Senior Housing Investments & Acquisitions: Sabra, Aviv REIT, NHI

SQLC Announces Completion of Land Acquisition 

Senior Quality Lifestyles Corporation (SQLC), a Dallas-based nonprofit developer of senior living communities, has announced the completion of the land purchase for expansion of The Buckingham, a 501(c)(3) nonprofit life care community located in the Memorial neighborhood of Houston.

The land acquisition consists of six acres adjacent to the community. Financing for the land was completed through the sale of $18.575 million in series 2014 bonds, which will also be used to provide funds for funding pre-development costs and the removal of the existing buildings on the acquired land.

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Ziegler Capital Markets served as bond underwriter for the transaction.

The total project cost is estimated to be $56 million and the community will receive a separate bond issuance in 2015 to finance the construction. Once completed, the expansion will offer an additional 104 independent living apartment homes, 33 assisted living suites, 18 memory care residences and 32 private skilled nursing homes.

“This is an exciting time for our company,” said Jonathan Carrier, vice president of development at SQLC. “Demolition of the current buildings on the six acres we acquired is set to take place at the end of this month, and we expect to break ground late third quarter of 2015.”

Titan SenQuest Senior Living Acquires 2 Texas Properties

Titan SenQuest Senior Living, the senior housing arm of Los Angeles-based Titan Real Estate Investment Group, Inc., has added 116 units in two properties to its senior living portfolio that the company is building in Texas.

The senior communities are Governor’s Ridge Retirement & Assisted Living in Decatur, the county seat of Wise County and part of the Dallas/Fort Worth metroplex, and the Redstone Park Ridge Retirement & Assisted Living in Brownwood, the county seat of Brown County, Texas.

Governor’s Ridge is a community for seniors with an active lifestyle, offering a total of 57 units that range from independent living to assisted living. At the time of purchase, Governor’s Ridge was 98% occupied.

With fully trained, 24-hour staff onsite, the Redstone Park Retirement & Assisted Living Community offers three levels of care, each with comprehensive services and amenities designed to create an enriching lifestyle for seniors at every level of activity. Its 59 units were 86% occupied at the time of purchase.

Purchase prices were not disclosed.

Prestige Group Announces Sale of Assisted Living Facility

The Prestige Group Realtors, a real estate broker, recently announced the sale of Gracious Living Estates, a 65-bed assisted living facility situation on abou24 acres in Montrose, Penn.

The firm found a buyer from Southern California, whose name was not disclosed. The buyer purchased the facility as well as all sub-surface rights including royalties to all oil, gas and minerals.

Prestige Group handled the transaction.

Griffin-American Healthcare REIT III to Acquire MOB Portfolio for $135 Million

Griffin-American Healthcare REIT III, Inc., has entered into an agreement to acquire Independence Medical Office Building Portfolio for an aggregate purchase price of approximately $135 million.

The portfolio is comprised of five buildings totaling 461,000 square feet in New York, N.Y.; Verona and Morristown, N.J.; Somerville, Mass.; and Southgate, Ky.

“The acquisition of Independence Medical Office Building Portfolio will significantly expand Griffin-American Healthcare REIT III in core urban areas located near major academic and healthcare institutions,” said Danny Prosky, a principal of American Healthcare Investors and president and chief operating officer of Griffin-American Healthcare REIT III. “The portfolio is strongly aligned with major healthcare providers and is more than 96 percent occupied.”

Earlier this month, Griffin-American Healthcare REIT III also entered agreements to acquire Premier Medical Office Building, a 45,000-square-foot medical office building in Novi, Mich., for approximately $12 million; The Merion Building, a 73,000-square-foot medical office building in King of Prussia, Penn., for approximately $19 million; and Mount Olympia Medical Office Building Portfolio, comprised of three medical office buildings in Columbus, Ohio, Mount Dora, Fla., and Olympia Fields, Ill., for approximately $16 million.

Aviv Acquires 2 Skilled Nursing Facilities in Dallas for $28.5 Million

Prior to its agreement to merge with Omega Healthcare Investors (NYSE: OHI), Aviv REIT (NYSE: AVIV) announced it had acquired two skilled nursing facilities in Dallas, Texas, for $28.5 million.

The properties are triple-net leased to existing Aviv operator Fundamental at an initial cash yield of 9%, for a term of 10 years. Fundamental operates 77 facilities in eight states, 19 of which they lease from Aviv.

“We have already closed over $400 million of acquisitions this year and our deal flow is as strong as ever, with attractive opportunities we are actively sourcing through our extensive network of industry contacts, including our operator relationships,” said Craig M. Bernfield, chairman and CEO of Aviv. “This off-market acquisition was sourced by Fundamental and brought exclusively to us because of our relationship. Fundamental has become our fourth largest operator in less than two years and we intend to continue to grow our relationship with them.”

Nonprofit Acquires Florida Property for $14 Million, Eyes Affordable Senior Housing

Sunrise, Florida-based nonprofit Elderly Housing Developing & Operations Corp. (EHDOC) has acquired a senior living tower on Miami’s Brickell Avenue for $14 million.

The property sits on 3.2 acres along Biscayne Bay, and is being maintained for affordable senior housing.

Stanley Axlrox UTD Towers, an affiliate of United Teachers of Dade, sold the 269-bed tower to 1809 Brickell LP, an affiliate of EHDOC. The buyer assumed a $567,528 loan from the U.S. Department of Housing and Urban Development.

EHDOC owns dozens of affordable senior living facilities nationwide, and it’s also an advocate for seniors’ rights.

CareTrust REIT to Acquire 3-Property AL and Memory Care Portfolio

CareTrust REIT, Inc. (NASDAQ: CTRE) recently announced that it has agreed to acquire a three-facility assisted living and memory care portfolio from Cross Healthcare, LLC, an Idaho assisted living and senior housing operator.

The portfolio includes 90 units and is being purchased for $12 million; the three properties will be leased back to Cross affiliates under a triple-net master lease agreement.

“This transaction allows us to use some of the equity we’ve created at Cross to restructure our ownership, and clears the way for our next wave of growth,” said Cross CEO Ryan Rasmussen, noting that the company already has two additional projects underway. “CareTrust came to Idaho, immediately understood what we needed and offered us an arrangement that we could use as a platform to expand our business into adjacent markets.”

The investment carries an initial cash yield of 8.5% on EBITDAR lease coverage of 1.31x, producing initial annual lease revenue of $1.02 million. The lease carries a term of 12 years with two five-year renewal options and provides for annual CPI-based rent escalators.

The three facilities, located in Pocatello and Idaho Falls, Idaho, have an average age of eight years and are 92% occupied. The agreement also includes rights for CareTrust to acquire three additional Cross assets, two of which are currently undergoing renovation, lease-up and stabilization, at fixed-formula pricing, and one of which is a new development.

Sabra Acquires Transitional Care Portfolio for $41 Million

Sabra Health Care REIT, Inc. (NASDAQ: SBRAP) announced recently two investments: the acquisition of a portfolio of three transitional care facilities in Oklahoma and the exercise of its purchase option on a skilled nursing facility in Austin, Texas.

On Oct. 29, Sabra acquired three transitional care facilities with a total of 171 available beds located in eastern and central Oklahoma for $41 million. Concurrently with the purchase, the REIT entered into a triple-net master lease agreement with affiliates of the seller.

The lease has an initial term of 10 years with two five-year renewal options and provides for an annual rent escalator equal to 3% resulting in annual lease revenues, determined in accordance with GAAP, of $4 million and an initial yield on cash rent of 8.5%.

On Oct. 21, Sabra completed the purchase of a 125-bed skilled nursing facility (Onion Creek) located in Austin, Texas, for $14 million. Sabra previously entered into an $11 million mortgage loan agreement secured by a first trust deed on Onion Creek with affiliates of Meridian Equity Investors, L.P.

At closing, approximately $11 million of the sales processes were used to repay the Onion Creek Mortgage Loan, resulting in Sabra funding approximately an additional $3 million for the acquisition.

The facility opened in 2011 and is operated by Senior Care Centers, LLC, which operates nursing facilities throughout Texas. The lease, which Sabra assumed at closing, has 10 years of initial term remaining with three five-year renewal options and provides for an annual rent escalator equal to 2.75%. The lease results in annual lease revenues determined in accordance with GAAP of $1.4 million and an initial yield on cash rent of 9%.

“The facilities in the Oklahoma Portfolio are transitional care skilled nursing facilities. In our view, they represent where the model is going with primarily private rooms servicing short stay post-surgical patients with revenues that are almost entirely Medicare and managed care,” Rick Matros, CEO and Chairman, said. “Onion Creek, a beautiful new skilled nursing facility, was one of our first transactions with Meridian and led us to partner with them on our development pipeline. We bring in two quality management teams with these investments as we continue to expand our tenant base.”

NHI Acquires Assisted Living Community for $5.65 Million

National Health Investors (NYSE: NHI) announced recently the $5.65 million acquisition of an assisted living community in greater Portland, Ore.

Substantially renovated and remodeled in 2012, the 25-unit community is 94% occupied, private-pay backed and generates approximately $4,400 in revenue per unit per month.

The community will be leased to existing operating partner Chancellor Health Care, LLC for 15 years with two 10-year renewal options with an initial cash yield to NHI of 8%, plus 3% annual fixed escalators.

The lease yield for accounting purposes is 9.92%. This acquisition expands NHI’s relationship with Chancellor to four communities. The purchase was funded from borrowings on NHI’s revolving credit facility.

Brokerage Facilitates Sale of Personal Care Community for $3.1 Million

Senior Living Investment Brokerage, Inc. has facilitated the sale of Country Gardens, a 40-unit personal care community in Union City, Ga., for $3.1 million.

The purpose-built asset was constructed in 2000 and is approximately 26,800 square feet. The asset was sold at the direction of the court-appointed receiver.

Senior Living Investment Brokerage represented the receiver, GlassRatner, in the sale.

Oak Senior Living was the management company operating the asset throughout receivership. By the close of escrow, census had improved to 38 residents and $106,275 in monthly revenue.

The buyer was Chicago-based Gryphon Senior Living and their related operating company, Senior Solutions Management Group. Acquisition financing was provided by Community Southern Bank.

Written by Emily Study

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