Earlier this year, Brookdale Senior Living announced that it would be purchasing Emeritus in 2014’s first major senior housing deal. Since then mergers and acquisitions have continued at a robust pace thanks to low interest rates and strong demand for senior housing services. Senior housing providers and investors who are seeking inexpensive capital to take advantage of this situation by purchasing additional senior housing assets should contact Cambridge Realty Capital to learn more about the different financing options that it offers for acquisitions and other purposes as well.
Brookdale Begins Building Its New Brand
Brookdale recently completed its $2.8 billion purchase of Emeritus and in the process it greatly expanded its reach in the senior housing industry. With this purchase, Brookdale gained a presence in 10 new states and now has over 1,100 communities and 112,700 units. Fifty-two percent of these units are for assisted living residents, 31% are for independent living residents, and the remainder are for skilled nursing and memory care residents. Now that this acquisition has closed, Brookdale is turning its focus to effectively merging its new assets into its operations. This was made clear in a statement by Andy Smith, Brookdale’s CEO, who said that “Our newly combined company will have incredible size and scale in our industry. We will begin to leverage this scale to build a national Brookdale brand, create new efficiencies in our operating platform, and drive new innovations to serve our residents.”
NorthStar Realty Finance Announces a Major Acquisition
In an acquisition that’s even larger in dollar terms than Brookdale’s purchase of Emeritus, NorthStar Realty Finance Corp. has announced that it is purchasing Griffin-American Health Care REIT II for $4 billion. Griffin-American has a wide range of assets in the U.S. and Britain, including investments in senior housing properties, skilled nursing facilities, and medical office buildings. Griffin has also increased the size of its portfolio in recent months thanks to its purchase of 44 senior housing properties in Britain last September for $472 million, approximately $540 million in acquisitions a few months later in December, and the purchase of four continuing care retirement communities for $300 million in January of this year. Under the terms of the agreement, Griffin-American’s shareholders will receive $7.75 in cash and $3.75 in NorthStar Realty stock for each share of Griffin-American stock that they hold.
Although the $4 billion price tag for Griffin-American is higher than the $3.7 billion figure that many analysts believe it is worth, NorthStar does not believe it overpaid for the REIT. To the contrary, comments made by NorthStar’s CEO and Chairman David Hamamoto, indicate that it is pleased with its acquisition of Griffin-American and is also continuing to look for opportunities to expand. “This acquisition represents a highly desirable portfolio of healthcare real estate assets, which creates the framework for substantial multiple expansion and provides NorthStar Realty an exciting opportunity to unlock assets and platform value through future acquisitions.”
