Healthpeak Properties (NYSE: PEAK) is deepening its relationship with Oakmont Senior Living, capping a 2019 marked by restructuring its portfolio mix, forging partnerships with high-quality operators and changing its name.
The Irvine, California-based health care real estate investment trust (REIT) on Wednesday announced an agreement granting it the option to acquire up to 24 of Oakmont’s senior housing development properties, when the Windsor, California-based owner-operator decides to sell them.
Healthpeak, which changed its name from HCP in October, will fund the future acquisitions with proceeds from a December 2018 stock offering, and from senior housing joint ventures, the REIT said in a statement.
Oakmont played a crucial role in Healthpeak’s shift to acquisition mode this year. The two sides agreed to a $113 million deal in the first quarter of 2019 for a three-property portfolio in California. Healthpeak also expanded its RIDEA partnership with Oakmont. The acquisition was part of $558 million in senior housing acquisitions by Healthpeak in Q1. The Oakmont properties in the latest agreement are in California.
The Oakmont properties where Healthpeak holds the purchasing option have an aggregate value of $1.3 billion. The acquisition options will be offered in tranches between 2020 and 2023, including approximately $200 million in the first half of 2020. Healthpeak has the option to acquire each applicable tranche based on a pre-determined pricing formula with projected year-one cash capitalization rates equal to 5.5%.
The properties will be added to the existing Healthpeak-Oakmont RIDEA agreement.
In other Healthpeak news, the REIT will begin construction of a $164 million life science development and redevelopment project, The Boardwalk, in the Torrey Pines area of San Diego. This will be Healthpeak’s flagship life science campus. Healthpeak is also partnering with HCA Healthcare to develop a $46 million, six story medical office building on the TriStar Centennial Medical Center Campus in Nashville. The project is 45% pre-leased and construction is expected to begin in mid-2020.
As of post time, Healthpeak and Oakmont did not respond to requests for comment from Senior Housing News.