Newcastle Reveals New Details for Senior Housing REIT Spin-Off

Today, Newcastle Investment Corp. (NYSE: NCT) released new details regarding its previously announced senior housing real estate investment trust (REIT), including a completion date and investment plans for the new senior-housing specific REIT. 

After months of speculation and a confirmation in June, New Senior Investment Group, Inc. (NYSE: SNR) is on track to become a standalone public company November 6, according to an investor presentation from Newcastle released Friday morning.

Under completion of the spinoff, New Senior Investment Group will join the league of the publicly-traded healthcare REITs with a focus specifically on senior housing. Meanwhile, Newcastle will continue to be an “opportunistic REIT” with a legacy real estate debt portfolio and a golf platform, the company stated. 

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Today, New Senior has a $1.9 billion senior housing portfolio with $829 million of equity, which includes $619 million of invested equity and $210 million of investible cash. Included in the REIT’s portfolio are 42 managed properties and 57 triple-net leased senior housing properties.

Breakdown of the 57 leased properties include 51 leased to Holiday and 6 where Des Moines, Iowa-based operator LCS is the tenant. Of the managed properties, New Senior manages 20 Holiday properties and 22 properties for Blue Harbor Senior Living, Portland, Oregon-based operator owned by Fortress Investment Group (NYSE: FIG).

These 99 properties are located across 27 states, with 69% of them in “premium” locations, which Newcastle defines as located in a top 31 metropolitan statistical area or located on the country’s east or west coast. The portfolio comprises over 90% independent and assisted living properties. Managed properties represent 38% of the portfolio, while 62% are triple-net leased. 

The REIT is managed by an affiliate of Fortress, which has a long track record of investing in the senior housing sector, including investments in Brookdale Senior Living (NYSE: BKD) in 2000 and Holiday Retirement in 2007. 

In December 2013, Fortress acquired 52 properties from an affiliate of Holiday for approximately $1.04 billion in total transaction costs. 

It is expected that shares of Newcastle common stock will begin trading on a split-adjusted basis on October 23. Additionally, The New York Stock Exchange has established three trading markets related to the spin-off.

In the “when issued” market (NYSE: SNR WI), New Senior shares will trade, subject to settlement after the distribution.

In the “ex-distribution market” (NYSE: NCT WI), Newcastle shares will trade on a split-adjusted basis excluding the right to the distribution of New Senior Shares, while in the “regular way” market (NYSE: NCT), Newcastle shares will trade on a split-adjusted basis including the right to the distribution of New Senior shares.

On the first trading day following distribution (Nov. 7), New Senior will begin regular-way trading on the NYSE under the ticker symbol “SNR,” while Newcastle will resume trading ex-distribtion under “NCT.”

Written by Jason Oliva

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