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.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
