Brookdale and HCP Announce $849 Million Acquisition of Private Pay Senior Housing Portfolio
March 17 2015 - 8:45AM
Business Wire
Brookdale Senior Living Inc. (NYSE: BKD) and HCP, Inc. (NYSE:
HCP) today announced that they have entered into a definitive
agreement to acquire from Chartwell Retirement Residences a
portfolio of 35 private pay senior housing communities (the
“Portfolio”) representing 5,025 units for $849 million. The
Portfolio will be acquired using a RIDEA joint venture structure
with HCP and Brookdale owning 90% and 10%, respectively. Brookdale
has operated these communities since 2011 after its acquisition of
Horizon Bay, and will continue to manage the communities
post-closing under a long-term management agreement.
Located in eight states with concentrations in Florida, Texas
and Colorado, the Portfolio is comprised of: (i) 33 senior housing
properties representing 4,792 units with a diversified care mix of
46% assisted living, 45% independent living, 5% memory care and 4%
skilled nursing; and (ii) leasehold interests in two communities,
which properties are wholly-owned by HCP, representing 233 units
including purchase option rights exercisable in 2017. The majority
of the units are located within the nation’s top 31 Metropolitan
Statistical Areas (MSAs). Currently 89% occupied with an average
monthly rate of $3,425, the Portfolio is expected to be acquired
unencumbered by third party debt, and is projected to generate a
first year cash yield of approximately 6.6%.
“We are pleased to further expand our investment portfolio with
Brookdale, the nation’s largest senior living operator and a
terrific long-term partner of HCP,” said Lauralee Martin, President
and CEO of HCP. “Building upon our strategic transactions executed
last year in collaboration with Andy and his team, this portfolio
acquisition provides attractive risk-adjusted returns for our
shareholders, and also creates value for our operating partner
through a real estate driven transaction. Brookdale’s familiarity
with this portfolio will be a tremendous asset as we avoid any
transition issues and immediately implement capital investment
plans to generate future growth above traditional triple-net
escalators.”
Andy Smith, Brookdale’s Chief Executive Officer, said, “We are
excited to continue expanding our relationship with HCP through
this portfolio acquisition, which combines the capital strength of
HCP with Brookdale’s operating platform. This transaction is
consistent with Brookdale’s strategy of acquiring managed
communities when possible given the company’s elevated
understanding of the operations, minimal transition costs and time,
the ability to leverage in-place overhead, and the opportunity to
exchange a vulnerable third party management arrangement with a
stable RIDEA joint venture structure.”
The closing of this acquisition, expected in the third quarter
of 2015, is subject to regulatory approvals and other customary
closing conditions. There can be no assurance that the acquisition
will close or, if it does, when the closing will occur.
ABOUT BROOKDALE SENIOR LIVING
Brookdale Senior Living Inc. is the leading operator of senior
living communities throughout the United States. The company is
committed to providing senior living solutions primarily within
properties that are designed, purpose-built and operated to provide
the highest-quality service, care and living accommodations for
residents. Currently, Brookdale operates independent living,
assisted living, and dementia-care communities and continuing care
retirement centers, with approximately 1,150 communities in 46
states and the ability to serve approximately 111,000 residents.
Through its ancillary services program, the company also offers a
range of outpatient therapy, home health, personalized living and
hospice services.
ABOUT HCP
HCP, Inc. is a fully integrated real estate investment trust
(REIT) that invests primarily in real estate serving the healthcare
industry in the United States. The company's portfolio of assets is
diversified among five distinct sectors: senior housing,
post-acute/skilled nursing, life science, medical office and
hospital. A publicly traded company since 1985, HCP: (i) was the
first healthcare REIT selected to the S&P 500 index; (ii) has
increased its dividend per share for 30 consecutive years; (iii) is
the only REIT included in the S&P 500 Dividend Aristocrats
index; and (iv) is a global leader in sustainability as a member of
the CDP, Dow Jones and FTSE4Good sustainability leadership indices,
as well as the GRESB Global Healthcare Sector Leader. For more
information regarding HCP, visit the company's website at
www.hcpi.com.
FORWARD-LOOKING STATEMENTS
Certain items in this release may constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements include, among other things,
statements regarding anticipated outcomes relating to the
acquisition of the Portfolio and the potential benefits of a new
joint venture between HCP and Brookdale. These statements are made
as of the date hereof, are not guarantees of future performance and
are subject to known and unknown risks, uncertainties, assumptions
and other factors — many of which are out of HCP’s, Brookdale’s and
their respective management’s control and difficult to forecast —
that could cause actual results to differ materially from those set
forth in or implied by such forward-looking statements. These risks
and uncertainties include but are not limited to: the ability of
HCP and Brookdale to complete the acquisition of the Portfolio on
the currently proposed terms or at all, including in respect of the
satisfaction of closing conditions, the risk that regulatory
approvals required for the acquisition are not obtained or are
subject to unanticipated conditions, uncertainties as to the timing
of the acquisition and unanticipated litigation relating to the
acquisition; the risk that either HCP or Brookdale may not be able
to achieve the benefits of the transactions described above within
expected time-frames or within expected cost projections; and other
risks and uncertainties described from time to time in HCP’s and
Brookdale’s Securities and Exchange Commission filings, including
each of HCP’s and Brookdale’s Annual Reports on Form 10-K and
Quarterly Reports on Form 10-Q. Neither HCP nor Brookdale assumes,
and each hereby expressly disclaims any, obligation to update any
of the foregoing or any other forward-looking statements as a
result of new information or new or future developments, except as
otherwise required by law.
Brookdale Senior Living Inc.Investors:Ross Roadman,
615-564-8104rroadman@brookdale.comorMedia:Julie Davis,
615-564-8225jkdavis@brookdale.comorHCP, Inc.Timothy M.
SchoenExecutive Vice President & Chief Financial
Officer949-407-0400investorrelations@hcpi.com
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