Brookdale Senior Living Announces Acquisition of 871 Units
Brookdale Senior Living (NYSE: BKD) (the "Company") today announced that it has recently completed the acquisition of 12 communities with a total of 871 units for an aggregate purchase price of $162.1 million, plus customary transaction expenses. The communities had previously been operated by the Company under long-term leases that were accounted for as either operating or capital leases.
"Eleven of these communities were acquired under purchase options, which became exercisable by the end of 2012. These options were negotiated at the inception of the leases and helped align the interests of the tenant and the landlord. The economics of these communities built nicely over time and the purchase options gave us the opportunity to purchase these communities at a cap rate exceeding 9%, thus harvesting a portion of the improved value. By replacing escalating lease rates with mortgage financing at today's interest rates, the transaction is modestly accretive. Ownership of these communities also allows us to capture the communities' value creation potential going forward," said Bill Sheriff, Brookdale's Chief Executive Officer.
In a related transaction, the Company obtained a $171.3 million first mortgage loan secured by nine of the Company's communities, including eight