Senior Housing Investments & Transactions: Sienna Senior Living

Sienna Senior Living Acquires British Columbia Assets for $255 Million

Sienna Senior Living (TSX: SIA), one of Canada’s largest senior housing owners and long-term care providers, has entered into an agreement to acquire a seniors housing portfolio of assets in British Columbia (BC) for $255 million. As part of the deal, Sienna Senior Living also has the option to acquire two newly built senior housing assets.

The portfolio consists of two private-pay independent living properties and six long-term care (LTC) residences with independent and assisted living. The deal includes $1 million for land, with the potential to expand. The acquisition also includes a 50% ownership interest in Pacific Seniors Management General Partnership (PSM), the current manager and operator of the six long-term care properties.

The two independent living properties, Mayfair and Rideau Manor, consist of 223 suites. The six LTC communities consist of a total of 761 beds, including 70 independent living suites, 55 assisted living units and 636 LTC beds. Of these 761 beds, 20% are private pay and approximately 80% are funded through the BC Regional Health Authorities. Occupancy of these properties was approximately 98% as of March 31, 2016.

Sienna’s 50% ownership stake in the operator, PSM, represents a new partnership with the other holder of that company. That partner will continue to be the managing partner of PSM, with Sienna Senior Living taking over the management responsibilities over a two-year period after the closing of the acquisition. Sienna is required to purchase the remaining 50% of PSM in June 2019 for approximately $1.7 million, subject to certain adjustments.

The two properties Sienna has the option to buy have a total of 374 beds and are newly built, state-of-the-art LTC residences. Approximately 10% of these beds are private pay and 90% are funded through the BC Regional Health Authorities. One of these residents, Nicola Lodge, located in Port Coquitlam, began operations in April 2016. The other, Glenmore Lodge, located in Kelowna, is expected to begin operations in the second quarter of 2017. Sienna Senior Living has the option to purchase up to 100% of each property, beginning with an initial 30% interest upon occupancy stabilization plus an additional 20% interest following the fifth anniversary of the closing of the first option. Sienna can then acquire the remaining 50% interest at fair market value following the 10th anniversary of the closing of the first option.

The total deal increases Sienna’s retirement suites by 29% and LTC beds by 11%. The acquisition more than triples the provider’s bed count in the province. The acquisition is being financed through a combination of the assumption of approximately $137 million in existing mortgages with an average interested rate of 3.9% and a weighted average term to maturity of 5.5 years; the issuance of $10 million of shares to an affiliate of the LTC residences named in the deal; and the net proceeds of a $120 million bought deal public offering.

TD Securities is acting as a exclusive financial advisor for Sienna on the transaction, and Goodmans LLP is acting as legal advisor. Greystone represented the seller in the transaction, an undisclosed private equity group.

SLIB Sells $7.7 Million Texas Facility

Senior Living Investment Brokerage, Inc. (SLIB) has sold an independent living and memory care facility in Keene, Texas, for $7.65 million. Matthew Alley of SLIB handled the transaction.

The facility, which was built in 1998 and updated in 2003, consists of 88 units. The property was purchased by a hospital provider that is headquartered in the Dallas-Fort Worth metroplex and owned by funds managed by an investment advisor.

“This was a very complicated transaction with the seller operating under a forbearance agreement with their lender,” Alley said in a statement. “The buyer is a new entrant into the seniors housing industry.”

Blueprint Facilitates Sale of Florida SNF

Blueprint Healthcare Real Estate Advisors facilitated the sale of Eagle Lake Rehabilitation & Care Center, a 59-bed skilled nursing facility (SNF) located in St. Petersburg, Florida. Trent M. Gherardini of Blueprint executed the transaction. The purchase price was $4.9 million, or approximately $83,000 per bed.

Blueprint conducted a marketing campaign on behalf of the ownership. At the time of the sale, occupancy of the facility was stabilized around 90%, with positive cash flow. The buyer is an emerging regional owner/operator looking to expand its presence on Florida’s west coast.

Chicago Pacific Founders Acquires Manor at Middle 

Chicago Pacific Founders (CPF) and its subsidiaries, CPF Living Management and Grace Management, Inc., have acquired Manor at Midville, a 140-unit independent living community located in Tucson, Arizona. The property is CPF’s second acquisition in Arizona. The terms of the deal were not disclosed.

The community is a multi-story, multi-building community located in a residential and retail area in southwest Tucson, just west of Tucson International Airport.

The community, CPF’s eighth, will be managed by Grace Management, a senior housing management, marketing and operational consulting services firm.

Vitus Acquires $10.4 Million Miami Beach Senior Housing Complex

FFMB Housing Partners, an affiliate of Vitus Group, has acquired The Four Freedoms House, an affordable senior housing complex in Miami Beach, for the purchase price of $10.39 million. The acquisition is the first Florida property for Vitus.

The deal includes $2 million in seller financing and a $9.64 million senior loan from Citibank. The complex consists of 210 units and was acquired from non-profit Four Freedoms House of Miami Beach Inc.

Vitus is a specialist in affordable housing, and all residents are expected to remain in the complex. The Four Freedoms House units serve low-income seniors, 85% of which benefit from a Housing Assistance Payment contract with HUD. Vitus secured funds from the Miami Housing Authority to subsidize rent. Residents pay an average of $330 in monthly rent. Vitus is also in the process of installing a new cooling system at the property, which dates back to 1965.

Written by Amy Baxter