New Senior Announces Agreement to Acquire $435 Million of Senior Housing Assets & the Closing of a $16 Million Senior Housing...
December 22 2014 - 5:45AM
Business Wire
New Senior Investment Group Inc. (“New Senior” or the “Company”)
(NYSE:SNR) announced today it has entered into an agreement to
acquire a 17-property portfolio of private pay, independent living
senior housing properties (the “Portfolio”) from affiliates of
Hawthorn Retirement Group LLC for approximately $435 million. The
Company expects to invest approximately $135 million of existing
cash to acquire the Portfolio and to fund the remainder of the
purchase price with debt.
The Portfolio is 100% private pay and contains 2,082 units
located across 10 states and had an average occupancy rate of 92%
for November 2014. The Portfolio is currently operated by Holiday
Retirement (“Holiday”), and the Company expects Holiday to continue
to operate the Portfolio under a new property management agreement.
The Company expects the Portfolio to generate a net operating
income (“NOI”) yield (after management fees) of approximately
6.3%.
“As the only pure play senior housing REIT, this transaction is
consistent with our strategy of focusing on owning private pay
senior housing assets, and we are excited to add 17 high-quality
independent living properties to our portfolio,” New Senior Chief
Executive Officer Susan Givens said.
The Company’s portfolio, inclusive of the Portfolio, will
include 117 properties with over 14,500 beds across 30 states.
Strategic Benefits of the
Acquisition
- Increased Private Pay Senior Housing
NOI: Upon closing, the Company expects cash NOI from private
pay independent living and assisted living / memory care
communities to increase from 91% as of the third quarter of 2014 to
approximately 93%. New Senior’s portfolio will be attractively
balanced between business models, with its managed portfolio
expected to account for approximately 48% of cash NOI and its
triple-net leased portfolio expected to account for approximately
52% of NOI following the acquisition.
- Newer, High-Quality Portfolio with
an Attractive Yield and Growth Potential: The Portfolio has an
average age of only 6 years and strong occupancy of 92% for
November 2014. Furthermore, the Portfolio generates strong NOI
margins (after management fees) of approximately 45% and is
expected to generate a NOI yield of approximately 6.3%.
- Additional Geographic
Diversification: The acquisition will increase the geographic
diversification of the Company’s portfolio, adding three new states
(MA, WA and NE). Following the acquisition, New Senior’s portfolio
will span 30 states.
- Expanded Relationship with
Best-in-Class Senior Housing Operator: The Company expects
Holiday, the largest independent living operator in the U.S. with
over 300 properties in 43 states, to continue to manage the
properties upon closing of the transaction, which should allow for
a seamless transition in the property operations. Holiday is owned
by private equity funds managed by an affiliate of the Company’s
manager.
- Enhances New Senior’s Scale:
Upon closing, New Senior will own a portfolio of 117 senior housing
properties that is expected to generate annual NOI in excess of
$180 million (calculated as annualized Q3 NOI plus the projected
annual NOI from the acquisition).
The Company expects the closing of the acquisition to occur by
the end of the first quarter of 2015. The closing is subject to
customary closing conditions, and there can be no assurance as to
the timing or the occurrence of the closing.
The Company intends to post a presentation about the acquisition
on its website, www.newseniorinv.com.
Illinois Acquisition
Separately, the Company announced it has acquired a 66-bed
memory care community located in Illinois for $15.7 million at an
NOI yield of 7.8%. The community, built in 2012, will continue to
be managed by JEA Senior Living, a leading senior housing operator
with over 25 years of operating experience and a current portfolio
of 46 properties in 16 states.
ABOUT NEW SENIOR
New Senior is a real estate investment trust focused on
investing in senior housing properties across the United States.
The Company is one of the largest owners of senior housing
properties and currently owns 100 properties in 27 states. New
Senior is managed by an affiliate of Fortress Investment Group LLC,
a global investment management firm. More information about New
Senior can be found at www.newseniorinv.com.
FORWARD-LOOKING STATEMENTS
Certain items in this press release may constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including statements
regarding the expected closing of the acquisition of the Portfolio
in the first quarter of 2015 and entry into a property management
agreement with Holiday, the NOI projected to be generated by each
of the acquisitions described in this press release and the
additional committed transactions referenced, which may not be
probable, and the projected NOI of the Company’s aggregate
portfolio after the acquisitions. These statements are based on
management's current expectations and beliefs and are subject to a
number of trends and uncertainties that could cause actual results
to differ materially from those described in the forward-looking
statements, many of which are beyond our control. The Company can
give no assurance that its expectations will be attained.
Accordingly, you should not place undue reliance on any
forward-looking statements contained in this press release. New
risks and uncertainties emerge from time to time, and it is not
possible for the Company to predict or assess the impact of every
factor that may cause its actual results to differ from those
contained in any forward-looking statements. Such forward-looking
statements speak only as of the date of this press release. The
Company expressly disclaims any obligation to release publicly any
updates or revisions to any forward-looking statements contained
herein to reflect any change in the Company's expectations with
regard thereto or change in events, conditions or circumstances on
which any statement is based.
New Senior Investment Group Inc.Investor Relations:David Smith,
212-479-3140
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