Global private equity firms have been having a field day lately, making big investments in senior housing in the United States and other nations.
Both China-based Cindat Capital Management and New York-based Blackstone Group (NYSE: BX), for instance, have placed bids for a 50% stake in the senior housing business of Sydney, Australia-based LendLease Group, Bloomberg reported on Wednesday, citing people familiar with the situation.
LendLease intends to establish a joint venture with the winning bidder once the sale is completed, the people told Bloomberg. The sources estimated that a 50% stake in LendLease’s senior housing business could sell for approximately $757 million.
LendLease is a relatively major senior housing player in Australia. As of year-end 2016, the company owned 71 retirement villages with more than 12,400 senior housing units across the country.
Both Blackstone and Cindat have lately been active in the U.S. senior housing market.
In November 2016, HCP Inc. (NYSE: HCP) announced it was selling a 64-property U.S. senior housing portfolio to affiliates of Blackstone Real Estate Partners VIII L.P. and Columbia Pacific Advisors for $1.125 billion.
That same month, Cindat Capital Management joined forces with a different China-based firm, Union Life Insurance Co. Ltd., to acquire a 75% interest in a U.S. portfolio of long-term and post-acute assets for $930 million.
Cindat Capital Management, which is reportedly looking to invest $2 billion in U.S. senior housing this year alone, has also been rumored as a potential buyer for Brookdale Senior Living (NYSE: BKD), along with—more recently—China-based real estate and leisure group Zhonghong Zhuoye Group Co Ltd.
There are several reasons for increased Chinese interest U.S. senior housing, including massive aging populations in both the U.S. and China.
Often, for instance, Chinese institutional investors want to use their U.S. senior housing operating platforms “as a means to expatriate information technology (IT) and operating systems regarding seniors housing to China, and also as a platform for teaching Chinese workers how to operate senior housing communities,” Matthew Whitlock, vice chairman in the national senior housing group at commercial real estate services and investment firm CBRE (NYSE: CBG), told Senior Housing News in March.
Meanwhile, Seattle-based senior housing investment company Columbia Pacific Advisors, which has invested in China in the past, recently made a senior housing play in India. The firm also is growing stateside, announcing this week that it plans to acquire the 79-property portfolio of Hawthorn Retirement Group.
Written by Mary Kate Nelson