Earlier this year, Brookdale Senior Living announced that it would be acquiring Emeritus Senior Living in a $2.8 billion transaction that will make Brookdale one of the largest senior housing providers in the country. Now another acquisition has been announced that will be felt throughout the industry as well; Ventas, Inc. has announced that it is acquiring American Realty Capital Healthcare REIT (ARC) for $2.6 billion in cash and stock. The purchase will add 143 properties to Ventas’ portfolio, making it the 6th largest REIT in the country. Ventas’ acquisition of ARC clearly demonstrates its confidence in the value of senior housing assets. Industry participants and investors who are anxious to follow Ventas’ lead and acquire additional senior housing assets for their own portfolios should contact the Chicago-based financing firm Cambridge Realty Capital to learn more about the different financing programs that it offers for acquisitions and other needs as well.
Of the 143 properties that Ventas is acquiring through its purchase of ARC, 78 of them are medical office buildings, 7 are hospitals, 2 are land parcels, 29 are senior housing operating communities, 13 are senior housing triple-net properties, and 14 are skilled nursing facilities. The 29 senior housing communities are already generating healthy returns thanks to a 94% occupancy rate and $4,300 in revenue per occupied room. Furthermore, Ventas is projecting that these assets will have a net operating income growth rate of 4%-5%. These figures have Ventas’ management excited about this purchase as evidenced by comments from its Chairman and Chief Executive Officer Debra A. Cafaro, who stated that “These acquisitions are consistent with our stated strategy to be the leading owner of healthcare and senior living properties globally, and position Ventas to continue to deliver growth and consistent superior returns to our shareholders.”
Ventas expects the ARC purchase to close in the fourth quarter of this year, assuming that ARC’s shareholders approve of the transaction and the customary closing conditions for acquisitions of this size and type are met. After the deal has closed, Atria Senior Living will operate the senior housing communities that are a part of the deal. The ARC purchase is just one of a few that Ventas has made recently as it has been busy snatching up senior housing assets since last year. For example, in addition to its purchase of ARC, it also acquired 26 independent living communities from Holiday Retirement in 2013 for $790 million and it is also scheduled to acquire an additional 29 independent living communities from Holiday later this year for $900 million. Ventas believes its strategy of growth through acquisitions will pay dividends for it quickly and is projecting that the ARC acquisition and the purchase of Holiday’s 29 independent living communities later this year will have an unlevered yield of roughly 6% in 2015. Those providers and investors who wish to follow Ventas’ lead and take advantage of the senior housing industry’s strong fundamentals by adding additional assets to their portfolios should continue to look to Cambridge Realty Capital and the many different financing options that it offers for acquisitions, joint ventures, and other purposes as well.
