Healthpeak Properties jolted the senior care industry when it announced it is in the process of unloading its entire seniors housing RIDEA portfolio (135 communities with 15,992 units) as well as its triple net lease portfolio (62 communities with 5,848 units). So far, $1.5 billion of assets are under binding and non-binding letters of intent in eight transactions, while $2 billion is under letter of intent in six deals. The rest of the communities are being actively marketed. The RIDEA assets, if they close, will sell at about a 5.8% cap rate based on trailing 12-months EBITDA ended March 31, 2020 (pre-pandemic), but closer to 3% based on third quarter performance annualized. This appears to be very similar to Welltower’s major dispositions so far in 2020.
The RIDEA portfolio’s major operators include Oakmont Senior Living (12 communities), Sunrise Senior Living (37 communities). Brookdale Senior Living (20 communities) and Atria Senior Living (25 communities). The seniors housing triple-net portfolio includes Brookdale (25 communities), Aegis Living (10), Harbor Retirement Associates (8), Capital Senior Living (8) and Saber Healthcare (3). Management stated that they will not sell if the prices are not what they want, and while they are not saying it like this, the divestiture of $4 billion of seniors housing assets is a big statement as to what they think of the prospects for seniors housing. After all, they were one of the Big 3, and a major force across the senior care spectrum going back to the 1980s. They simply confirmed what we cover in this month’s issue of The SeniorCare Investor, that the recovery is going to be slow and bumpy, and they decided not to wait.
Instead of seniors housing, they will focus on life sciences and medical office buildings, and will keep their CCRC portfolio, at least for now. Will they return to seniors housing? We don’t know how they could stay away after 2025. And that might be a long enough break to get them excited about the prospects again.
