A number of senior housing purchases recently took place as providers and investors continue to take advantage of low interest rates to add these assets to their portfolios. Industry participants who are seeking capital to make purchases of their own should continue to look to Cambridge Realty Capital for financing these and other senior housing transactions as well.
Acquisitions in the Southwest Region
In Texas, Titan SeaQuest Senior Living expanded its senior housing portfolio by purchasing the two properties Governor’s Ridge Retirement & Assisted Living in Decatur, and Redstone Park Ridge Retirement & Assisted Living in Brownwood. By acquiring Governor’s Ridge, Titan SeaQuest added 57 independent living and assisted living units to its portfolio, and the acquisition of Redstone Park Ridge added another 59 units to its portfolio. Governor’s Ridge is already a bonafide success, as evidenced by its 98 percent occupancy rate. Although Redstone Park Ridge’s occupancy level is slightly less at 86 percent, with three levels of care, attractive amenities, and a fully trained staff onsite 24 hours a day, 7 days a week, Titan feels that the community is well positioned to take advantage of demand for senior housing services in the area, and will increase its occupancy numbers as it does so.
Also in Texas, Sabra Health Care REIT continued its recent streak of purchases by acquiring the Onion Creek skilled nursing facility. Onion Creek is located in Austin, Texas and has 125 beds. It opened its doors to residents in 2011 and is managed by Senior Care Centers LLC.
Acquisitions in the Midwest
Although Sabra Health Care REIT was very happy with its purchase of Onion Creek, it did not stop there. Sabra also purchased three transitional care facilities in eastern and central Oklahoma for $41 million, and entered into a triple-net lease agreement for all three properties with affiliates of the seller. The lease’s initial term is for ten years, and it also has two five-year renewal options and annual rent escalators that should result in annual lease revenues of roughly $4 million. Sabra’s management is very excited about all of its recent purchases, as evidenced by the following statement from its CEO and Chairman, Rick Matros: “The facilities in the Oklahoma Portfolio are transitional care skilled nursing facilities. In our view, they represent where the model is going with primarily private rooms servicing short stay post-surgical patients with revenues that are almost entirely Medicare and managed care. Onion Creek, a beautiful new skilled nursing facility, was one of our first transactions with Meridian and led us to partner with them on our development pipeline. We bring in two quality management teams with these investments as we continue to expand our tenant base.”
Another acquisition that just took place in the Midwest is CareTrust REIT’s $12 million purchase of three senior living communities in Pocatello and Idaho Falls, Idaho. CareTrust acquired these properties from Cross Healthcare, LLC and they are being leased back to affiliates of Cross Healthcare under a triple-net lease agreement. These properties added 90 units to CareTrust’s portfolio, and between them they maintain a 92 percent occupancy rate.
These purchases are just a few of the many taking place so far this quarter, and will most likely continue to take place through the end of the year thanks to low interest rates and strong demand for senior housing services.
