Newcastle Acquires $1B Seniors Housing Portfolio From Holiday

Newcastle Investment Corp. completes a $1 billion acquisition of 51 independent living seniors housing properties from an affiliate of Holiday Acquisition Holdings.

New York, N.Y.—Newcastle Investment Corp. has announced the completion of an acquisition of independent living senior housing properties originally announced in mid-November.

In the $1.04 billion purchase, including transaction costs, Newcastle acquired 51 properties from an affiliate of Holiday Acquisition Holdings LLC.  Holiday will continue to operate the properties, pursuant to a 17-year master lease. The portfolio itself is comprised of 5,885 units spread across 24 states. Average occupancy was at 91 percent as of September, 30. 2013.

Funding of the purchase price came through $720 million of non-recourse, fixed-rate mortgage debt and $320 million of equity.  With a weighted average coupon of 4.15 percent, the debt is comprised of a $357 million loan with a term of seven years, and a $363 million loan with a term of 10 years.

The initial lease yield is 6.5 percent, with 4.5 percent increases in years two through four, and increases pegged to the Consumer Price Index in years five through 17.

In the past 18 months, Newcastle has invested more than $500 million in equity, acquiring 84 senior housing properties with more than 10,000 beds.

New York City-based Newcastle is focused on investing in and actively managing real estate assets.  In addition to other opportunistic investments, these are primarily comprised of senior housing assets and real estate and other debt.

Newcastle is managed by an affiliate of global investment management firm Fortress Investment Group LLC.