Care Investment Trust Inc. (OTCQX:CVTR) announced on Friday it had entered a joint venture with affiliates of Calamar Enterprises, Inc., owned 75% by affiliates of Care and 25% by affiliates of Calamar, for the acquisition of two senior apartment communities from affiliates of Calamar valued at $23.3 million.
Simultaneously with the acquisition, Care entered into a 10-year management agreement with affiliates of Calamar to manage the two properties, which were both developed by Calamar within the last five years and had an average occupancy above 95% as of December 2012.
Calamar, a full-service real estate firm comprised of construction, development, property management, and finance and investment divisions, contributed the properties to the joint venture in exchange for its 25% ownership interest, and Care funded its 75% portion of its equity investment with cash on hand. The joint venture, through subsidiaries, assumed two loans with an aggregate principal balance of approximately $18.3 million, provided by Liberty Bank.
The two senior housing apartment communities are in Western New York and have an aggregate 202 units that are “well-positioned for high occupancy and consistent financial performance within their communities,” according to Care.
The investment trust expects to receive in excess of a 12% cash on cash return in the first year and 100% of net cash flow upon a sale of the properties until achieving a threshold return. Net cash flows are to be shared between Care and Calamar pursuant to a waterfall seth forth in the JV agreement.
Written by Alyssa Gerace