Transactions & Financings: Griffin-American Health Care REIT Merger Complete; HumanGood Secures $120M Bond Package

Griffin-American Health Care REIT III (GAHR III) and Griffin-American Health Care REIT IV (GAHR IV) completed their previously announced merger, setting the stage for the largest-ever public offering for a health care real estate investment trust in a record year for REIT mergers.

The tax-free, stock-for stock transaction creates a combined company with a total gross investment value of $4.2 billion. Additionally, American Healthcare Investors (AHI), the REITs’ co-sponsor, is being brought into the merger through a separate transaction with GAHR III.

The merger is expected to result in operational cost savings of approximately $21 million annually, based on the projected fees and expenses the companies would have likely incurred absent the successful completion of the merger transaction and AHI acquisition.


It also sets the stage for an initial public offering (IPO) that, when completed, will produce further cost savings and value. REITs have merged at a rapid pace in 2021, with deal value totaling $108 billion through September, after bottoming to $17 billion in 2020, according to a new report released Monday by global real estate services firm JLL (NYSE: JLL).

Sales and operator transitions

MedCore Partners JV acquires California site

A joint venture between Link Senior Development and MedCore Partners acquired a 2.8-acre site in Tracy, California. The JV also signed an agreement with a joint venture between Summit Senior Life and Cadence Living, which plans to develop Cadence Tracy, a senior housing development consisting of 77 assisted living and 24 memory care units. 

The site is adjacent to Lennar at Tracy Hills, a large master-planned community that includes 5,000 single-family homes, as well as 58 acres of commercial spaces, hotels, schools, and offices. Groundbreaking is expected to begin in 2022. 


Blueprint Healthcare Real Estate Investors Executive Managing Director and Co-Founder Jacob Gehl, Managing Director Humair Sabir, and Senior Associate Scott Frazier facilitated the sponsorship agreement.

Diversified Healthcare Trust transitions 6 Five Star communities

Diversified Healthcare Trust (Nasdaq: DHC) entered into a new management agreement with Navion Senior Solutions for five assisted living communities in South Carolina totaling 259 units within its Senior Housing Operating Portfolio (SHOP). Additionally, DHC entered into a new management agreement with Omega Senior Living for a 69-unit assisted living community in Nebraska within its SHOP.

The REIT has now entered into new management agreements representing approximately 96% of its SHOP communities to be transitioned from Five Star Senior Living (Nasdaq: FVE) to other third-party operators. DHC continues to expect to complete all of the management community transitions by year end.

SLIB completes 2 transactions

Senior Living Investment Brokerage completed the following transactions:

— Managing Director Jason Punzel, along with Senior Vice Presidents Brad Goodsell and Vince Viverito, facilitated the sale of two senior housing communities in Grants Pass and Medford, Oregon, totaling 148 units and 152 beds. The total value was $17 million. The seller is a local investor disposing of its only senior housing assets. The buyer is an Oregon-based owner/operator with extensive senior housing development and operations experience.

— Punzel, Goodsell and Viverito facilitated the sale of a 35-unit/55-bed assisted living facility in Canby, Oregon. The sale price was not disclosed. The seller is a local owner with diverse business interests. The buyer is an Oregon-based owner/operator with extensive senior housing development and operations experience.

AHEPA Management adds Indiana affordable assisted living community to operating portfolio

AHEPA Affordable Housing Management Company (AMC) reached an agreement with Gardant Management Solutions to assume management of Hellenic Senior Living of Mishawaka, a 136-unit affordable assisted living lifestyle community in Mishawaka, Indiana, effective Oct. 1, 2021.

The transaction completes AMC’s transition to become the management company of four affordable assisted living communities it owns in Indiana under its Hellenic Senior Living brand.


Ziegler completes 2 transactions, totaling $212M

Ziegler completed the following financing packages:

— A $120 million Series 2021 bond issuance issued through the California Municipal Finance Authority, on behalf of HumanGood. The issuance is exempt from federal and state income tax, and carry an “A-” rating from Fitch. Proceeds, along with other available funds, will be used to fund capital projects and various renovations at the HumanGood California Obligated Group campuses, and pay certain costs of issuance. After evaluating CapEx needs across the obligated group, HumanGood will allocate proceeds of the bonds across 13 of the 14 campuses. Proceeds will fund various renovations to existing infrastructure and upgrades to housing units and amenities areas including elevators, HVAC, roofs, generators, lighting, plumbing, balconies and various other areas. A subset of the proceeds has been designated to finance a portion of the cost of a new replacement health center project at Valle Verde, Crestmont Tower renovations at Piedmont Gardens, and the construction of additional independent living accommodations at Westminster Gardens.

— A $91.91 million Series 2021A, Series 2021B and 2021C bond issuance from the Washington State Housing Finance Commission, on behalf of Eliseo, formerly known as Tacoma Lutheran Retirement Community. The Series 2021A and 2021B bonds are exempt from federal income tax. The package is not rated. Proceeds, along with other available funds, will be used to fund an expansion consisting of 91 new independent living units (50 apartments and 41 villas), a new dining venue, as well as renovations to multipurpose and meeting rooms, administrative offices and the entrance to the health center; refinance Eliseo’s outstanding Series 2013 Bonds; repay a taxable loan used for pre-development expenses; pay interest on the Bonds for approximately 28 months; fund debt service reserve funds for each series; and pay certain costs of issuance.

HJ Sims closes $93.4M acquisition financing for LifeSpire of Virginia

HJ Sims closed a nearly $93.4 million acquisition financing package on behalf of LifeSpire of Virginia. Proceeds were used to purchase The Summit, a nonprofit life plan community in Lynchburg, Virginia, formerly owned by Centra Health System. Additionally, proceeds will be used for capital projects at two campuses, Lakewood and The Culpeper, and to refinance existing bank held debt with permanent bond debt.

CBRE arranges $21M refinancing package for Michigan community

CBRE Senior Housing (NYSE: CBRE) Vice Chairman Aron Will, First Vice President Austin Sacco, and Vice President Tim Root arranged a $20.8 million non-recourse financing package on behalf of a joint venture between Cordia Senior Living and Cypress Partners, for Cordia at Grand Traverse Commons, a 110-unit independent living and assisted living community in Traverse City, Michigan.

The loan carries 24 months of interest only. Post-close, Cordia will continue to manage the property.

Ratings Outlooks

Fitch affirms ‘A’ Rating on Bay Area senior care provider

Fitch Ratings affirmed the “A” issuer default rating, as well as the “A: rating on revenue bonds issued by the California Health Facilities Financing Authority, on behalf of On Lok, a nonprofit senior services provider based in San Francisco, offering at-home services for seniors, a PACE program, as well as an LGBTQ program for seniors. Additionally, On Lok operates a senior service center. The bonds are general obligation, secured by a gross revenue pledge from On Lok’s obligated group.

The rating reflects On Lok’s unique market position, stable demand and increasing census. It also incorporates the provider’s midrange operating risk, which evaluates the organization’s history of operating surpluses and manageable capital needs, offset by the cost risk of its very competitive labor market.

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