Senior Housing Properties To Buy Two Medical Office Buildings For $1.13 Bln

(RTTNews) - Real estate investment trust Senior Housing Properties Trust (SNH) agreed Monday to buy two 15-story biotech medical office buildings in Boston's Seaport District for $1.125 billion. The deal, which is subject to customary closing conditions, is expected to close in the first half of 2014.

The Newton, Massachusetts-based trust owns independent and assisted living communities, medical office buildings, nursing homes and wellness centers throughout the U.S.

"The acquisition of this state-of-the-art property, which is ideally located in Boston's fastest growing downtown submarket and one of the nation's top investment markets, represents a unique opportunity to further diversify SNH's portfolio and increase our exposure to the medical office building segment," President and COO David Hegarty said in a statement.

The Boston, Massachusetts-based state-of-the-art buildings are located in premier Boston submarket, with 1.65 million total gross square feet is 96 percent occupied by global biopharmaceutical company Vertex Pharmaceuticals, Inc. (VRTX). The building include a connected, three-level 740-stall below grade parking garage.

Senior Housing Properties said it believes Vertex represents a strong credit tenant, with a remaining lease term of about 15 years for this new corporate headquarters of theirs, which has biomedical research facilities, corporate office space, structured parking and street-level retail space.

Senior Housing Properties has received a term loan commitment for $800 million from Jefferies Finance LLC and Wells Fargo Bank to fund the deal. The term loan is expected to be syndicated to a group of banks upon closing of this deal.

The REIT also has a substantial part of its $750 million unsecured revolving credit facility available to partially fund this acquisition at closing, if necessary.

"This transaction is consistent with our stated strategy to focus on medical office buildings and private-pay properties, and we expect the transaction to be immediately accretive to normalized funds from operations (FFO) per share," Hegarty added.

The company expects the deal to be immediately accretive to normalized funds from operations by about $0.06 to $0.08 per share per year.

SNH closed Monday's regular trading session at $21.99, up $0.07 or 0.32% on a volume of 1.71 million shares.