REIT Sells Entire Senior Housing Portfolio for $280M

Investors Real Estate Trust is exiting the senior housing sector, with its latest sale including 26 properties in the Midwest.
Spring Wind assisted living community in Laramie, Wyoming, one of the properties currently owned by IRET and operated by Edgewood Senior Living

Spring Wind, an assisted living community in Laramie, Wyoming, is one of the properties currently owned by IRET and operated by Edgewood Senior Living.

Minot, N.D.—REIT Investors Real Estate Trust (IRET) has decided to exit the senior housing sector, selling a 26-property senior housing portfolio for $236 million. Several affiliates of Edgewood Senior Living have entered into six separate sales agreements to buy the portfolio, which also includes one multifamily property. The affiliates already lease 25 of the 26 senior housing properties. The sales are expected to close in 2017.

The properties being sold span several states, including Wyoming, Minnesota, Virginia, Montana, Nebraska, South Dakota and North Dakota. These sales follow IRET’s previously announced sale of eight senior housing properties in Idaho for $43.5 million. Assuming all of these transactions close, the company will have completely sold off its senior housing portfolio for a total of about $279.5 million.

The sales reflect IRET’s plans to shift focus to solely multifamily real estate. “The sale of our senior housing properties is a significant step in our efforts to transform IRET into a pure play multifamily company,” stated CEO Tim Mihalick. “As we move forward, these transactions unlock significant value within our portfolio and provide capital for new investments, while we enhance our operating platform, strengthen our balance sheet and drive cash flow. We remain excited about our pipeline of opportunities, focusing on our long term strategic growth objective to drive long term value for our shareholders.”

The specifics of the six senior housing sales include:

  • Five properties totaling 386 units in Cheyenne, Casper and Laramie, Wyo. for $53 million;
  • Two properties totaling 256 units in Hermantown, Minn. for $36.8 million;
  • Four properties totaling 220 units in Virginia, Minnesota, Montana and Nebraska for $32.3 million;
  • Five properties totaling 514 units in Minnesota, North Dakota and South Dakota for $71 million;
  • Nine properties totaling 278 units in various states, including North Dakota, South Dakota, Nebraska and Montana, for $28.8 million; and
  • One property totaling 97 units and one 24-unit townhome property in Minnesota for $14 million.

The financial advisor to IRET was BMO Capital Markets Corp.