Sabra, TPG Sell 8-Property Enlivant Portfolio in Pacific Northwest

A joint venture of Sabra Health Care REIT (Nasdaq: SBRA) and private equity firm TPG completed a sale of eight senior housing communities totaling 321 units in Oregon and Washington state to an Arizona-based private investor making its first senior housing acquisition.

These communities were operated by Enlivant and were underperforming, Sabra CEO Rick Matros told Senior Housing News.

“They’re facilities that Enlivant simply didn’t see the value in continuing to invest in from an operating perspective, and Sabra — as well as TPG — agreed,” he said.

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The purchase price and identity of the buyer were not disclosed. Chicago-based Blueprint represented the seller in the deal. Prior to the deal, Enlivant operated 19 communities in the two states.

The communities were brought to market in the beginning of 2019 as part of a larger 11-community deal, and a letter of intent was signed in the second quarter of 2019. The transaction took so long to close because the portfolio — consisting of smaller communities — required an operator with a particular skillset to execute needed improvements in performance.

Additionally, three of the properties were spun off because they did not fit with the buyer’s targeted location strategy, Blueprint Healthcare Real Estate Advisors Senior Director Amy Sitzman told SHN.

The buyer was able to secure debt to finance the acquisition in two tranches. Four Oregon properties, totaling 136 units, received $7.74 million in acquisition and construction financing, as the communities are being repositioned into a mix of 60 assisted living and 85 memory care units.

Carnegie Capital Managing Director JD Stettin arranged the financing.

The Washington properties, meanwhile, were secured through $10.84 million in debt at 73% loan-to-cost. The new owner will redevelop these communities, as well, splitting the total number to 87 assisted living and 106 memory care units.

The majority of Enlivant communities are owned by a joint venture of Sabra and TPG. Sabra earlier this year temporarily suspended plans to strike a new joint venture structure in order to recapitalize the portfolio. Sabra is working with TPG on a solution that will keep measuring the health of the assets, while keeping the ownership structure as simple as possible for the time being.

In April, an Enlivant community in Nebraska was one of the first facilities to temporarily close and its residents evacuated as a result of the coronavirus pandemic. Carter Place Assisted Living in Blair housed only 23 residents but several residents and staff tested positive for Covid-19.

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