Griffin-American Healthcare REIT II announced today it will expand its international presence through a $450 million investment in a 44-property United Kingdom-based senior housing portfolio.
The Newport Beach, Calif.-based REIT currently owns 59 assisted living and skilled nursing communities stateside as well as medical office buildings and hospitals.
The expansion into the U.K. includes properties in England, Scotland and the Channel Island of Jersey for a total of $447.8 million, concentrated in England’s South East region.
Of the UK Senior Housing Portfolio, 52% of its year-end 2012 revenue came from private pay residents; higher than the national average of 32%, the REIT noted. The REIT plans to expand globally with the U.K. investment marking one milestone toward that goal.
“Upon completion of this acquisition, Griffin‐American Healthcare REIT II will add a significant international presence to an already extensive national footprint, creating one of the largest and best diversified healthcare REITs in the world in terms of geography, revenue sources and asset types,” said Jeff Hanson, chairman and CEO of the REIT.
Upon the deal closing, expected in the third quarter, the REIT’s portfolio will exceed $2.0 billion based on aggregate purchase price, he said.
The senior housing portfolio will be leased to Myriad Healthcare Limited, operating as Caring Homes, under 35-year absolute net leases with annual rent escalations, the REIT stated. Griffin-American Healthcare REIT II will also provide financing for construction of new senior housing developments it will acquire upon meeting occupancy and rent coverage ratio thresholds. Those properties will be leased back to Myriad Healthcare.
“This will be a transformational event for our company with a partner which is as committed to growth in the private pay market as we are,” said Paul Jeffery, CEO of Myriad Healthcare Limited. “
Myriad Healthcare is one of the largest operators of senior residential care homes in the UK, operating 136 care homes and spanning 3,382 beds in elderly care and specialist learning disability care.
Upon the acquisition, the UK Senior Care portfolio will add 962,000 square feet and 2,163 beds to Griffin-American’s portfolio which currently comprises 174 buildings acquired for $1.56 billion, across 28 states including medical office buildings, skilled nursing facilities, hospitals and seniors housing.
Written by Elizabeth Ecker