberta and has since expanded its work to include international healthcare in the Caribbean, innovation and research, family violence prevention, and support for children, youth and families. 

The foundation decided to sell its portfolio of seniors living facilities and its board of directors went through a search process to find the right buyer.

Kassam said his investment group was chosen even though it wasn’t the highest bidder.

“They obviously wanted transaction certainty but, in addition to that, what was most important to them was to find an operating partner that would acquire these (assets) that would be values-based and looked after the employees (who) were working with them for such a long time, as well as the residents,” he explained.

“That's what we believe we proved to be and was why we beat out all of the other proponents in the process.”

The five properties and their selling points

The five properties acquired by the investment group are:

• the 239-bed Bow View Manor, which provides long-term care at 4628 Montgomery Blvd. NW in Calgary;
• the 240-bed Cambridge Manor, which provides independent living, long-term care and memory care at 253 Smith St. NW in Calgary;
• the 175-bed Clifton House, which provides supportive living, long-term care, memory care and services for adults with developmental disabilities at 907 47th St. SE in Calgary;
• the 214-bed Wentworth Manor, which provides supportive living, long-term care and memory care at 5717 14th Ave. SW in Calgary;
• and the 152-bed Tudor Manor, which provides supportive living, long-term care and memory care at 200 Sandstone Dr. in Okotoks.

“It's mostly long-term care funded by Assisted Living Alberta over a long-term operating agreement,” said Kassam. “What interested us is that we could grow our business in the Calgary metropolitan area, where we didn't have as big of a footprint. 

“What also interested us is the quality of the assets and the quality with which the operations had been run by the management. We wanted to continue that legacy and build upon that.”

Kassam said the assets are all relatively new, well-managed and well-maintained. Intensification won't be a near-term priority but will be explored.

Expansion potential for investment partners

The investment partners will continue to look for more acquisition opportunities, according to Kassam.

“We are a values-based operator and will continue to bring our core values to the way we operate as a management platform,” he said. 

“We partner with institutional capital to make sure that there’s a quality of care provided to residents that come live with us, and we will be hiring the best-in-class employees and leaders to join us as we continue to journey to become one of the largest and best operators in Canada.”

Alberta remains central to Optima Living’s growth strategy, representing 76 per cent of its communities. Along with its investment partners, it has invested more than $1 billion into the province through seniors living and care infrastructure since 2020.

Seniors living market will continue to grow

Optima Living is bullish on seniors living as a real estate asset class, as baby boomers just turned 80 and Canada has a rapidly growing demographic of seniors.

“We think there are huge opportunities to build new assets for the seniors of tomorrow and believe that seniors' housing is no longer an alternative asset class,” said Kassam. “Investors are looking at it as a long-term market, particularly with the economics of multifamily. 

“Institutional investors are looking at seniors' housing as an asset class worthy of consideration. I think you'll see over the coming months and years an increase in investment — not just from the capital markets but from private capital and long-term private capital, both in private pay and infrastructure — for long-term care and seniors housing, as we look to meet the insatiable demand that's out there.”

The three partners

Optima Living was founded in 2007 by two friends to offer a more home-like experience in seniors housing and care. It has grown from 60 beds into one of Western Canada’s leading seniors living and continuing care providers.

Axium Infrastructure is an independent portfolio management firm dedicated to generating long-term investment returns through acquiring, developing, financing, operating and managing core infrastructure assets. It has invested in a diversified portfolio of more than 310 assets since 2010 and had approximately $14.4 billion in assets under management as of June 30, as well as approximately $2.2 billion in co-investments. 

Desjardins Global Asset Management offers a broad range of investment solutions for institutional and private wealth clients across public and private markets. Together with Guardian Capital Group Limited and its other subsidiaries, it represented $305 billion in assets under management and administration as of June 30.