Senior Housing Investments & Transactions: NorthStar Realty to Sell $3 Billion in Assets

CareTrust REIT Buys $34.4 Million Portfolio in California

CareTrust REIT, Inc. (Nasdaq: CTRE) acquired two senior housing communities and two skilled nursing facilities (SNFs) in California’s Central Valley for approximately $34.4 million. 

The portfolio includes 79 assisted living units and 293 skilled nursing beds. It is currently leased to affiliates of California-based Covenant Care, LLC. Three related but different ownership groups were behind the sale.

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The portfolio is expected to generate an initial cash yield of 9%, based on annual cash rent of $3.1 million under terms of the existing leases, which have a 2019 expiration of their initial terms. The current leases are subject to two five-year extension options, including CPI-based rent escalators.

The acquisition was funded by CareTrust’s $400 million unsecured revolving credit facility. Rob Reis of Marcus & Millichap was the principal broker on the transaction.

“We are very excited toss these four facilities to our California portfolio,” Mark Lamb, CareTrust’s director of investments, said in a statement. “Covenant Care is a highly-regarded post-acute care and seniors housing operator, and the existing leases are exceptionally well-covered.”

NorthStar Realty Selling Nearly $3 Billion in Assets

NorthStar Realty Finance Corp. (NYSE: NRF) is on its way to dispose of nearly 20% of it portfolio of CRE investments in preparation of its three-way merger with Colony Capital Inc. (NYSE: CLNY) and NorthStar Asset Management Group Inc. (NYSE: NSAM). NorthStar Realty, a real estate investment trust (REIT), is a significant owner of senior housing properties. 

The merger, which was announced in June, will create a $17 billion REIT. NorthStar Realty currently has nearly $3 billion in dispositions under contract, including 135 manufactured housing communities for $2 billion to Canada’s Brookfield Asset Management Inc.

The company is also selling a minority interest in its health care real estate portfolio to a foreign institution looking toast up a health care presence in the U.S. Additionally, the REIT is evaluating selling a portion of its medical office building portfolio, and recently struck a deal to sell its interest in 41 real estate private equity funds. As the merger edges closer to finalization, the REIT will continue to evaluate additional dispositions.

“Everything is on the table, from our perspective,” NorthStar Realty CEO Jonathan A. Langer said during the company’s second quarter earnings call with analysts. 

Marcus & Millichap Arranges Two Seniors Housing Sales

Marcus & Millichap arranged the sale of Rosebush Gardens, a 36-unit assisted living community Burlington, Iowa, for $3.7 million.

The owner was a private, local owner. The buyer is a regional owner-operator. The facility is 28,049 square feet and was built in 1999. At the time of sale, the community was 83% occupied.

Ryan Fleming, Eric Bell, Mark Myers, Joshua Jandris and Charles Hilding of Marcus & Millichap represented the seller in the transaction. 

Marcus & Millichap also facilitated the sale of a Sacramento, California-based assisted living and skilled nursing facilityy for $15.6 million. 

Max McCace, an associate with Marcus & Millichap, and Krone Weidler, vice president of investments with Marcus & Millichap, represented the seller, an individual/personal trust. Kent Williams, broker of record, assisted in the closing of the deal. The buyer is a fund manager.

The campus, Gramercy Court, is a 87,256-square-foot facility that sits on 5.39 acres. Assisted living consists of four buildings with 71 units and 85 licensed beds. The three-building skilled nursing part of the campus houses 63 units and 120 licensed beds. The center of the campus is the Hampton Court, which serves as the administrative headquarters, kitchen, dining hall, laundry, classroom, day care and physical therapy.

Blueprint Closes Two Sales 

Blueprint Healthcare Real Estate Advisers has arranged the sale of Wayland Nursing Rehabilitation Center, a 40-bed skilled nursing facility located in Wayland, Massachusetts. The community is 17 miles west of Boston and had a quality payor mix above 60%.

The buyer is a regional owner/operator seeking to expand its existing portfolio. Steve Thomas of Blueprint was the lead advisor on the transaction with support from Tim Cobb.

Blueprint also announced the sale of The Hearth at Greenpint, a 186-unit independent and assisted living community located in Liverpool, New York. The community was sold for $33 million, or approximately $177,000 per unit. The property was originally built in two phases—1992 and 1996.

The community was acquired by Mainstreet Property Group, which is based in Carmel, Indiana, under a sale/lease-back agreement with the current manager, The Heart, a Syracuse, New York-based operator that manages 15 retirement communities in four states.

The community carries the Enriched Housing Program licensure designation granted by New York.

Written by Amy Baxter

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