Senior Housing Properties To Buy 38 Senior Living Communities For $790 Mln

(RTTNews) - Real estate investment trust Senior Housing Properties Trust (SNH) said Tuesday that it has agreed to acquire 38 senior living communities from CNL Lifestyle Properties, Inc. for about $790 million, including the assumption of debt. The company noted that the acquisition will further diversify its tenants and upgrade the quality of its portfolio.

The 38 communities have 3,466 total living units, including 826 independent living units, 1,860 assisted living units, 744 memory care units and 36 skilled nursing beds. The transaction is expected to close during the second quarter of 2015.

Newton, Massachusetts-based Senior Housing Properties or SNH noted that historically, more than 95 percent of revenues at these 38 communities came from residents' private resources. These combined 38 communities were about 93 percent occupied for the month of November 2014.

Eighteen of the 38 communities, with 1,847 living units, are currently leased to six senior living operators, none of which are currently SNH tenants. The remaining 20 communities, with 1,619 living units, are currently managed by six senior living operators, none of which are currently SNH managers.

David Hegarty, President and Chief Operating Officer of Senior Housing Properties, said, "Upon closing of both the acquisition of these 38 communities as well as our previously announced acquisition of 23 medical office buildings, approximately 56% of SNH's consolidated net operating income will come from senior living properties and approximately 44% will come from medical office buildings; in addition, rents from our largest tenant, Five Star, will account for less than 20% of our annualized revenues."

Senior Housing Properties currently expects to assume about $153 million of mortgage debt on certain of the 38 senior living communities to be acquired, at an average interest rate of 4.8 percent per annum.

Simultaneous with entering the agreement to acquire these properties, the company has received a bridge loan commitment for up to $700 million from Wells Fargo Bank, N.A. and Citigroup Global Markets Inc.

In addition to the bridge loan, the company maintains a $750 million unsecured revolving credit facility that is currently substantially undrawn.

As a result, Senior Housing Properties expects to have more than enough liquidity to close on both its previously announced acquisition of 23 medical office buildings for about $539 million, including the assumption of about $30 million of mortgage debt, as well as the acquisition of these 38 senior living communities.

SNH is trading at $22.86, down $0.20 or 0.88 percent on a volume of 52,417 shares.