CNL Lifestyle Properties Makes $630M Foray into Seniors Housing

Orlando, Fla.--Acting as a joint venture, CNL Lifestyle Properties Inc. and Sunrise Senior Living Inc. have acquired 29 seniors housing properties in a $630 million deal.

Orlando, Fla.–Acting as a joint venture, CNL Lifestyle Properties Inc. and Sunrise Senior Living Inc. have completed the acquisition of a portfolio of 29 seniors housing properties in a $630 million deal. CNL Lifestyle Properties owns 60 percent of the JV, while Sunrise will own 40 percent and operate the communities under a long-term contract.

The seller was also a joint venture, one between Sunrise and Arcapita Inc., with Goldman Sachs Lending Partners L.L.C. providing $435 million in financing for the transaction. The deal was not related to the former CNL Retirement Properties, which was a REIT overseen by CNL Financial Group. That entity was sold for $5.3 billion in October 2006 to Health Care Property Investors Inc.

The new acquisition marks Orlando-based CNL Lifestyle Properties’ entry into the seniors housing market. The REIT believes that demographics are on its side, with senior living poised for significant growth during the next 20 years as baby boomers retire.

Indeed, the timeframe for an aging U.S. population is even longer than that. According to the U.S. Census Bureau, some 86.7 million Americans will be over 65 by the year 2050, or 21 percent of the total population. Currently 12.7 percent of the U.S. population is over 65.

“As we search for properties related to our demographics-driven investment thesis, the growing baby boomer population is a key audience that we’re seeking to reach,” R. Byron Carlock Jr., president and CEO of CNL Lifestyle Properties, tells MHN. “This investment allows us to do that. In regards to this specific deal, this is an iconic portfolio of 29 urban and near-urban properties located on good real estate and primed for growth. This portfolio was especially attractive since most of the properties–24 out of 29–are Sunrise’s signature ‘mansion’ product.”

Seniors housing also represents a new point along a continuum of property types for CNL Lifestyle Properties. The company already owns more than 120 ski resorts, golf courses, marinas and amusement parks in the United States and Canada, and says that it now has assets that “appeal to individuals at all stages of life.”

McLean, Va.-based Sunrise operates 320 properties located in the United States, Canada and the United Kingdom, totaling about 31,200 units. The company’s portfolio is wide-ranging in the seniors housing sector, including independent living, assisted living, care for individuals with Alzheimer’s and other forms of memory loss, as well as nursing and rehabilitative services.