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Ventas to Acquire Entire Wexford Life Science, Medical Portfolio for $1.5B

by Jeff Shaw

CHICAGO — Giant healthcare REIT Ventas (NYSE: VTR) has agreed to acquire all the life sciences and medical real estate assets of Wexford Science & Technology for $1.5 billion. Wexford will continue to operate the portfolio, which includes 25 Class A properties totaling 4.5 million square feet.

Blackstone Real Estate Partners VIII LP is the current owner of the properties, which are largely leased to universities, academic medical centers and research companies. Tenants include Yale University, the University of Pennsylvania Health System, Washington University in St. Louis, Wake Forest University and Alexion Pharmaceuticals.

Of the 25 properties, 23 are currently in operation and are 97 percent leased. The remaining two properties are currently under development and are nearly 60 percent pre-leased to Duke University and Wake Forest University. Chicago-based Ventas also plans to acquire nine development sites contiguous to the existing assets for $50 million.

The purchase will significantly diversify Ventas’ portfolio, as the company’s previous focus was almost exclusively on seniors housing and healthcare properties. Ventas has the second-largest portfolio of seniors housing in the United States with 785 properties totaling 69,708 units, according to the American Seniors Housing Association’s most recent numbers.

The transaction includes a long-term management agreement between Ventas and Baltimore-based Wexford where Ventas will own the real estate and have exclusive rights to jointly develop future projects with Wexford.

“This transaction provides Ventas a unique opportunity to capitalize on increasing healthcare-driven research and development spurred and supported by top-tier research universities,” says Debra Cafaro, chairman and CEO of Ventas. “We believe the growth opportunity is significant, and look forward to working with Wexford to help leading universities, academic medical centers and research companies fulfill their core missions.”

Ventas is partially funding the purchase with a public offering of 9 million shares of VTR stock, which the company expects will generate $649 million.

J.P. Morgan is acting as financial advisor to Ventas on both the acquisition and the stock offering, while Kirkland & Ellis LLP is acting as the REIT’s legal counsel.

Wells Fargo Securities’ Eastdil Secured group is acting as financial advisor to Blackstone, and Simpson Thacher & Bartlett LLP is acting as its legal counsel.

Ventas expects to close the acquisition during the fourth quarter of this year. The company’s stock price closed at $73.81 per share on Tuesday, July 5, up from $62.83 one year ago.

— Jeff Shaw

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