TODAY’S DEALS: HCP to Buy 133 Senior Communities for $1.73B

3 min read

HCP to buy $1.73 billion in seniors housing; PRG buys a 216-unit asset in Durham; and Boston Capital invests in two affordable seniors rehabilitation projects.

Long Beach, Calif.—Seniors housing REIT HCP Inc. (Healthcare Property Investors) has entered into an agreement to buy 133 senior housing communities from a joint venture between Emeritus Corp. and Blackstone Real Estate Partners VI for $1.73 billion. As part of the transaction, Emeritus will enter into a new triple-net, master lease and continue to operate the assets. Emeritus has also committed to investing an additional $30 million to continue improving the real estate and operating performance of the portfolio. In addition, Emeritus will purchase nine remaining properties from the Blackstone JV, for which HCP has agreed to finance secured debt financing of $52 million.

The assets are located in 29 states and encompass 10,350 units with a care mix of 61 percent assisted living, 25 percent independent living, 13 percent memory care and 1 percent skilled nursing. The 133 communities consist of 99 that are stabilized and 34 that are currently in lease-up.

“We are pleased to further expand our strategic relationship with Emeritus, one of our key, best-in-class operating partners,” says Jay Flaherty, chairman and chief executive officer at HCP. “The transaction further demonstrates our thesis of unlocking significant value for our operating partners through real estate driven transactions while providing our shareholders with attractive risk adjusted returns. This transaction is immediately accretive, significantly expands our senior housing portfolio and is structured through the safety of a guaranteed triple-net lease with meaningful upside through contractual rent escalators.”

HCP expects to acquire these properties substantially unencumbered by prepaying almost all of the in-place secured debt. The transaction is expected to be $0.08 and $0.05 per share accretive to HCP’s FFO and FAD per share, respectively, on an annualized basis. HCP plans to finance this transaction consistent with its long-term leverage target of 60 percent equity and 40 percent debt.

PRG Buys 216-unit asset in Durham, N.C. 

Durham, N.C.—PRG Real Estate has completed its purchase of Bainbridge in the Park Apartments, a 216-unit asset located in Durham, N.C. The property is located in a 25-acre wooded setting about 2.5 miles from the Research Triangle Park and less than a five minute drive from the Southpoint Mall.

Built in 1985, Bainbridge Park has an amenity package that includes a 24 hour fitness center, a pool, bark park, private patios/balconies, fireplaces and a clubhouse. PRG also has a capital improvement project in the works.

“Bainbridge in the Park is a key acquisition for us,” says Sam Foster, chief operating officer of PRG Real Estate. “Adding the property to our expansive portfolio further solidifies PRG’s presence in the Raleigh Durham market and marks a resumption of our long-term growth strategy in key markets. Through interior renovation and professional hands-on management, we expect to add significant value to the asset.”

Boston Capital invests in two affordable seniors rehabilitation projects

Toano, Va.—Boston Capital invested in the rehabilitation of two multifamily apartment communities for seniors in Virginia: Gypsy Hill House Apartments, a 100-unit development in Staunton and Burnt Ordinary Village Apartments, a 22-unit development in Toano. The developments will be rehabilitated with tax credit equity from the Low Income Housing Tax Credit (LIHTC) program. The general partners are affiliated with T.M. Associates, Inc., based in Maryland along with the Telamon Corporation, a non-profit organization based in North Carolina.

“Boston Capital’s long-term relationship with T.M. Associates has resulted in the preservation and creation of more than 70 affordable multifamily developments in the mid-Atlantic region,” says Jeff Goldstein, chief operating officer and director of Real Estate at Boston Capital. “The substantial rehabilitation of both apartment communities will result in enhanced conditions and amenities which will be attractive to low-to-moderate income seniors seeking high-quality affordable housing in the Staunton and Toano areas.”

Boston Capital’s investments in Gypsy Hill House Apartments and Burnt Ordinary Village Apartments add 122 units of affordable housing to its apartment portfolio. The rehabilitation of these properties will generate $4 million in local income and create approximately 45 jobs in the Staunton and Toano areas. To date, Boston Capital has invested in nearly 13,000 units of affordable housing in Virginia.

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