Phorcys Capital Partners

Fund II is targeting $75 million of commitments and builds on Phorcys Capital Partners’ extensive experience investing in distressed and special-situation senior housing. Our strategy combines credit investing, restructuring expertise, and real estate ownership to acquire quality assets through situations that many traditional real estate investors are not equipped to pursue. Our approach begins with sourcing. Rather than relying primarily on broadly marketed acquisitions, we focus on opportunities arising from municipal bond restructurings, bankruptcies, receiverships, distressed financings, and other complex capital structures. Our experience as a creditor and bondholder often provides early visibility into challenged situations and allows us to engage before an asset reaches a conventional sale process, reducing competition and creating opportunities to acquire assets at attractive valuations. We then use our position within the capital structure and restructuring experience to create a path to ownership. This may involve acquiring debt at a discount, providing rescue capital, participating in a restructuring, or credit bidding through a bankruptcy or receivership. Our objective is consistent: acquire newer-vintage, fundamentally sound senior housing communities at substantial discounts to replacement cost, creating both attractive current cash flow and embedded equity at acquisition. Fund I demonstrated this strategy across four senior housing communities acquired through complex or distressed situations. Fund II will leverage the sourcing network, restructuring experience, operating relationships, and transaction infrastructure developed through Fund I and our broader senior housing credit platform. We have recently been selected as the stalking horse bidder on two senior housing communities being acquired through bankruptcy. The communities are approximately 90% occupied, generate meaningful in-place cash flow, and are expected to be acquired at a 12.3% going-in capitalization rate, compared with third-party appraisals utilizing capitalization rates of approximately 8.5%. These investments illustrate a central element of our strategy: acquiring performing assets at distressed valuations because of complexity in the capital structure rather than fundamental problems with the underlying real estate. We expect these acquisitions to seed Fund II in the fourth quarter of 2026. Two existing Fund I limited partners have already committed approximately 20% of Fund II’s target, with both materially increasing their commitments from Fund I.

Fund II will continue Phorcys Capital Partners’ strategy of acquiring high-quality senior housing assets at distressed valuations by leveraging the firm’s experience across municipal credit, restructurings, bankruptcies, and receiverships. Rather than competing primarily for broadly marketed properties, we seek to source opportunities through complex or distressed capital structures, where our experience as a creditor and restructuring investor can provide earlier access and reduce competition. The Fund will focus on newer-vintage, fundamentally sound communities, often with strong occupancy and in-place cash flow, that can be acquired at substantial discounts to replacement cost. Our objective is to create value primarily through an attractive basis and embedded equity at acquisition, supplemented by operational improvements, rather than relying on aggressive growth or exit assumptions.