HealthLease REIT Makes $102M of Senior Housing Acquisitions

Toronto-based HealthLease Properties Real Estate Investment Trust (TSX:HLP.UN) recently acquired seven senior housing properties for more than $102 million.

The Mainstreet-affiliated REIT purchased a four-property portfolio for $49.4 million at a 8.3% cap rate consisting of two skilled nursing facilities and two assisted living communities located in North Carolina, Virginia, and Pennsylvania. The portfolio includes 186 skilled nursing beds and 179 assisted living beds, with an average property age of about seven years.

Saber Healthcare Group triple-net leases and operates the senior living communities.


HealthLease is also acquiring a newly-built senior housing community from Mainstreet Property Group. The purchase price has not yet been determined but will be calculated based on a third-party appraisal and is expected to have a cap rate ranging between 7.5-8.5%.

The property in question is a 100-unit senior housing and care community in Kokomo, Ind. and is a Next Generation Medical Resort developed by Mainstreet. Mainstreet recently announced a crowdfunding initiative to finance new senior living development and has previously sold several properties to HealthLease.

The REIT is additionally purchasing the Continuum II Portfolio for $53.3 million, representing a 7.3% cap rate. The two-property, 283-bed portfolio consists of newly-developed independent and assisted living properties that HealthLease provided mezzanine financing for and committed to purchase once construction was complete.


Continuum Health Care Holdings Ltd. triple-net leases and operates the communities.

The portfolio will be financed by the assumption of outstanding secured property level debt and a portion of net proceeds from a $50 million (CDN) equity offering HealthLease announced in connection with the acquisitions. The other acquisitions will be financed under the REIT’s $250 million secured operating line of credit and net proceeds from the equity offering.

“As we continue to execute on our strategic growth plan, these acquisitions continue to demonstrate the REIT’s ability to acquire high quality, current generation assets on an accretive basis for unit holders,” said Zeke Turner, Chairman and CEO of the REIT, in a statement.

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Once the acquisitions are complete, HealthLease Properties REIT will have a 54-facility portfolio with 5,383 beds.

Written by Alyssa Gerace

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