When the Tribune Co. was sold last December in an $8.2 billion buyout led by Sam Zell, the 66-year-old real estate magnate was quietly placing a bet on seniors housing, too.

The same week the Tribune deal closed, Zell's Equity International invested $75 million in two companies that own and operate retirement communities overseas. The move represents Zell's entry into the seniors sector.

“We like the macro fundamentals of the market,” says Christopher Fiegen, chief investment officer at Chicago-based Equity International.

Equity International purchased a 28% interest in Renaissance LifeCare PLC and Sanctuary Residences. Headquartered in London and New Zealand respectively, the companies were founded in 2005 and 2007 by Cliff Cook. He was the founder and former CEO of Metlifecare Ltd., a leading publicly traded retirement village owner/operator in New Zealand.

Renaissance and Sanctuary focus on the development of upscale seniors-only projects that feature for-sale condominiums along with a menu of services, such as healthcare and activities. Twelve projects are on the drawing boards. Half are in the United Kingdom; the others are in Australia and New Zealand.

Equity International, which only buys assets outside the United States, has invested $1 billion in 15 companies since 1999. Net returns have averaged 15% to 20%. Some of the greatest successes, Fiegen says, have come from investments in homebuilders that focus on affordable and middle-income housing in the emerging markets of Mexico, Brazil and China.

Seniors housing is another play in the homebuilding market, Fiegen explains. But unlike the homebuilders where the focus is on new markets, the seniors housing will target mature markets where the population is aging rapidly and seniors-only condos are scarce. "We think that's where the greatest liquidity is," says Fiegen.

From an investment standpoint, seniors housing provides portfolio diversification, Fiegen notes. Risks are low because the projects are located in politically stable areas. The properties are expected to generate returns of around 25%.

Industry observers think the plan could work. "If Zell's track record is any indication, he's probably found a pretty good investment," says Matthew Whitlock, vice president at MMA Realty Capital, a real estate finance company in Salem, Mass.

The new projects will be located in areas where potential customers already live. The idea is to provide an alternative type of housing for seniors who don't want to leave their neighborhood.

Condos will be priced from about $300,000 to $700,000. A senior would typically make an all-cash purchase using the proceeds from the sale of a home.

In the U.K., Fiegen says competition is limited. Assisted living operators such as Sunrise have buildings in the U.K., but few operators offer for-sale condos with services.

One of the first projects to be developed by Renaissance LifeCare will be in London on the Thames River. The mid-rise project features about 45 to 50 units. Another project will be built in Southampton on a 20-acre site formerly occupied by a girl's school.

Fiegen hopes to import the seniors housing model to other places, including perhaps even China. He sees a rapidly aging population there, and growing demand for seniors housing. Customs are changing too. In the wake of a one-child-only policy, fewer adults will be available to care for aging parents. Also, growing wealth gives adult children more options on how to care for their parents.

Equity International is already in talks with its Chinese homebuilding partner to develop buildings for seniors in Chin, says Fiegen. "Smart providers and homebuilders are thinking ahead about the parents of their home buyers."