HCP Acquires Seniors Housing Portfolio in Mid-Atlantic for $186.3M

by John Nelson

BALTIMORE AND WASHINGTON, D.C. — An affiliate of HCP Inc. (NYSE: HCP), a seniors housing REIT based in Irvine, Calif., has purchased a portfolio of assisted living and memory care properties in the Mid-Atlantic for approximately $186.3 million. Developed between 1993 and 2013, The Morningside House Mid-Atlantic Portfolio consists of seven seniors housing communities located in the greater Baltimore and Washington, D.C. areas.

The seller, a joint venture between Morningside House Senior Living and Harrison Street Real Estate Capital, sold the portfolio for roughly $354,000 per unit. HCP has selected Chicago-based Senior Lifestyle Corp. to operate the assets. The portfolio included:

— Morningside House of Ellicott City in Ellicott City, Md.
— Morningside House of Friendship in Hanover, Md.
— Morningside House of Laurel in Laurel, Md.
— Morningside House of Satyr Hill in Parkville, Md.
— Morningside House of Leesburg in Leesburg, Va.
— Morningside House of Saint Charles in Waldorf, Md. and
— Poet’s Walk Memory Care in Fredericksburg, Va.

Lisa Widmier and Matthew Whitlock led CBRE Capital Markets’ National Senior Housing team in representing the joint venture in the sale.

“This transaction had multiple moving parts, including a new operator — Senior Lifestyle — partnering with a new REIT relationship, and a long HUD debt assumption approval process,“ says Widmier.

Senior Lifestyle is a family-owned seniors housing operator founded in 1985. The firm operates more than 170 independent living, memory care, assisted living, skilled nursing and short-term seniors properties in 27 states.

Harrison Street Real Estate Capital is a real estate investment firm based in Chicago. The firm and its affiliates manage approximately $10.9 billion in real estate and publicly traded securities. Harrison Street has purchased or developed more than 645 student housing, seniors housing, self storage and medical office properties worth more than $14 billion.

CBRE’s National Senior Housing team consists of 15 professionals based in Los Angeles. CBRE’s seniors housing transaction volume (combined debt and sales) is over $4.5 billion year-to-date. The team’s 2015 volume was $2.8 billion.

HCP has been in the news in recent months for its leadership changes. Over the summer, Lauralee Martin stepped down as the REIT’s president and CEO. Michael McKee, HCP’s executive chairman, has taken over the role on an interim basis. The REIT also recently spun off its skilled nursing portfolio into an independent, publicly traded REIT known as Quality Care Properties Inc. The entity will traded on the New York Stock Exchange under the symbol “QCP.”

HCP’s stock price closed on Wednesday, Oct. 26 at $35.07 per share, down from $38.53 per share at this time last year.

— John Nelson

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