Senior Housing Investments & Acquisitions: Diversicare, LCB Senior Living, HCN

Diversicare Announces Acquisition of Operations of 2 Ohio Properties

Diversicare Healthcare Services, Inc. (NASDAQ:DVCR), a provider of long-term care services, recently announced the assumption of operations at two facilities in Ohio.

The transaction includes a 142-bed skilled nursing facility in Avon, Ohio, and a 42-bed assisted living facility in Ontario, Ohio. These facilities are expected to contributed in excess of $9 million in annual revenues with initial lease terms of 10 years.

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LCB Senior Living Acquires 2 Vermont Properties For $82.4 Million

LCB Senior Living, LLC has acquired two independent, assisted and memory care senior housing properties in Vermont, totaling 322 cottages and units, at a cost of $82.4 million.

The properties, The Lodge at Shelburne Bay in Shelburne Bay and The Lodge at Otter Creek in Middlebury, were purchased from the Bullrock Corporation of Vermont. Virtus Real Estate Capital provided $25.4 million in joint venture equity, while PNC Bank contributed $57 million in first mortgage acquisition financing. Cushman & Wakefield was the broker for the deal.

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The Lodge at Shelburne Bay has been rebranded The Residence at Shelburne Bay, in keeping with LCB’s community naming convention. The two-building campus includes 191 apartments, and is located along the shores of Lake Champlain. The newly renamed Residence at Otter Creek is situated on a 30-acre campus and includes a main building and several private cottages for a total of 131 residences.

“These two properties are among the finest acquisitions that LCB has made,” said LCB Senior Living CEO Michael A. Stoller in a statement. “They are high-performing assets that yet have tremendous upside, and we’re very fortunate to have obtained them.”

Marcus & Millichap Closes on Assisted Living Facility 

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Commercial real estate brokerage firm Marcus & Millichap recently closed on a 114-bed assisted living facility located in Broward County, Florida, in a $1.65 million transaction.

At the time of sale, the property was running at 80% occupancy, catering to a lower-income demographic.

The facility was originally built in 1965 and had been licensed as an assisted living facility since 1991.

Finance Group Closes First Mortgage Loan for Senior Housing Acquisition

MidCap Financial, a health care-oriented commercial finance company, recently closed a transaction with Capital Health Group to acquire a senior housing facility in Hot Springs, Ark.

The facility is comprised of 20 independent living cottages, 88 assisted living units and 16 memory care units, and was more than 70% occupied.

MidCap Financial provided an $18.8 million first mortgage floating rate loan with a term of up to three years. The facility was taken over by Capital Health Group in 2012 under a lease structure, with operations then turned over to an affiliate company Compass Pointe Healthcare Systems under a management agreement.

The lease structure included a purchase option, which was exercised by Capital Health, with Compass Pointe continuing on as the fee manager.

MidCap’s loan provides time for the facility to stabilize before Capital Health seeks to refinance with long-term fixed-rate debt.

The transaction adds to MidCap’s portfolio of 26 senior housing facilities comprising more than 2,500 beds.

Health Care REIT Makes Big Moves in Senior Housing Acquisition Space

Health Care REIT, Inc. (NYSE: HCN) has agreed to acquire HealthLease Properties REIT (TSE: HLP.UN) in a deal valued at $950 million, and entered into a partnership with Mainstreet Property Group in a transaction that represents a combined potential $2.3 billion investment.

HCN also completed an 11-property senior housing portfolio acquisition in Southern England from Gracewell Healthcare for £153 million (USD$257 million) in cash.

Separately, Sunrise Senior Living, in which HCN owns a 24% interest, has acquired Gracewell’s management company and will manage the portfolio. The companies are also partnering on a pipeline of future development that will be owned by HCN and spans another 11 properties in the near term.

The private-pay senior living portfolio being acquired includes 767 units in total. The portfolio is expected to achieve an 8% NOI yield once stabilized and is owned by Health Care REIT under a RIDEA structure.

In HCN’s deal with HealthLease and Mainstreet, the REIT will acquire 53 senior housing and health care properties currently owned by HealthLease, and 17 Mainstreet communities along with the Indianapolis-based developer’s 45-property pipeline.

HCN will acquire the outstanding units of HealthLease for CAD$14.20 (US$13) per share on a fully diluted basis in an all-cash transaction. The acquisition will bring to HCN’s portfolio 53 senior housing, post-acute care and long-term care communities that are managed by existing operators under long-term triple-net lease agreements. Mainstreet Property Group is the external management company for the portfolio.

HCN will acquire the 17 Mainstreet properties for approximately $369 million with a 2.5% initial cash yield. The REIT’s acquisition of Mainstreet’s 45-property pipeline will represent a $1 billion acquisition at a 7.7% cash yield. In total, the transaction represents a potential $2.3 billion investment at a 7.4% blended initial cash yield.

Written by Emily Study

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