HCN Buys 80% Interest in UK Senior Housing Portfolio from Bankrupt Investment Firm

Arcapita ARCAB.UL, a Bahrain-based investment firm, announced on Monday it had sold its 80% interest in a joint venture controlling five senior care communities in London to Health Care REIT (NYSE:HCN), the firm recently announced. 

The remaining 20% interest is owned by Sunrise Senior Living (NYSE:SRZ), which is being acquired by Health Care REIT. Once the transaction closes, the Toledo, Ohio-based REIT will acquire the remaining interest in the properties. 

Arcapita is in the midst of a Chapter 11 bankruptcy process that began in March 2012 due to pressure from hedge funds to repay a $1.1 billion sharia-compliant loan facility, according to Reuters. The Middle Eastern firm had invested in the senior housing portfolio in 2003 through a joint venture with an affiliate of Sunrise.


Although the dollar amount of the transaction was not disclosed, Arcapita’s chief executive officer indicated in a statement that the investment had delivered a favorable return.

“The investments have benefited from favorable demographics and their geographic proximity to London. Despite a number of challenges presented by the recent economic slowdown in the United Kingdom, Arcapita’s real estate team worked effectively with our joint venture partner to enhance the performance of the portfolio, delivering approximately 2.8 times cash on cash return for our investors over the holding period of the investment and exceeding initial target returns,” said Atif A. Abdulmalik, CEO of Arcapita, in a statement. 

Written by Alyssa Gerace


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