Senior Housing Investments & Transactions: HCP Completes $1.125 Billion Brookdale Sale

HCP Completes $1.125 Billion Sale of Brookdale Portfolio

Healthcare real estate investment trust (REIT) HCP (NYSE: HCP) completed the previously-announced sale of a portfolio of 64 triple-net assets leased to Brookdale Senior Living, Inc. (NYSE: BKD) to affiliates of Blackstone Real Estate Partners VII L.P. in a deal worth $1.125 billion.

HCP expects to record a gain of approximately $165 million on the sale of the assets and intends to use the proceeds primarily to pay down debt and for general corporate purposes.


“This transaction represents another significant step toward executing on our strategic priorities of reducing Brookdale concentration, improving lease coverage and strengthening our balance sheet and credit profile,” Tom Herzog, CEO of HCP, said in a statement. “We value our relationships with Brookdale and Blackstone and look forward to continuing to work with them.”

Blueprint Closes Several Senior Living Transactions

Blueprint Healthcare Real Estate Advisors sold a portfolio of skilled nursing facilities (SNFs) in Iowa totaling 273 dually-certified beds. At the time of sale, the portfolio was 52% occupied, and had a quality payor mix of approximately 41%. The portfolio generated total revenues and EBITDAR of $8.64 million and $350,000, respectively.
The buyer was a New York-based owner/operator that has an expanding interest in Iowa. Blueprint structured the transaction, which consisted of an interim lease agreement with a purchase option to be executed by the buyer within the next 12 months. Christopher Hyldahl was the lead advisor on the transactions with support from Giancarlo Riso.
Blueprint also sold Grace Woods Senior Living, in a sale involving two seniors housing communities totaling 111 units located 30 miles apart in Northeast Ohio. The seller was an Ohio-based owner/operator that sought to divest two remaining seniors housing assets. The buyer is another Ohio-based owner/operator seeking to grow its footprint in the region.
The purchase price represented an 8.6% cap rate on trailing income. Connor Doherty was the lead advisor on the transaction.
Blueprint arranged the sale of Park Visalia Assisted Living, a 100-unit private pay community located in Central California’s San Joaquin Valley. The property was originally acquired in 2014, when ownership invested in several capital improvement projects and brought in a California-based third part management company to boost occupancy and turnaround operations.
However, occupancy remained consistently below market levels after the first year, and the owner transferred operations to a Midwest-based provider that managed to stabilize key leadership positions and improve occupancy and cash flow.
The seller was a Chicago-based private equity real estate firm that sought to divest the asset due to its remote location from its headquarters and other senior housing assets. The buyer was a privately-held real estate investment company focused and based on the West Coast. Park Visalia is the buyer’s fourth California seniors housing acquisition in the past two years. The buyer plans to remodel the community, including the addition of a memory care wing.
Jacob Gehl, Ben Firestone and Michael Segal were the lead advisors on the transaction.
The Ensign Group Acquires Nevada Assisted Living Facility
The Ensign Group, Inc. (Nasdaq: ENSG), the parent company of the Ensign group of skilled nursing, rehabilitative care services, home health care, hospice care and assisted living companies, acquired the operations of Desert View Senior Living, a 100-unit assisted living and memory care facility in Las Vegas, Nevada. The acquisition was effective March 17, 2017.
160-Year-Old Courthouse Bought for Senior Housing
A Louisiana courthouse, Carrollton Courthouse, has been purchased for $4.7 million, and is expected to be turned into a senior living facility, local news outlet WWLTV reported.
The 160-year-old building was purchased by Carl Mittendorf of Houston, Texas. The property’s owned by the Orleans Parish School Board. The Historic District landmark Commission has jurisdiction over the property to ensure historic preservation, according to WWLTV.
The property includes 1.3 acres and eight structures, according to the news station. Mittendorf also owns the Colonial Oaks Senior Living in Katy, Texas. Mittendorf plans to restore the building.
Tryko Partners Acquires Nursing and Therapy Center in Boston
New Jersey-based Tryko Partners acquired Spaulding Nursing and Therapy Center in Boston, expanding Tryko’s Massachusetts skilled nursing portfolio to 10 properties. The transaction is the private equity investment firm’s first entry into the city proper.
Tryko’s health affiliate, Marquis Health Services, will guide a $4 million program to update the North End property. Tryko purchased the 100-bed SNF from Spaulding Rehabilitation Network, part of the Partners Healthcare System.
M&T Bank provided acquisition financing. Marquis Health Services currently operates 17 facilities totaling more than 2,000 beds.
Senior Housing Properties Trust Forms Joint Venture for Boston Acquisition 
Real estate investment trust (REIT) Senior Housing Properties Trust (NYSE: SNH) has formed a joint venture with a sovereign institutional investor to own a pair class A LEED Gold Certified life-science buildings in Boston. The investor will contribute approximately $261 million for a 45% equity interest in the new venture, and SNH will own the remaining 55% equity interest. The investment amount is based on a property valuation of $1.2 billion, less $620 million of existing secure debt on the property.
SNH acquired the property in May 2014 for $1.125 billion. The two buildings are 95% leased to Vertex Pharmaceuticals, Inc. through 2028 and include 1.1 million rentable square feet of lab, corporate office and street level retail space.
SNH will continue to control the property; the investment partner is a passive financial investor. SNH cannot disclose the identity of the investor in the joint venture under a confidentiality agreement.
Eastdil Secured acted as SNH’s advisor and Sullivan & Worcester LLP provided legal counsel to SNH on the transaction. SNH is managed by the operating subsidiary of The RMR Group Inc., an alternative asset management company headquarters in Newton, Massachusetts.

Written by Amy Baxter


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