Earlier this year, White Oak Healthcare Finance announced that it was forming a new REIT to invest up to $500 million in seniors housing and skilled nursing acquisitions. To do that, they hired a new team consisting of Jeff Erhardt, Paul Nevala, Mike Treiber and John Brussard, all of whom founded Capital Healthcare Investors, a wholly owned subsidiary of MTGE Investment Corp., a publicly traded hybrid REIT.
Now, the REIT, appropriately named White Oak Healthcare REIT, is making its first acquisition, involving a four-property senior living portfolio. Located in Arkansas (2), Florida and Pennsylvania, the portfolio features a total of 104 independent living, 230 assisted living and 103 memory care units. Historically, these communities performed well with stable cash flow, and by the time of sale, they operated at a 32% margin with 95% occupancy. The seller, Capital Health Group, had also invested in renovations and converted a number of units to care for higher-acuity residents. CHG’s management affiliate, Milestone Retirement Communities, will continue on as operator, as CHG will also remain as a minority owner.
No purchase price was disclosed, but Matt Pipitone and Steve Muth of M&T Realty Capital Corporation provided financing for the transaction. This is just the start for White Oak Healthcare REIT, which intends to build a portfolio with assets totaling around $2 billion over the next three to four years.
