Sunrise Senior Living Investments, Inc. (SSLII), a wholly-owned subsidiary of Sunrise Senior Living (NYSE:SRZ), has completed two buy-outs of joint venture holdings for a total $171 million, according to an 8-K filed Wednesday.
On Oct. 1, 2012, SSLII completed its approximately $53 million purchase of an 80% interest held by HVP Sun Investor II LLC, an affiliate of an institutional investor, in Sunrise HBLR, LLC for a four-property senior living portfolio.
The Sunrise subsidiary now owns 100% of the equity interests in the HBLR joint venture in a transaction pursuant to an Aug. 21 purchase and sale agreement.
SSLII completed another previously-announced purchase of a 75% interest held by HVP Sun Investor LLC, an affiliate of an institutional investor, in Metropolitan Senior Housing LLC, Sunrise Lafayette Hills Assisted Living, L.P. and Sunrise Paoli Assisted Living, L.P. for a portfolio of 12 senior living communities.
The purchase price for the acquisition was approximately $118 million, and SSLII now owns 100% of the equity interests in the Metropolitan Senior Housing joint venture. The purchase agreement was originally announced on Aug. 21.
Accelerated joint venture buy-outs have increased the real estate value of Health Care REIT’s acquisition of Sunrise from about $1.9 billion to $3.2 billion, the REIT announced in September.
SSLII funded the purchases after entering into an approximately $467 million credit agreement with Health Care REIT, Inc. (NYSE:HCN) and borrowed $359 million in term loans under the agreement. The Sunrise subsidiary also used the loan to repay existing mortgage debt on the Metropolitan Senior Housing facilities.
Sunrise plans to borrow up to an additional $105 million under the Health Care REIT Credit Agreement no later than Dec. 31, 2012 to finance the acquisition of another JV buy-out and the repayment of existing mortgage debt on the Sonning and Beaconsfield facilities, conditional on the contemporaneous purchase of the equity interest.
The outstanding term loans under the agreement with HCN bear an interest at one-month LIBOR plus 5.00% and mature on Dec. 31, 2013.
Written by Alyssa Gerace