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August 14, 2014
08:38 EDTHCNHealth Care REIT expands relationship with Sunrise Senior Living
Health Care REIT has completed the acquisition of 11 premium-quality seniors housing communities $257M in cash from Gracewell Healthcare. Sunrise Senior Living, LLC, the management company in which HCN owns a 24% interest, will separately purchase Gracewell’s management company and manage the Portfolio going forward. The Portfolio is concentrated in Southern England and comprised of purpose-built, premium private-pay communities with 767 units. A majority of the Portfolio was built since 2012 and is still in lease up. Upon stabilization of the Portfolio, HCN expects to achieve approximately an 8% NOI yield. HCN owns the Portfolio under the RIDEA structure, allowing the company to capture the Portfolio’s strong NOI growth potential. Additionally, HCN and Sunrise entered into a development agreement with Gracewell’s founders, Tim Street and Daniel Kay, who will continue to be financed by Patron Capital, a pan-European institutional investor focused on property-backed investments. DevCo will own and operate a separate company that will develop premium-quality seniors housing communities, which HCN expects to own upon completion of construction and have managed by Sunrise. The agreement includes the redevelopment of one community in the Portfolio and a near-term development pipeline of 11 additional communities with 812 units located primarily in Greater London and Southern England, markets with tremendous demographics. The near-term pipeline is expected to be developed over the next two years and acquired by HCN upon completion of construction for a fixed price, representing an acquisition pipeline of $269M. Upon stabilization, HCN expects these developments to achieve high-single to low-double-digit NOI yields.
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