NorthStar Realty Finance to Buy 32 Holiday Properties for $875 Million

In a deal quietly announced in a U.S. Securities and Exchange Commission filing last week, NorthStar Realty Finance Corp. (NYSE: NRF) said it is acquiring a portfolio of 32 independent living communities from affiliates Harvest Facility Holdings LP, an affiliate of Holiday Retirement, for $875 million.

The portfolio of private-pay facilities comprises approximately 3,983 units across communities in 12 different states, New York-based NorthStar said in the SEC filing. A subsequent Benzinga report explained the deal in based on analysis by FBR & Co..

Together, NorthStar Realty Finance Corp. and NorthStar Healthcare Income, Inc., each acting through a subsidiary, intend to create joint venture entities, each of which will be owned 60% by NorthStar Realty and 40% by NorthStar Healthcare.

The joint venture entities also plan to partially finance the acquisition of the portfolio with 10-year, fixed rate debt equal to approximately 70-75% of the portfolio’s cost.

NorthStar Healthcare Income is a public, non-traded real estate investment trust (REIT) formed to originate, acquire and asset manage equity and debt investments in healthcare real estate. It is the wholly-owned broker-dealer subsidiary of NorthStar Asset Management Group Inc. (NYSE: NSAM).

Pursuant to the purchase agreement, NorthStar will acquire the portfolio on or before June 30, 2015 for $875 million.

The transaction is the latest involving various Holiday portfolios within the last year—and one of the largest dollar volumes paid for one of the Lake Oswego-based operator’s portfolios.

Last August, Ventas (NYSE: VTR) completed its $897 million acquisition of 29 Canadian senior living communities operated by Holiday, which have since transferred operations to Atria Senior Living.

The following month, Sabra Health Care REIT (NASDAQ: SBRA) purchased 21 independent living facility from affiliates of Holiday Acquisition Holdings Corp. for a total cash purchase price of $550 million. The portfolio comprised 2,850 units located across 15 states.

In December, New Senior Investment Group (NYSE: SNR) made its first big play in the senior housing sector when it acquired 17-property portfolio totaling 2,082 units for $435 million from affiliates of Vancouver, Wash.-based Hawthorn Retirement Group, LLC—a portfolio that was operated by Holiday at the time of purchase and continues to be today.

Written by Jason Oliva