Healthpeak Properties has nearly completed its exit from the rental seniors housing business, selling another $1 billion of assets in the first quarter of 2021, according to its latest earnings release. This comes after approximately $2.5 billion of seniors housing dispositions in the fourth quarter of 2020, so they are clearly antsy to get out.
The latest tranche of divestments included 12 properties in PEAK’s SHOP portfolio operated by Oakmont Senior Living and totaling 1,043 units. At $564 million, or $540,750 per unit, it represents the largest deal of the quarter. And considering Healthpeak’s haste to get out, commanding that sort of per-unit value speaks to the quality of the portfolio. We hear that Harrison Street was the buyer, and they are keeping Oakmont in as manager.
The seniors housing team at Newmark handled the sale of 10 more properties in its SHOP portfolio operated by Discovery Senior Living and totaling 1,425 units, split between 814 independent living, 468 assisted living and 143 memory care. Eight of the properties are located in strong markets in Florida, with one each in Georgia and Texas. Healthpeak bought the portfolio in 2018 from Kayne Anderson when it was still in lease-up. Back then, nine of the properties sold for $445 million, or nearly $360,000 per unit, at an initial cap rate in the low-4% range. However, occupancy never reached stabilization, and then the pandemic hit, causing census to drop to 74% by December 2020 and close to 70% at the time of the sale.
Making its first deal in seniors housing since the Great Recession, Lone Star Partners spent $334.0 million, or $233,900 per unit. Discovery Senior Living will stay on to operate. Sarah Anderson of Newmark also arranged acquisition debt for the transaction. Healthpeak also sold two loans and two preferred equity investments generating additional proceeds of $21 million.
Finally, Healthpeak sold nine more properties from its SHOP portfolio totaling 879 units for total proceeds of $114 million. Sonata Senior Living operated five of the properties, while Brookdale Senior Living, Capital Senior Living, Milestone Retirement and Sunrise Senior Living operated the rest. We believe Fortress Investment Group was the buyer. All in all, PEAK’s quarterly dispositions included $1 billion of sales including 31 SHOP assets at a blended trailing-three-month annualized cap rate of 2.6%. But as always, that is not how the buyer is looking at it, as they all hope to ride the recovery.
As it exits seniors housing, Healthpeak put some of those proceeds to work, acquiring a 14-property medical office portfolio with 833,000 square feet for $371 million. The REIT also purchased an approximately 80,000-square foot, on-campus MOB in Denver, Colorado for $38 million and a 48,000-square foot, on-campus MOB in Nashville, Tennessee for $13 million.
