NorthStar Healthcare Acquires Interest in $1.1 Billion Senior Housing Investment
New York, NY (July 16, 2015) – NorthStar Healthcare Income, Inc. (NorthStar Healthcare), through a joint venture with Formation Capital, LLC (Formation) and Safanad Management Limited (Safanad), announced the closing of the acquisition of the U.S.-based operations of Extendicare International Inc., including a portfolio of 158 senior housing and care facilities for a total cost of approximately $1.1 billion. NorthStar Healthcare acquired a 36.67% interest in the portfolio, while affiliates of Safanad and Formation collectively acquired the remaining 63.33% interest. In connection with the acquisition, NorthStar Healthcare also originated a $75.0 million mezzanine loan to partially finance the transaction, which bears interest at a fixed rate of 10.0% per year and has a term of 67 months.
About the Portfolio:
- Consists of 152 skilled nursing facilities and six assisted living facilities with over 15,000 beds located across 12 states, with the largest concentrations in Indiana, Kentucky, Ohio, Michigan and Wisconsin.
- Facilities leased to five third party operators pursuant to long-term net leases.
- Overall resident occupancy of approximately 83% as of March 31, 2015.
In addition to the mezzanine loan, the joint venture financed the acquisition with a combination of 75% fixed- and 25% floating-rate debt totaling approximately $886 million, with a weighted average current interest rate of 4.8%. The financing consists of new and in-place financing provided by the U.S. Department of Housing and Urban Development and a number of leading institutional private lenders, in addition to the mezzanine loan provided by NorthStar Healthcare.
“Our strategic partnerships continue to drive transaction volume and accretive investment opportunities for NorthStar Healthcare and our growing healthcare portfolio,” said Ron Jeanneault, chief executive officer and president of NorthStar Healthcare. “The depth of our team combined with our strong industry relationships enabled us to execute on this complex transaction and expand our portfolio with quality healthcare real estate assets. We remain focused on continuing to build a diverse portfolio of needs-driven senior housing on behalf of our shareholders.”
NorthStar Healthcare's portfolio consists of 39 investments with an aggregate total cost of $2.5 billion, including 34 equity investments with an aggregate total cost of $2.3 billion and five debt investments with an aggregate principal amount of $221 million as of July 14, 2015.