New Senior Investment Group announced it has entered into an agreement to sell its portfolio of 28 assisted living and memory care communities in 14 states with 2,840 units for $385 million, or $135,560 per unit. These are managed by six different operators.
This group of communities has dragged down New Senior’s performance, as occupancy and cash flow has been decreasing over the past year. Overall occupancy for the assisted living and memory care portfolio is 78%, but nine of the communities (transition assets) had occupancy of just 68.7% in the third quarter with a cash NOI margin of just 0.5%. The other 19 had an average occupancy rate of 81.3% and a cash NOI margin of 21.5%.
The REIT is now left with 102 independent living communities and one CCRC, the only senior care-oriented REIT with no exposure to either skilled nursing or assisted living/memory care. The proceeds from the sale, which is expected to close in the first quarter of 2020, will be used to pay down debt.
