Transactions and Fundings: Griffin-American Health Care REIT merger completed; HumanGood Secures $ 120 Million Bond Bundle

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Griffin-American Health Care REIT III (GAHR III) and Griffin-American Health Care REIT IV (GAHR IV) have completed their previously announced merger, paving the way for the largest public offering ever for a real estate investment trust in the field health in a record year for REIT mergers.

The tax-free share-to-share transaction creates a combined company with a total gross investment value of $ 4.2 billion. In addition, American Healthcare Investors (AHI), the co-sponsor of the REITs, will participate in the merger through a separate transaction with GAHR III.

The merger is expected to result in operating cost savings of approximately $ 21 million per year, based on the projected fees and expenses that the companies would likely have incurred had it not been for the successful completion of the merger transaction and the acquisition of ‘AHI.

It also paves the way for an initial public offering (IPO) which, when completed, will generate additional cost savings and value. REITs merged at a rapid rate in 2021, with a total value of $ 108 billion through September, after reaching $ 17 billion in 2020, according to a new report released on Monday by global real estate services firm JLL ( NYSE: JLL).

Sales and operator transitions

Cadence Living JV acquires a Californian site

A joint venture between Summit Senior Life and Cadence Living has acquired a 2.8 acre site in Tracy, Calif., And plans to develop Cadence Tracy, a senior housing complex consisting of 77 assisted living units and 24 care units of memory.

The site is adjacent to Lennar in Tracy Hills, a large planned community that includes 5,000 single family homes, as well as 58 acres of commercial, hotel, school and office space. The first groundbreaking is expected to begin in 2022.

Managing Director and Co-Founder of Blueprint Healthcare Real Estate Investors Jacob Gehl, Managing Director Humair Sabir and Senior Partner Scott Frazier facilitated the transaction, which included the signing of an agreement by the sponsors with Link Development and Medcore Partners. .

Diversified Healthcare Trust transitions 6 five-star communities

Diversified Healthcare Trust (Nasdaq: DHC) has entered into a new management agreement with Navion Senior Solutions for five assisted living communities in South Carolina totaling 259 units within its Senior Housing Operating Portfolio (SHOP). In addition, DHC has entered into a new management agreement with Omega Senior Living for a community of 69 assisted living units in Nebraska within its SHOP.

The REIT has now entered into new management agreements representing approximately 96% of its SHOP communities to switch from Five Star Senior Living (Nasdaq: FVE) to other third party operators. DHC continues to expect to complete all management community transitions by the end of the year.

Recommended SHN + exclusives

SLIB carries out 2 transactions

Senior Living Investment Brokerage has carried out the following transactions:

– General Manager Jason Punzel, along with Senior Vice Presidents Brad Goodsell and Vince Viverito, facilitated the sale of two senior residences in Grants Pass and Medford, Oregon, totaling 148 units and 152 beds. The total value was $ 17 million. The seller is a local investor who has his only portfolio of senior housing. The buyer is an Oregon-based owner / operator with extensive experience in the development and operation of senior housing.

– Punzel, Goodsell and Viverito facilitated the sale of a 35-unit / 55-bed assisted living facility in Canby, Oregon. The sale price was not disclosed. The seller is a local owner with diverse business interests. The buyer is an Oregon-based owner / operator with extensive experience in the development and operation of senior housing.

AHEPA Affordable Housing Management Company (AMC) has entered into an agreement with Gardant Management Solutions to take over the management of Hellenic Senior Living of Mishawaka, an affordable assisted living community of 136 units in Mishawaka, Indiana, effective October 1, 2021.

The transaction completes AMC’s transition to become the management company of four affordable assisted living communities it owns in Indiana under its Hellenic Senior Living brand.

Funding

Ziegler completes 2 transactions totaling $ 212 million

Ziegler carried out the following financial arrangements:

– A $ 120 million Series 2021 bond issue issued through the California Municipal Finance Authority, on behalf of HumanGood. The show is exempt from federal and state income tax and is rated “A-” by Fitch. The proceeds, along with other available funds, will be used to finance investment projects and various renovations on HumanGood California Obligated Group campuses, and to pay certain issuance costs. After assessing the CapEx needs of the committed group, HumanGood will allocate the proceeds from the bonds to 13 of the 14 campuses. The proceeds will fund various renovations to existing infrastructure and improvements to housing units and amenities areas, including elevators, HVAC, roofs, generators, lighting, plumbing, balconies and various other areas. A subset of the proceeds has been designated to finance part of the cost of a new alternative health center project in Valle Verde, renovations to the Crestmont Tower in Piedmont Gardens and the construction of additional independent housing in Westminster Gardens.

– A $ 91.91 million Washington State Housing Finance Commission Series 2021A, 2021B and 2021C bond issue on behalf of Eliseo, formerly known as Tacoma Lutheran Retirement Community. Series 2021A and 2021B bonds are exempt from federal income tax. The package is not rated. The proceeds, along with other available funds, will be used to finance an expansion consisting of 91 new independent living units (50 apartments and 41 villas), a new catering venue, as well as renovations of multipurpose and meeting rooms, administrative offices and entrance. at the health center; refinance the outstanding Eliseo 2013 Series Bonds; repay a taxable loan used for pre-development expenses; pay interest on the Bonds for approximately 28 months; fund debt service reserve funds for each series; and pay certain issuance costs.

HJ Sims Closes $ 93.4 Million Acquisition Financing for LifeSpire of Virginia

HJ Sims closed nearly $ 93.4 million in acquisition financing on behalf of LifeSpire of Virginia. The proceeds were used to purchase The Summit, a nonprofit living plans community in Lynchburg, Virginia, formerly owned by Centra Health System. In addition, the proceeds will be used for investment projects on two campuses, Lakewood and The Culpeper, and to refinance existing bank debt with permanent bond debt.

CBRE Senior Housing (NYSE: CBRE) Vice President Aron Will, Senior Vice President Austin Sacco and Vice President Tim Root arranged a $ 20.8 million non-recourse finance package on behalf of a joint venture between Cordia Senior Living and Cypress Partners, for Cordia at Grand Traverse Commons, a 110 unit independent living and assisted living community in Traverse City, Michigan.

The loan only bears 24 months of interest. After closing, Cordia will continue to manage the property.

Outlook Notes

Fitch Confirms Bay Area Senior Caregiver ‘A’ Rating

Fitch Ratings has confirmed the issuer’s default “A” rating, as well as an “A:” rating on income bonds issued by the California Health Facilities Financing Authority, on behalf of On Lok, a senior service provider to San Francisco-based nonprofit offering in-home services for seniors, a PACE program, as well as an LGBTQ program for seniors. In addition, On Lok operates a senior service center. Bonds are a general obligation, guaranteed by a pledge of gross income from the obligated group of On Lok.

The rating reflects On Lok’s unique position in the market, stable demand, and growing census. It also incorporates the Supplier’s Average Operating Risk, which assesses the organization’s historical operating surplus and manageable capital requirements, offset by the cost risk of its highly competitive labor market.


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