In one of the first pension fund investments in a retirement community nationwide, an Equitable Life Assurance Society fund has teamed up with a Catonsville company to develop the planned $200 million Oak Crest Village in Carney.
In addition to Oak Crest, the joint venture between Senior Campus Living Inc. and Equitable's $3 billion Prime Property Fund intends to develop a number of areas for seniors around the country.
"There's a growing need for this type of real estate, and Senior Campus Living has done a tremendous job recognizing and capitalizing on the trend," said John R. Connelly Jr., a senior vice president of Equitable Real Estate Investment Management Inc., which manages the fund. "They've built a better mousetrap."
Senior Campus Living, which pioneered the senior living community concept in 1982 when it began the $205 million Charlestown Retirement Community on the site of the former St. Charles College and seminary in Catonsville, also is considering sites for new communities in Silver Spring, Philadelphia, Boston and New Jersey.
The 110-acre Charlestown project has 2,450 residents.
The company hopes to acquire land for at least two new communities within the next six months, said Brian P. Froelich, Senior Campus Living's president and chief operating officer. Over the next two decades, the company plans to develop $2 billion worth of retirement communities.
"This gives us access to a large,stable source of funds and allows us to focus on the management side and providing service to our residents," Mr. Froelich said. "What we really gain is a partner to develop multiple communities, and Oak Crest is the first step toward that."
Oak Crest Village is planned to have about 2,000 residents living in an 85-acre community by 1998. Equitable expects to invest up to $300 million in Senior Campus Living communities in the next five years, generating a more than 12 percent return for the 262 public and corporate pension funds in the Prime Property fund, Mr. Connelly said.
Equitable Real Estate Investment is the nation's largest real estate investor, with more than $35 billion in assets. The Prime Property fund will provide only an equity interest in Oak Crest; the construction of both Oak Crest and Charlestown was financed by Mercantile-Safe Deposit & Trust Co.
"This is important for the industry as well as for us," Mr. Froelich said. "Equitable is one of the most well-recognized financial institutions in the world, and for them to get involved, it lends credibility to the industry."