HealthPeak Properties continues its exit from the seniors housing business, both its sale/leaseback portfolio as well as its RIDEA assets. In a large transaction, HealthPeak has sold 10 assisted living and memory care communities to its tenant, Aegis Living, which partnered with Blue Moon Capital Partners in the deal. The purchase price for the real estate (to HealthPeak) was $350 million, but the total price for the entire transaction was closer to $440 million, or about $626,700 per unit. Not too bad during a pandemic.
The 10 properties are located in California (6), Washington (3) and Nevada (1). Average occupancy in the third quarter was 89.6%, very healthy compared with the rest of the industry, so Aegis has fared relatively well during the pandemic. The quarterly cash lease rate was about $4.9 million with an EBITDAR coverage ratio of 1.26x.
Based on annualized third quarter numbers reported by HealthPeak, we have estimated annualized revenue and EBITDA to be $69.0 million and $24.7 million, respectively. That puts the cap rate at about 5.6%. On a first year forecast basis, the cap rate may have been closer to 5.8%. Aegis Living will obviously stay on as the operator.
PGIM Real Estate placed a $222 million credit facility with Fannie Mae for the acquisition at about 50% loan-to-value. The loan is for 10 years and interest only for the full term at a rate of 2.63%. That is not a typo, but the day Treasuries hit their lowest level. No broker was involved in the sale, as PEAK offered Aegis the opportunity to buy them back and Aegis approached Blue Moon.
