Private Equity Firm Acquires Senior Housing Owner Sentio for $825 Million

The senior housing industry has drawn increased interest from private equity investors for some time.

Now, affiliates of real estate private equity investor Kayne Anderson Real Estate Advisors (KAREA) are set to purchase senior housing and medical office owner Sentio Healthcare Properties for $825 million in cash.

The Orlando, Florida-based real estate investment trust (REIT), which is public but not traded and backed by global investment firm KKR, currently has a portfolio of 34 properties in 16 U.S. states. The properties include senior housing communities, skilled nursing facilities, medical office buildings and long-term acute care hospitals.

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The senior housing operators Sentio currently works with include JEA Senior Living, Woodbine Senior Living, Senior Living Residences, 12 Oaks Senior Living, Arrow Senior Living and KR Management, according to a Securities and Exchange Commission (SEC) filing dated March 17, 2017.

Sentio’s senior housing properties are located in Texas, Florida, Indiana, South Carolina, Tennessee, Ohio, Pennsylvania, New Hampshire, Illinois, New Jersey, Massachusetts, Colorado, Missouri, Louisiana and Maryland.

KAREA already owns 34 senior housing communities—comprising 5,554 units—in 10 states.

The transaction is anticipated to close during the third quarter of 2017.

“The addition of the high-quality Sentio assets further solidifies KAREA’s position as one of the largest owners of health care real estate with a strong composition of premier assets,” KAREA Chief Investment Officer David Selznick said in a press release. “This acquisition represents a compelling opportunity for KAREA to create value through property renovations, facility expansions and other operational enhancements.” 

Holliday Fenoglio Fowler, L.P. and Citigroup Global Markets Inc. acted as financial advisors to KAREA, while Hogan Lovells US LLP acted as its corporate legal advisor and Greenberg Traurig, LLP acted as its real estate legal advisor.

UBS Investment Bank and Robert A. Stanger & Co., Inc. acted as Sentio’s financial advisors, while Foley & Lardner LLP, Latham & Watkins LLP and DLA Piper acted as Sentio’s legal advisors. Simpson Thacher & Bartlett LLP served as KKR’s legal advisor.

Written by Mary Kate Nelson

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