A Formation Capital health care asset

NEW YORK CITY—NorthStar Realty Finance has agreed to acquire 43 private-pay senior housing facilities and 37 skilled nursing assets in a deal valued at $1.05 billion. The sellers are private investment firm Formation Capital and Safanad Ltd., a global investment firm. The transaction will give NorthStar a major boost in this asset class, bringing its healthcare portfolio to more than 160 properties worth more than $1.6 billion.

NorthStar is essentially buying out Safanad’s stake in a partnership with Formation Capital. NorthStar is contributing approximately 92% of the $430 million of equity to purchase the portfolio. The joint venture between NorthStar and Safanad will assume in-place financing for the remaining eight percent.

Safanad CEO Kamal Bahamdan notes that with the fund’s “partial exit” it is realizing its expected return. He adds, in a prepared statement, that the fund will continue to actively explore investment opportunities within the healthcare real estate sector.

Skadden advised Formation Capital in the transaction.

The Safanad-Formation properties were one of the few remaining portfolios of health care assets available for purchase. Increasingly, companies-REITs especially-have been snapping up senior living and other health care assets leaving competitors to target smaller-sized offerings or even one-off purchases to build scale in this space.