Earlier this week the Federal Reserve’s Open Market Committee got together to discuss monetary policy and the timing of interest rate hikes. The Federal Reserve has kept its benchmark federal funds rate at near zero for approximately six years in an effort to spur economic growth. These low rates also helped drive merger and acquisition activity in the senior housing industry, as evidenced by the large number of deals that have happened in this space in the last few years. Accordingly, industry participants who are seeking capital to acquire additional senior housing assets for their portfolios before interest rates rise should continue to look to the Chicago-based financing firmCambridge Realty Capital for assistance in financing these and other transactions as well.
A Mid-Atlantic Company Adds a Valued Asset to Its Portfolio
In New Jersey, the real estate investment company Prudential Real Estate Investors recently acquired the Gardens of Germantown assisted living home from the Gardens of Germantown LLC. Prudential Real Estate paid $10.7 million for the 31,000 square-foot facility, or $344 per square-foot. This represents a substantial premium from the $4.2 million, or $135 per square-foot that the Gardens of Germantown LLC paid for the building back in 2009. This property is a welcome addition to Prudential Real Estate’s portfolio and, although the price is significantly higher than what the Gardens of Germantown LLC paid for it, Prudential’s management believe it is a good value, and are excited to add it to the company’s list of assets.
Sabra Health Care Continues its Torrid Acquisitions Pace
Sabra Health Care REIT recently spent $550 million to acquire 21 properties from Holiday Retirement. While many REITs would have stopped there for the time being, Sabra continued its torrid acquisitions pace, recently announcing that it is purchasing eight more senior housing assets that are currently valued at $59.1 million. Sabra spent $25.9 million on four Texas properties with a total of 115 beds between them. The company is especially excited about this purchase, as evidenced by its CEO and Chairman Rick Matros’ statement that, “These four investments reflect a cross section of the types of deals that have been a hallmark of Sabra’s success; good stabilized assets, quality assets with upside potential, and another senior housing development opportunity, this one with a seasoned developer and operators.” In addition to the Texas acquisition, Sabra spent another $27.6 million on three assisted living properties in Florida with 256 beds between them. Lastly, Sabra spent $5.6 on a 64-bed assisted living and memory care facility in Baltimore, Maryland, called Tudor Heights. Sabra also committed up to $1.2 million for renovations to the facility.
These acquisitions are just a few of the many that have taken place across the country during the last few weeks and months as senior housing providers and investors continue to take advantage of low interest rates. Furthermore, most analysts believe that acquisition activity will continue at a strong pace for the next few months, so it is likely that additional deals will be announced between now and the end of the year.
