New Wing Marks First Stage of Completion in $10-Million Community Makeover

PHOENIX, Arizona – Following a two-year effort, construction is officially complete on a brand-new 12,414-square-foot, $1.9-million Assisted Living North Wing at The Palazzo, a highly regarded independent living, assisted living and skilled nursing facility in Central Phoenix.

The new wing, which is accepting applications on their waitlist now, is on the grounds of the continuing care community located at 6250 N 19^th Ave., Phoenix, and is part of a massive, 350,000-square-foot, $10-million makeover at the facility.

“Our new, state-of-the-art Assisted Living North Wing will dramatically enhance the quality of care our residents receive here at The Palazzo, and it will allow our staff members to better accommodate the needs of our residents who require ‘round-the-clock assistance,” said The Palazzo’s Director of Marketing Mark Aronauer. “The new wing has 170 beds distributed across one and two-bedroom apartments that are some of the largest in the state, and we’re excited to open the doors and introduce even more residents to what life is like here at The Palazzo.”

Designed by the Cunningham Architectural Group and constructed by Scottsdale’s Profab Construction, the new wing gives residents the ability to maintain their privacy in their own homes while enjoying access to 24/7 assistance and care.

The opening of the new Assisted Living North Wing marks the first stage of completion in the facility-wide makeover, and additional renovation phases will target other areas of the property, enhancing residential, medical and social facilities for residents with a wide range of differing needs. Community residents will also enjoy access to the property’s “Main Street” area, a thriving, central community hub complete with a library, beauty salon, bar, cabaret stage, fitness center and more.

“We want our residents to be able to age in place and maintain their independence as much as they can,” said Aronauer. “This new wing allows them to do so while having the peace of mind that comes with having staff members available to help them ‘round the clock, should the need arise.”

To learn more about The Palazzo’s current residential opportunities and the property’s expansive, $10-million makeover and be added to the waitlist, email [email protected]. For more about The Palazzo, visit PalazzoHC.com

TUCSON, Arizona – Situated directly off of Interstate-10 and 22nd Street in Tucson, the +/- 2,904 square foot Circle K building sold at a 7.6% cap rate, or for $2,150,000 ($740 PSF). The property has excellent street exposure, with immediate access to Interstate 10.

Situated in the South Tucson Retail submarket, the fully occupied Circle K is near several amenities, including the Tucson International Airport and downtown Tucson.

Nick Miner, CCIM of ORION Investment Real Estate exclusively represented the Seller, 655 West 22nd Street, LLC based out of California. Miner said, “There were multiple offers on this property even with it being an off-market transaction. This buyer was selected because of the shortened due diligence timeframes and a proven track record of closing on similar type properties.”

The Buyer in this off-market transaction was SGAS Holdings, LLC.

TUCSON, Arizona — Mainstreet, one of the largest developers of post-acute properties in the United States, is having a rocky launch for its Rapid Recovery Center offering in Arizona and recently sold off the partially completed transitional care property at 5151 East Pima Street in Tucson for $14.04 million to an affiliate of the Aspen Group of Scottsdale.

The property sold in an REO transaction and a loan assumption.

A year ago, Mainstreet’s plan was to open 11 Rapid Recovery Centers over 18 months, in Arizona and Texas. Now, the Carmel, Indiana-based company has decided to pull out of the Arizona market entirely, laying off 70 workers. All of these jobs are in Arizona; Mainstreet has not made workforce changes to its other operations or offices in response to the situation in the Grand Canyon State, CEO Zeke Turner told Senior Housing News.

One of its Arizona Rapid Recovery Centers, in the Phoenix suburb of Surprise, is open but has only a few patients, the Indianapolis Business Journal first reported Thursday. The other three locations—in Phoenix, Tucson and Chandler—will not open. Mainstreet plans to close the Surprise facility and either sell all four properties or lease them to a different operator. Originally, they were to be managed by Mainstreet’s operating arm, Mainstreet Health, which was formed in 2014.

Start-up costs for the Arizona facilities ran higher than projections, and this was a major factor in the decision to pull out of the state, Mainstreet CEO Zeke Turner told Senior Housing News. A “challenging local reimbursement environment” and slower than expected real estate sales also caused unexpected difficulties, he said.

Turner declined to share specific cost figures for the developments. The Phoenix Business Journal previously reported that Mainstreet would invest more than $100 million to develop and staff the four properties.

The Rapid Recovery Center concept is to create buildings with a luxurious feel and to staff them with high-level clinicians, including having physicians on site daily. The goal is to be a post-acute provider of choice for managed care systems, by achieving better outcomes in a shorter time period for rehabilitation patients. Specifically, the centers are meant to help prevent readmissions while shortening length of stay—two major objectives for health systems that are eager to control costs and that face Medicare penalties tied to re-hospitalization rates.

Mainstreet is moving ahead with Rapid Recovery Centers in Texas, Turner said.

“We are committed to Rapid Recovery Center and believe in it,” he said. “We have three centers open in Texas right now and are scheduled to open five more over the next 12 months. This is already a huge undertaking and commitment, which did contribute to the Arizona decision.”

This is just the latest news highlighting challenges in the skilled nursing and post-acute sector.

We reported the Mainstreet land purchase in September 2016, see Real Estate Daily News, Transitional Care Center Coming to 5151 E Pima Street, Tucson.

For prior transaction, see RED 4169.