Earnings Announcements Feature Major M&A Moves

The mid-summer M&A doldrums abruptly ended this year with the earnings announcements from the publicly traded REITs. They started with Welltower, which announced its $1.8 billion Benchmark Senior Living portfolio sale (for 48 properties) and several major portfolio acquisitions with existing partners Sunrise Senior Living and Discovery Senior Living and new partners Balfour Senior Living and Clover Management, comprising some 94 properties not including a couple of massive development pipeline agreements with Balfour and Discovery.

That was just the start. Other big news was in Omega Healthcare Investors’ Q2 press release, in which the REIT announced that it would spend $735 million (comprising $345 million in cash and $390 million in assumed HUD debt) to acquire 58 skilled nursing facilities and two assisted living communities, with 6,590 total operating beds. Located in eight states, they are leased to two operators in three triple net leases generating about $64 million in 2020 annual contractual cash rent. The REIT also acquired a portfolio of three skilled nursing facilities in Virginia and North Carolina for $24.9 million, or $77,800 per bed.

Sticking with SNFs, Senior Housing Properties Trust entered into an agreement with a third-party to sell 15 of its skilled nursing facilities in Iowa, Nebraska and Kansas that are leased to Five Star Senior Living. Neither the third-party buyer nor the deal terms were disclosed.

 

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