GMH, a company that pioneered both the student and military housing markets, has set its sights on a new niche play.
The Newton Square, Penn.-based developer has broken ground on Futures of Palm Beach, a high-end drug and alcohol rehabilitation center in Tequesta, Fla. In January, the company opened a healthcare division following its acquisition of Harrisburg, Penn.-based Dynamic Healthcare Solutions.
The company says this is the first of many rehab centers it plans to open under the brand “Futures.” And its inaugural development has been in the works for a couple of years.
“We bought the note of an assisted living facility and foreclosed on it back in November 2010,” says Gary Holloway, Jr., president of GMH Capital Partners. “It had been taken back a couple of times and ended up with Bank United. The original developer ran out of money, so it had never taken occupancy.”
GMH acquired the note for about $4 million in an-all cash deal. While much of the development was complete, the company changed the floor plans dramatically. Originally, the former developer mapped out 140 units for the assisted living facility, but GMH plans to significantly expand each unit and cut that unit-count in half.
GMH purchased its first student housing community in 1986, when the perception of that market was more “Animal House” than “viable business model.” From there, it amassed more than 60,000 beds in 29 states, and sold the student business for $1.4 billion to Austin, Texas-based American Campus Communities.
Just as it did 26 years ago, the company hopes that “Futures” will position it at the forefront of another emerging market segment.
“We want to make this a model—we’ve looked at sites in Connecticut, California and the Midwest,” says Holloway Jr. “It reminds us a lot of the early military or student deals we did—those two were very nichey in the early 90s, everyone thought we were nuts.”
In January, GMH began work on its first student housing project since selling that division in early 2008.