New Senior Investment Group Inc. (NYSE: SNR) announced today that it has entered into an agreement to acquire a 28-property portfolio from affiliates of Holiday Retirement for approximately $640 million.
The portfolio, which includes private-pay independent living communities, contains 3,298 units across 21 states with an average occupancy of 88%, according to the company.
Holiday will continue to operate the portfolio following the closing of the acquisition, which New Senior expects to close in the third quarter, at which time the New York-based real estate investment trust (REIT) will have 152 properties with approximately 18,900 beds across 37 states.
“We are excited to add 28 independent living properties to our portfolio through this accretive acquisition,” CEO Susan Givens said in a statement. “This transaction further increases our industry-leading private-pay senior housing NOI exposure to 91% of our portfolio,” the highest among the publicly traded health care REITs, according to the company.
The Holiday portfolio is expected to generate an initial cash net operating income (NOI) yield of approximately 6.4%, after property management fees.
Acquisition of the portfolio launches New Senior into new territories, adding five states to the senior housing company’s growing portfolio: Arkansas, South Dakota, South Carolina, Hawaii and Indiana.
Just 30 minutes after announcing the acquisition, New Senior also announced the commencement of a public offering of 17.5 million shares of its common stock, intending to use the net proceeds from the offering to fund a portion of the $640 million acquisition, and for general corporate purposes, which may include funding additional acquisitions.
New Senior, which was spun off from Newcastle Investment Corp. (NYSE: NCT), made its first big splash in the senior housing space when it acquired a 17-property portfolio for $435 million from affiliates of Hawthorn Retirement Group, LLC. That portfolio, consisting of 100% private-pay independent living communities, was also operated by Holiday Retirement.
In April, a sizable Holiday portfolio — 32 independent living communities — was sold to NorthStar Realty Finance Corp. (NYSE: NRF) in a deal quietly announced in a U.S. Securities and Exchange Commission filing.
The properties were acquired from Harvest Facility Holdings LP, an affiliate of Holiday Retirement, for $875 million.
Written by Emily Study