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Griffin-American Healthcare REIT IV Acquires Nine-Property Central Florida Senior Housing Portfolio for Approximately $110 Million
REIT expands credit facility to $200 million
ORLANDO, Fla. (Nov. 6, 2017) – American Healthcare Investors and Griffin Capital Company, LLC, the co-sponsors of Griffin-American Healthcare REIT IV, Inc., announced today the REIT has completed the acquisition of the 1,140-unit, nine-property Central Florida Senior Housing Portfolio for approximately $110 million at a capitalization rate of 7.03 percent.1 The portfolio’s properties are located throughout the Greater Tampa and Greater Orlando communities of Bradenton, Brooksville, Lake Placid, Lakeland, Pinellas Park, Sanford, Spring Hill and Winter Haven.
The acquisition was completed pursuant to a joint venture with an affiliate of Meridian Senior Living, LLC, which will manage the portfolio on a day-to-day basis. Griffin-American Healthcare REIT IV owns approximately 98 percent of the joint venture and acts as its managing member. The portfolio was acquired under a RIDEA structure, which allows for the joint venture partners to participate in both the rental and operational cash flow of each property.
Central Florida Senior Housing Portfolio totals approximately 814,000 square feet of assisted living, independent living and memory care space and has an aggregate occupancy rate of approximately 84 percent, as of September 30, 2017. During the past three years, approximately $6.5 million in capital investments have been made to modernize and improve the properties by the former owner.
Washington, D.C.-based Meridian Senior Living is an experienced senior living operator, which manages a portfolio valued in excess of $1.25 billion throughout 19 states and the District of Columbia. The company employs more than 4,000 professionals who care for approximately 5,000 senior residents in 71 communities.
“The addition of Central Florida Senior Housing Portfolio provides the REIT with a significant footprint in Florida amidst a large and aging population that is increasingly likely to transition to senior living communities,” said Stefan Oh, executive vice president of acquisitions for American Healthcare Investors and Griffin-American Healthcare REIT IV. “We also expect to enhance the value from these assets through our partnership with Meridian Senior Living, a senior living operator with extensive expertise and experience, which will employ its proven active management strategies in an effort to realize greater occupancy, higher tenant satisfaction and financial efficiencies.”
Central Florida Senior Housing Portfolio was acquired from New Senior Investment Group (NYSE: SNR), an unaffiliated third party represented by Cody Tremper of Greystone Real Estate Advisors.
Griffin-American Healthcare REIT IV purchased its first property in June 2016 and, as of the date of acquisition of Central Florida Senior Housing Portfolio, has acquired a portfolio of 40 medical office buildings and senior housing facilities for an aggregate contract purchase price of approximately $466 million.
Additionally, on October 31, 2017, the REIT entered into an amendment with Bank of America, N.A., as administrative agent, and the subsidiary guarantors and lenders, on its existing $100 million revolving line of credit to expand the line by $50 million, to a maximum principal amount of $150 million. The REIT also obtained a term loan with its existing team of lenders for a maximum amount of $50 million. Both credit facilities mature on August 25, 2019 and may be extended for one 12-month period subject to satisfaction of certain conditions as detailed in the credit agreement.
1 Based upon Central Florida Senior Housing Portfolio’s net operating income from such portfolio’s forward looking pro forma projections for the expected year one portfolio performance, including any contractual rent increases contained in such leases for year one, divided by the contract purchase price of such portfolio, exclusive of any acquisition fees and expenses paid. Central Florida Senior Housing Portfolio’s capitalization rate was 7.09 percent based on its 2016 net operating income.
Posted in Press Release on Nov 06, 2017