Investors Real Estate Trust ("IRET") (Nasdaq:IRET) (Nasdaq:IRETP) announced that it has completed its acquisition of two limited liability companies that own and operate a portfolio of five assisted living facilities in three communities in Wyoming. The five facilities, located in Casper (two facilities), Cheyenne (two facilities) and Laramie (one facility), Wyoming, have a total of approximately 320 units or approximately 370-380 beds. IRET acquired 100% of the member interests in the owner and operator of these five facilities from LSREF Golden REIT Inc. and LSREF Golden Ops Holdings LLC for a total purchase price of approximately $45 million. The Wyoming assisted living portfolio consists of the Meadow Wind and Park Place assisted living facilities in Casper, Wyoming; the Aspen Wind and Sierra Hills assisted living facilities in Cheyenne, Wyoming; and the Spring Wind assisted living facility in Laramie, Wyoming.
The acquisition price for the portfolio was funded with cash in the amount of approximately $8.87 million, and with the proceeds of a $36.5 million loan from First International Bank and Trust, Watford City, North Dakota. The First International loan has a term of six years, and an initial interest rate of 4.5%. The Company paid an origination fee for the loan of $36,500. The loan is secured by mortgages on the Wyoming properties and is guaranteed by IRET Properties.
As of the closing date of the acquisition, the Wyoming assisted living portfolio is approximately 95% occupied. The acquisition of these facilities increases the assisted living facility portion of IRET’s medical portfolio from 20 assisted living properties to 25 assisted living properties.
IRET plans to begin construction in the next several months of expansion projects at three of the facilities, to add memory care units and additional assisted living units. Current plans are to construct a total of approximately 38 memory care units and approximately 65 additional assisted living units for a total estimated cost of approximately $8.2 million.
IRET’s President and Chief Executive Officer, Timothy Mihalick, commented, "We are very pleased to have closed this transaction, which adds a significant number of assisted living units to our diversified portfolio, in a market with attractive demographics and an economy that has held up well during the current downturn. We are also pleased to put to work for our shareholders a portion of the proceeds we raised in our October 2009 public offering of common shares."