Seniors Housing Business

OCT-NOV 2017

Seniors Housing Business is the magazine that helps you navigate the evolution of the seniors housing industry.

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Acquisitions 16 www.seniorshousingbusiness.com Seniors Housing Business n October-November 2017 NATIONAL SENIORS HOUSING GROUP colliers.com/seniorshousing +1 800 858 5904 NSHG@colliers.com Connecting Investors With Opportunities Worldwide Sabra buys skilled nursing portfolio for $430 million Irvine, Calif. — Sabra Health Care REIT (NASDAQ: SBRA) has acquired 21 skilled nursing facilities in a sale-leaseback transaction with an undisclosed West Coast operator for $378 million. The Irvine-based, publicly traded REIT plans to buy the operator's three remaining facilities before the end of the year for $52 million, for an expected total purchase price of $430 million. The acquisitions are one of several mega-deals for Sabra this year. In August, the company completed its acquisition of skilled nurs- ing owner and former Ventas spinoff Care Capital Properties. Later, Sabra also announced it had agreed to buy minority interest in a 183-property portfolio of Enlivant-operated seniors housing commu- nities for $371 million. Sabra plans to eventually acquire 100 percent interest in the portfolio. Sabra was the 21st largest owner of seniors housing in the U.S. with 74 communities and 7,624 units as of June 1, according to the American Seniors Housing Association's 2017 tally. However, that ranking was before any of these three major acquisitions. Concurrent with the new sale-leaseback transaction, Sabra also announced that it has begun the process of marketing for sale the remaining 43 facilities that the company leases to Genesis Healthcare Inc. Sabra predicts the sales will occur in 2018 for aggregate sales proceeds of $425 million to $475 million. The proposed disposition, which the company is calling the "Genesis Exodus Plan," is in addi- tion to the ongoing sales of the 33 Genesis facilities that were previ- ously announced. Genesis Healthcare operates more than 450 facilities across 30 states, including American River Center in Carmichael, Calif. (pictured). The specific Genesis-operated properties that Sabra owns were not disclosed. New Senior Investment Group to sell 15 LCS, Holiday communities for $295.5 million New York City — New Senior In- vestment Group Inc. (NYSE: SNR) plans to sell 15 properties currently operated by LCS and Holiday Re- tirement for a total of $295.5 mil- lion. The LCS portfolio features six triple-net leased properties and will be sold for $186 million. The sale will also terminate the lease agreement with LCS. The Holiday portfolio includes nine properties and will be sold for $109.5 million. The buyers were not disclosed. All the properties are located in Texas and Florida, with a high con- centration in the Dallas metro area. New Senior expects the transac- tions to close before the end of the year. The company cited declining occupancy at the properties for the sale decision. Since four of the properties in the LCS portfolio are continuing care retirement com- munities, the sales will also lower New Senior's exposure to skilled nursing. "The sales announced today sig- nificantly advance our stated ob- jective of pursuing selective asset sales in order to enhance the over- all quality of our portfolio," says Susan Givens, New Senior's CEO. "In addition, these sales are expect- ed to generate significant dry pow- der for new investments and other initiatives." The LCS portfolio represents a 6.6 percent capitalization rate while the Holiday portfolio represents a 5.1 percent capitalization rate, both based on second-quarter revenues. New Senior plans to use the funds to repay approximately $178 million of existing debt. The re- mainder will be used toward new investments, debt prepayment and/or repurchases of common stock, depending on market condi- tions. ORIX USA acquires Lancaster Pollard for reported $300 million Columbus, Ohio, and Dallas — ORIX USA, a Dallas-based division of international financial services group ORIX Corp., has acquired Lancaster Pollard Holdings LLC. The acquisition price was more than $300 million, according to a re- port by Commercial Mortgage Alert. Based in Columbus, Lancaster Pollard was the top HUD lender in the seniors housing sector for fiscal year 2017, which ended Sept. 30, 2017. The company closed 79 trans- actions totaling $769.3 million, ac- counting for 23 percent of total HUD volume in the sector. Lancaster Pollard is a new sepa- rate subsidiary of ORIX alongside RED Capital Group, which is also based in Columbus, and Boston Fi- nancial Investment Management. All three ORIX subsidiaries will continue to operate as separate companies with their current man- agement. Andrew Garvey, senior managing director and head of ORIX Commercial Mortgage Ser- vicing, will have overall responsi- bility across the three businesses, managing the growth opportuni- ties provided by the larger plat- form. "As a continued commitment to building American infrastructure, ORIX has made another invest- ment in a high-value brand serv- ing the senior living and healthcare sectors," says Hideto Nishitani, ORIX USA's chairman, president and CEO. "The acquisition of Lan- caster Pollard is a natural exten- sion of ORIX's successful strategy of acquiring leaders in affordable, seniors and healthcare housing fi- nance, as evidenced by our previ- ous acquisitions of RED Capital Group and Boston Financial Invest- ment Management." "Having these three companies under the ORIX umbrella extends our ability to improve the quality

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