"The agreement to buy this portfolio comes after several months of negotiation and consideration by our board of trustees," says Derek Watchorn, president/CEO of Retirement REIT. "The acquisition will add seven quality facilities with strong market presence to our existing portfolio of three skilled nursing facilities in New Jersey."

Those three facilities are located in Bloomfield, Passaic and Wayne, all in the northern part of the state. The seven facilities being acquired will extend Retirement REIT's presence to the central and southern parts of New Jersey--they're in Toms River, Brick, Linwood, Williamstown, Neptune, Whiting and Somerset.

"We had previously identified New Jersey as a desirable market because of its strong demographics and income levels, favorable funding environment and controls on new construction," Watchorn says. "This acquisition allows us to expand our existing platform in the northeastern US. It is also consistent will our commitment to enhance value for unitholders while we continue to look at strategic alternatives because the transaction is expected to be accretive to both per unit distributable income and AFFO."

For Brandywine, the sale essentially takes the company out of the nursing home business, but it will continue to operate a string of assisted-care retirement communities. Under the terms of the agreement released by both companies, Retirement REIT will assume the existing mortgages on the properties, totaling approximately $62 million and bearing a weighted average interest rate of 7.5%. The buyer will also arrange a new mortgage on an unencumbered facility amounting to about $11 million, and will pay the balance in cash. The deal is expected to close this spring, pending lender and government regulatory approval.

Retirement REIT currently owns 216 retirement and long-term care facilities, 33 of them in the US and the rest in Canada. It also manages 10 properties for other owners.

Instant Insights /

Seven Nursing Homes Trade for $100M

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