High-end Dallas retirement community’s financial woes worry investors, landlord

The financial health of Edgemere, one of Dallas’ premier retirement communities, is being threatened by falling occupancy levels and an expired deal with its landlord and bondholders that allowed it to delay making monthly payments since October. Edgemere’s own financial disclosures, along with independent examinations by an investment firm hired by the landlord and a major credit rating agency, document the luxury senior living community’s dire cash position. The company that operates the community — where independent living residents pay entrance fees of as much as $1.4 million — recently alerted bond investors that it had fallen far below a requirement to keep 150 days of cash on hand, according to a filing with Electronic Municipal Market Access. EMMA is a service of the Municipal Securities Rulemaking Board, which protects investors, state and local governments and the public interest.

As of Dec. 31, Edgemere said it had only 62 days’ worth of cash — or enough to stretch through March 3. Compounding the risk is an expired forbearance agreement with Dallas-based Intercity Investment Properties Inc., which owns the 16 acres of North Dallas land wedged between Preston Hollow and University Park where Edgemere opened its doors in 2001. That agreement allowed Edgemere to delay payments of monthly rent, as well as interest and principal on its $109 million of outstanding debt, according to Edgemere’s 2021 financial report. “It’s unfair and unjust for Edgemere to continue to take deposits from future residents under current circumstances,” said Coe Schlicher, CEO of Kong Capital, an Austin-based real estate private equity firm that specializes in strategic investments in senior housing. Intercity Investment hired Schlicher’s firm to help it find a solution, considering that a financial failure of Edgemere could affect the living situation and health of hundreds of seniors, he said. The 1.55-million-square-foot facility contains 304 independent living apartments, 113 assisted living suites and 87 nursing beds. “I fear the residents are on a sinking ship and some of them may not even know it,” Schlicher said.