Mainstreet-Affiliated REIT Acquiring $142 Million Senior Housing Portfolio

| March 25, 2013

Mainstreet Property Group announced today that the board of trustees of its affiliated REIT has approved the acquisition of 13 senior housing and care properties.

HealthLease Properties Real Estate Investment Trust (TSX: HLP.UN) will acquire properties located in North Carolina, Pennsylvania and Virginia totaling 978 beds for an aggregate purchase price of $141.7 million. 

The acquisition properties include four skilled nursing facilities of 355 units, eight assisted living/Alzheimer’s facilities of 563 units, and one stand alone Alzheimer’s facility of 60 units. 

“The acquisition of these newly-built or newly-renovated properties greatly enhances our scale and diversification with respect to health care product mix and geography, in addition to lowering the average age of our portfolio properties to approximately 6 years,” said Zeke Turner, chairman and CEO of Mainstreet and HealthLease. 

Six of the facilities will be managed by Meridian Senior Living. Headquartered in Hickory, NC., Meridian is a national operator of 91 facilities across 12 states. 

Seven facilities will be managed by Saber Healthcare Group, LLC. Saber is based in Bedford Heights, Ohio and operates 56 facilities across six states. 

The acquisition properties have a weighted average lease term of 10.5 years. 

When the acquisition has been completed, HealthLease Properties REIT’s portfolio will increase to 28 facilities comprised of 2,909 units spanning five states and two Canadian provinces. 

The addition of Meridian and Saber to manage the newly-acquired properties will bring the REIT’s operator relationships to a total of 11. 

Additionally, the acquisition will diversify the REIT’s portfolio as it will consist of 57.8% skilled nursing/long-term care units, 37.6% assisted living/memory care units, and 4.6% independent living units.

HealthLease is also replacing its current operating line of credit with a new $110 million line, of which $83.8 million will be drawn on at closing to partially fund the acquisition, the company announced. 

“We are pleased to be able to expand our operating line and add additional flexibility to our balance sheet as a part of this transaction,” said Adlai Chester, CFO of Mainstreet and HealthLease, “Doing so allows us to be even more responsive to any acquisition opportunities we see in the marketplace.”

Written by Jason Oliva


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Category: Acquisitions, Finance, REIT, Senior Housing, Senior Living

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