New Senior Investment Group Inc. (NYSE: SNR) is expanding its portfolio upon the completion of the company’s previously announced $435 million acquisition of senior housing properties from affiliates of Hawthorn Retirement Group, the company announced Monday.
New Senior is acquiring 17 independent living senior housing properties. The portfolio is 100% private pay, contains 2,082 units located across 10 states and had an average occupancy rate of 92.6% for February 2015.
The portfolio will be operated by Holiday Retirement, and New Senior expects the portfolio to generate an NOI yield of approximately 6.3%, the company said in a statement. The acquisition was funded with cash on hand and proceeds from a first mortgage loan.
New Senior also completed a $670 million first mortgage loan secured by 52 senior housing properties with Freddie Mac through Walker & Dunlop. The loan bears interest at LIBOR + 234bps and has a seven year maturity.
Proceeds from the loan were used to refinance existing floating rate debt and to fund acquisitions, including the Hawthorn acquisition, New Senior said.
”We are excited to add to our portfolio this collection of high-quality, independent living senior housing assets, which will further increase our private pay exposure,” New Senior Chief Executive Officer Susan Givens said in a statement. “With an average asset age of seven years and strong occupancy of 92.6%, we expect continued strong growth from this portfolio.”
With New Senior’s $670 million financing with Freddie Mac, the company continues to make progress toward improving its capital structure, Givens said.
“The financing was executed at a very attractive rate and lowers the financing cost on our existing debt while also providing attractive financing terms for our new acquisitions,” she said.
Written by Cassandra Dowell