Deal Size
$217.0M
Cap Rate
—
$/SF
—
$/Unit
$1,391,026
Occupancy
98%
The Clarendale of Mokena senior housing facility presents a strong investment opportunity due to its high occupancy rate of 98% and a robust debt service coverage ratio of 2.3, indicating strong cash flow. The price of $72 million for 156 units suggests a price per unit of approximately $461,538, which is competitive given the market's strength and the expected growth in demand for senior housing. The broader Chicago senior living market is experiencing limited new supply and increasing demand, which supports a favorable investment outlook.
Inland Real Estate Group appears to be pursuing a core-plus strategy, capitalizing on stable cash flows and demographic trends in the senior housing sector. Their acquisition of Clarendale of Mokena aligns with a broader strategy to invest in high-demand, low-supply markets.
LCS Senior Living likely sold the property as part of a capital recycling strategy, having realized a significant markup from their initial purchase price in 2018.
This transaction underscores the strength of the senior housing market in Chicago, with institutional buyers like Inland Real Estate Group signaling confidence in the sector's fundamentals. The pricing reflects a competitive market environment, with demand driven by demographic trends and limited new supply.
$34.0M
Holliday Fenoglio Fowler
Inland Real Estate Group
LCS Senior Living
The Chicago/Mokena market is expected to see significant growth in the senior population, with the number of Americans over age 75 projected to increase by over 4 million by 2030. This demographic trend supports sustained demand for senior housing.
The Clarendale of Mokena competes with other senior living facilities in the Chicago area, such as the Sheridan at Green Oaks, which recently sold for $65 million. The high occupancy rates across these facilities indicate strong demand.
The market is characterized by limited new supply, with the National Investment Center for Seniors Housing & Care projecting occupancy rates to exceed 90%. This suggests a favorable environment for existing properties like Clarendale of Mokena.
With senior housing occupancy rates expected to surpass 90% and the aging population increasing, rent growth is likely to be positive. The strong demand fundamentals support continued rent increases.
The property is already performing well with a high occupancy rate and strong debt service coverage. There may be limited immediate value-add opportunities, but maintaining high occupancy and optimizing operational efficiencies could enhance returns.
Rollover risk is likely low given the high occupancy and demand for senior housing. The probability of lease renewals is high, reducing near-term risk.
The property benefits from a diversified rent roll typical of senior housing facilities, reducing single-tenant risk.
Potential changes in healthcare regulations affecting senior housing demand.
MediumInland Real Estate Group should engage in active lobbying and policy monitoring to anticipate and adapt to regulatory changes.
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