Senior Housing Properties Trust (NYSE: SNH) announced it has agreed to purchase nine senior living rental communities for $478 million from Vi as Classic Residence by Hyatt.
As part of the deal, SNH assumed $164 million of mortgage debt on certain communities.
The nine communities include 2,226 living units: 1,708 independent living apartments, 471 assisted living suites and 47 suites where specialized Alzheimer services are provided; and they are located in six states: four in FL and one each in MD, NV, NJ, NY and TX. According to SNH, the communities are 87% occupied.
“SNH believes these nine communities are market leaders in the quality of service offered to residents,” said David J. Hegarty, President of SNH. “Like the large majority of all senior living communities owned by SNH and operated by Five Star, one hundred percent (100%) of all the revenues at these communities are paid by residents from their private resources. We are pleased that SNH and Five Star will be able to continue the high quality services to the residents of these communities.”
After the close of the deal, eight of the communities will be leased to a taxable REIT subsidiary of SNH and all nine communities will be managed by Five Star Quality Care (NYSE: FVE). SNH currently expects that the combined cash flows it may realize from these nine communities in its first year of ownership will equal approximately 7% to 7.5% of SNH’s combined purchase prices.
SNH currently expects to fund these purchases using cash on hand, drawings available under its unsecured credit facility and by assuming approximately $164 million of mortgage debts.
The company expects the deal to close in the fourth quarter.