Griffin-American Closes First Tranche of California Senior Portfolio Deal

Griffin-American Healthcare REIT IV closed the first of two tranches for an eight-property seniors housing acquisition in Northern California, bringing the REIT’s total to 27 medical office and seniors housing properties since its first acquisition in June 2016. Located in high-barrier-to-entry markets in California, these communities were owned by affiliates of Nazareth Healthcare, Inc. and featured 327 units of assisted living, memory care and skilled nursing.

The portfolio was fully occupied, certainly adding to its appeal. Built on average 43 years ago (although with renovations since), the first tranche of properties included a 22-unit memory care community in Menlo Park, a 65-unit assisted living community plus a 33-bed skilled nursing facility in Belmont, a 46-unit (92 beds) MC community in Fairfield and a 98-unit (157 beds) AL/MC community in Sacramento. They will be operated by Colonial Oaks Master Tenant under a 15-year absolute net lease with annual rent escalators of 6.5% after the first year and 2.5% thereafter. The next tranche of properties, located in Napa and Sonoma, will close later in 2017, and the entire acquisition will be funded with cash on hand and borrowings from Griffin-American’s revolving line of credit with Bank of America and KeyBank. Grant Goodman and Chad Elliott Lancaster Pollard are representing the seller in these transactions.