Senior Housing Acquisition and Investment Round-Up (9/16/2012)

The international senior living scene is heating up, and developers and investors in other countries are making moves to prepare for the impending wave of baby boomers. Here are a few stories from around the globe, ranging from nearby Canada to India to New Zealand, along with a couple smaller, local deals by American senior healthcare providers and investors. 

Aviv REIT Acquires Idaho Skilled Nursing Facility for $6 Million

Aviv REIT recently acquired a post-acute and long-term care skilled nursing facility located in Idaho for $6 million. The real estate investment trust will triple-net lease the property to Safe Haven Health Care, an existing tenant since 2008.

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Safe Haven operates 12 skilled nursing and assisted living facilities in Idaho, two of which are now leased from Aviv. The triple-net lease has a 7-year term, an initial cash yield of 11%, and annual compounded escalators of 2%.

The transaction closed on Aug. 31 and was funded with cash on hand.

“We are excited to add another property to our relationship with Safe Haven,” said Craig M. Bernfield, chairman, CEO, and president of Aviv. “Our pipeline remains active and we continue to source a significant amount of investment opportunities from existing tenant relationships.”

Gentiva Acquires Miss. Hospice Provider

Gentiva Health Services, Inc. (NASDAQ:GTIV) announced on Tuesday it had acquired North Mississippi Hospice, based in Oxford, Miss., for an undisclosed sum.

The provider was founded in 2006 and has offices in Tupelo, Oxford, and Southaven, Miss.

“This transaction enables us to expand our geographic coverage in Mississippi and is consistent with our strategy of adding high quality, clinically focused hospice providers that make strategic sense and complement our organic growth initiatives,” said Gentiva CEO Tony Strange in a statement.

Gentiva is funding the transaction from its cash reserves; it is not expected to have a material impact on the home health and hospice provider’s financial results. 

Amica Acquires Remaining Ownership Interest in Ontario Senior Care Community

On Sept. 1, 2012, Amica Mature Lifestyles, Inc. acquired an additional 90% ownership interest in Amica at Bearbrook, an Ottawa, Ontario senior living community, for approximately $12.1 million.

The company now owns the property outright. 

“We are very pleased to increase our ownership in Amica at Bearbrook”, said Samir Manji, Amica’s Chairman, President and CEO. “Amica at Bearbrook represents a legacy community from our early years in the industry. It is located in a very competitive market in suburban Ottawa and underwent a major capital renovation in recent years. With a strong focus and commitment from our team, operational changes and the capital renovation undertaken, Amica at Bearbrook’s occupancy and operating results have improved and are expected to further strengthen in the months ahead.”

The purchase price included a $1.6 million cash consideration, the assumption of the vendors’ share of third-party mortgages on the property of $6.9 million, loans payable to Amica of $3.2 million and other net liabilities of about $0.4 million. The third-party mortgages consist of a $3.7 million first mortgage insured by the Canada Mortgage and Housing Corporation with an interest rate of 3.22% which matures April 2014, and an open demand $3.9 million second mortgage, non CMHC-insured, at an interest rate of prime plus 3%, also with an April 2014 maturation date.

Amica at Bearbrook as 101 suites and is currently at 95% occupancy, which is expected to increase to 96% based on net pending move-ins anticipated to take place in the next several weeks. 

Based on budgeted fiscal net operating income, Amica estimates an approximately 7.5% cap rate on the acquisition. 

Metlifecare Sells Retirement Community to Competitor for $9.4 Million

Metlifecare, an Auckland, New Zealand-based retirement community operator, recently sold one of its sites to rival Bupa Care Services New Zealand for $9.4 million (NZ), reports The National Business Review.

Ilam Park is located in Christchurch and its sale is “in line with Metlifecare’s plan to shift its focus to the North Island” as part of a merger transaction with Vision Senior Living and Private Life Care that took place in July, says the article. The settlement will take place on Sept. 27. 

“Our emphasis is on the premium Auckland, Waikato, and Bay of Plenty markets and we have a number of excellent greenfield and brownfield opportunities in the pipeline in these areas,” said the company’s managing director Alan Edwards. 

India Realty Firm to Invest $104 Million in Senior Housing Projects

Covai Senior Care Constructions of Coimbatore, India plans to invest $104 million into retirement community developments across South India, reports World Property Channel. The company is currently working on seven projects in those locations which are expected to be completed in about three years.

The demand for senior living accommodations has been “growing consistently” in the last two years, according to Covai’s director of finance and strategy. The company has gotten about 5% of its funding from equity contributed by a U.S. investor, and raised another 5% through debts. It is currently in the final stages of its fundraising plan. 

The projects are located in Bangalore, Chennai, Puducherry, and Coimbatore, with another project planned for Kancheepuram.

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