Earlier this week, we reported on the Welltower sale of 10 seniors housing communities to AEW Capital Management and Merrill Gardens Senior Living, and now we have learned that PGIM Real Estate provided the acquisition debt. The partnership buyer obtained a $460 million loan with a seven-year term. There is also a combination of fixed-rate and floating-rate terms.
The debt funded both the acquisition and the recapitalization of the 10-property portfolio, which includes a total of 1,507 units of independent living, assisted living, memory care and even some multifamily units. There are also approximately 29,000 square feet of ground-floor retail space across the portfolio.
We have heard on the street that the final purchase price came to just over $700 million, or close to $465,000 per unit, which is about 5% down from the original $740 million price the portfolio commanded earlier this year before the original transaction terminated when COVID hit. That puts the debt at about 65% loan-to-value, a reasonably conservative figure which seems appropriate during these times.
We have also heard that occupancy fell below 90% from an average of 97%, as a result of COVID-19, presumably with a material decline in EBITDA as well. Luckily, the portfolio was in a strong position going into the pandemic. Newmark Knight Frank handled the transaction and also helped arranged the debt.