Health Care REIT (HCN), Sunrise (SRZ) Accelerate Buyout of Certain Joint Venture Partners
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Price: $74.32 --0%
Overall Analyst Rating:
NEUTRAL (
Down)
Dividend Yield: 4.1%
Revenue Growth %: +45.6%
Overall Analyst Rating:
NEUTRAL (
Down)Dividend Yield: 4.1%
Revenue Growth %: +45.6%
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Health Care REIT, Inc. (NYSE: HCN) announced today an update to its pending Sunrise Senior Living, Inc. (NYSE: SRZ) acquisition and its previously announced $925 million acquisition pipeline. Health Care REIT and Sunrise have accelerated the buy-out of majority partners in certain joint venture properties associated with the previously announced Sunrise acquisition, which increases the expected real estate value at closing from approximately $1.9 billion to approximately $3.2 billion.
Since the original August 22, 2012 announcement, Health Care REIT, in collaboration with Sunrise, has acquired or reached agreement to acquire majority interests in 38 of the 105 joint venture properties, which will increase the expected real estate value to approximately $3.2 billion upon closing the transaction. Of the 38 properties, 16 were subject to buy/sell rights and 22 were in joint ventures with no purchase option or buy/sell right. The total incremental investment amount related to these 38 properties is expected to be approximately $1.3 billion.
Health Care REIT closed the acquisition of five of the 38 properties for $243 million during the third quarter of 2012. These five properties are located in the United Kingdom, are managed by Sunrise and were purchased from a partnership between Sunrise and an institutional investor. Sunrise will acquire majority interests in the other 33 properties using proceeds from a $467 million loan to be provided by Health Care REIT. The loan is expected to close in the fourth quarter of 2012 and will be converted to ownership by Health Care REIT upon completion of the previously announced Sunrise acquisition.
Adjusting for the buy-outs discussed above, the acquisition of Sunrise is now expected to be comprised of 58 wholly owned properties and 67 joint venture properties. Of the 67 joint venture properties, 50 joint venture properties are subject to purchase options that give Health Care REIT and Sunrise the right to buy the majority partners' interests.
On August 6, 2012, Health Care REIT announced anticipated third quarter 2012 acquisitions of $925 million. Quarter-to-date, $375 million of those acquisitions have closed, $263 million are expected to close in the third quarter of 2012 and $287 million are now expected to close in the fourth quarter of 2012. The aggregate acquisition amount includes approximately $134 million of debt that the company expects to assume at an average interest rate of 5.6%.
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Since the original August 22, 2012 announcement, Health Care REIT, in collaboration with Sunrise, has acquired or reached agreement to acquire majority interests in 38 of the 105 joint venture properties, which will increase the expected real estate value to approximately $3.2 billion upon closing the transaction. Of the 38 properties, 16 were subject to buy/sell rights and 22 were in joint ventures with no purchase option or buy/sell right. The total incremental investment amount related to these 38 properties is expected to be approximately $1.3 billion.
Health Care REIT closed the acquisition of five of the 38 properties for $243 million during the third quarter of 2012. These five properties are located in the United Kingdom, are managed by Sunrise and were purchased from a partnership between Sunrise and an institutional investor. Sunrise will acquire majority interests in the other 33 properties using proceeds from a $467 million loan to be provided by Health Care REIT. The loan is expected to close in the fourth quarter of 2012 and will be converted to ownership by Health Care REIT upon completion of the previously announced Sunrise acquisition.
Adjusting for the buy-outs discussed above, the acquisition of Sunrise is now expected to be comprised of 58 wholly owned properties and 67 joint venture properties. Of the 67 joint venture properties, 50 joint venture properties are subject to purchase options that give Health Care REIT and Sunrise the right to buy the majority partners' interests.
On August 6, 2012, Health Care REIT announced anticipated third quarter 2012 acquisitions of $925 million. Quarter-to-date, $375 million of those acquisitions have closed, $263 million are expected to close in the third quarter of 2012 and $287 million are now expected to close in the fourth quarter of 2012. The aggregate acquisition amount includes approximately $134 million of debt that the company expects to assume at an average interest rate of 5.6%.
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