HCP Completes $1.1B Disposition of 64 Brookdale Seniors Housing Communities

by Jeff Shaw

IRVINE, Calif. — HCP (NYSE: HCP) has completed its previously announced sale of 64 Brookdale Senior Living-operated multifamily communities for $1.1 billion.

The deal was announced in November 2016. Affiliates of Blackstone Real Estate Partners VIII LP purchased the portfolio, with Brookdale staying on as operator. Specific names and locations of the properties were not disclosed.

The properties total 5,967 units, which equates to a sale price of  $189,000 per unit. Occupancy for the portfolio was 85.2 percent at the time the sale was announced.

KeyBank Real Estate Capital’s Healthcare platform provided a $703 million financing package for the buyers. Charlie Shoop of KeyBank Real Estate Capital’s Commercial Mortgage Group led the financing team for a Fannie Mae credit facility, which accounts for the bulk of the financing. Peter Trazzera of KeyBank Real Estate Capital’s Healthcare Group led the financing team for KeyBank’s balance sheet financing that made up the rest of the loans.

At the time the sale was announced, HCP also noted its plans to terminate leases on 25 Brookdale properties totaling 2,031 units over the next year. HCP also plans to transfer eight expiring Brookdale triple-net leases to a RIDEA structure, through a joint venture where Brookdale acquires 10 percent interest in the properties.

“This transaction represents another significant step toward executing on our strategic priorities of reducing Brookdale concentration, improving lease coverage and strengthening our balance sheet and credit profile,” says Tom Herzog, CEO of HCP.  “We value our relationships with Brookdale and Blackstone, and look forward to continuing to work with them.”

HCP expects to record a gain of approximately $165 million on the sale of the 64 assets and intends to use the proceeds to pay down debt and for general corporate purposes.

HCP is a publicly traded healthcare and seniors housing REIT based in Irvine. As of June 1, 2016, the company owned 470 seniors housing properties totaling 49,000 units, making it the fourth largest owner of seniors housing in the United States, according to the American Seniors Housing Association.

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