Seniors Housing Weekly Update – Another Holiday Sale For Fortress

June 23, 2015. 60 Seconds with Steve Monroe.

New Senior Investment Group pays $640 million for 28 Holiday Retirement Communities…

It has been eight years since Fortress Investment Group closed on its acquisition of Holiday Retirement Corporation for $6.6 billion, or $188,500 per unit. It saw occupancy drop from around 90% to well below 80% in less than three years. There was high turnover among the staff. There were some debt extensions to give it more time. Did we mention the Great Recession hit a year after closing the deal? A lot can happen in eight years, including continued low interest rates which help keep valuations up. This week, they announced another portfolio sale, this time to New Senior Investment Group, which before it was spun out of Newcastle Investment Corp. last year did a 52-property, billion dollar Holiday purchase in 2013. The current deal was priced a little higher than some of the past deals, with 28 communities going for $640 million, or $194,000 per unit, and the EBITDAR per occupied unit was higher at about $14,000. By our tally, Fortress has sold off more than 60% of the original portfolio for more than $4.3 billion. But a third of the sales has been to affiliates of Fortress. Even so, it looks like the deal will be profitable after all.


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