LOS ANGELES and TOLEDO, OH-A pair of major industry consolidations has closed, with Ares Management announcing late Monday evening that it has completed its acquisition of AREA Property Partners LP and Health Care REIT saying Monday afternoon that it had finalized its $4.3-billion Sunrise Senior Living investment. The Ares deal gives Ares Real Estate Group a total of $8 billion in committed capital under management, while HCN’s acquisition of the Sunrise portfolio brings 10,000 units across 120 properties—including five in joint ventures—into its fold.
“By joining Ares, our investors will benefit from its superior deal sourcing and access to market information as well as from its significant infrastructure,” AREA CEO Lee Neibart, who’s joining Los Angeles-based Ares as a senior partner, says in a release. He adds that the AREA team is “excited to bring our equity investment discipline to Ares, which will forge a strong presence across the capital structure in real estate, just like Ares has demonstrated in its corporate investments.”
As GlobeSt.com reported when the Ares deal was first announced, Neibart is joining John Bartling, also a senior partner of the Ares Real Estate Group, as global co-heads of the group. William Benjamin, AREA’s head of Europe and India, will continue in that capacity with Ares.
Toledo, OH-based HCN expects the Sunrise portfolio to generate an unlevered NOI yield exceeding 6.5% in the second half of 2013 with long-term growth of 4% to 5% per year on average. About 90% of the properties conform to Sunrise’s mansion prototype, and the average age of each asset is eight years, well below the industry average.
At the same time, HCN says the Sunrise properties generate average monthly rental rates that are nearly 100% higher than the industry average. The portfolio is located primarily in markets with high concentrations of age and income-qualified seniors, including London; Southern California; Chicago; Philadelphia; Boston; Washington, DC; and Montreal.
In a release, HCN chairman and CEO George L. Chapman says the Sunrise acquisition “epitomizes our strategy to partner with the leading operators to own premier-quality real estate in affluent, infill markets. Our team’s execution on the joint venture buyouts exceeded all expectations with respect to timing and economics.”