Brookdale Senior Living, Inc. (NYSE:BKD) announced on Feb. 14 that it had recently completed the acquisition of nine senior living communities with a total of 1,295 units for an aggregate purchase prices of $121.3 million, as well as customary transaction expenses.
Brookdale previously operated these communities, which were under long-term leases accounted for as operating leases.
“Acquiring these communities gives us the opportunity to move forward with renovating and repositioning these assets to improve their financial performance,” said Bill Sheriff, Brookdale’s CEO, in a statement. “By owning these assets outright, we will capture the assets’ entire value creation potential and preserve important optionality with respect to these assets, including the ability to expand some of these communities if we decide to do so or to dispose of those that many not fit our long-term strategy.”
The transaction was financed with $77.9 million of first mortgage financing, secured by seven of the communities, as $15 million of seller-financing secured by two of the communities. The first mortgage facility has a 10-year term, and 75% of it bears a fixed interest rate of 4.21%, while the remaining 25% has a variable interest rate of 30 day LIBOR plus a margin of 276 basis points. The $15 million mortgage loan has a two-year term with a fixed interest rate of 7%.
In addition to this transaction, Brookdale announced that it obtained a $63 million first mortgage loan, secured by one of its communities. The loan as a five-year term with a variable interest rate of 30 day LIBOR plus 300 basis points. In connection with this transaction, the senior living provider repaid a $62.8 million first mortgage loan that was scheduled to mature in 2013; the refinancing represents another step in Brookdale’s plan for addressing its 2013 debt maturities.
Written by Alyssa Gerace