NEWTON, MA—A day after New Senior Investment Group announced a 17-property portfolio acquisition, Senior Housing Properties Trust has revealed an even larger one. The Newton, MA-based REIT said Tuesday it will buy 38 senior living communities from CNL Lifestyle Communities for approximately $790 million, including the assumption of debt. Eighteen of the communities are leased to six senior living operators, while the remaining 20 are managed by operators on CNL's behalf.

In all, the portfolio encompasses 3,466 total living units, including 826 independent living units, 1,860 assisted living units, 744 memory care units and 36 skilled nursing beds. Historically, they've been 95% private-pay, and were 93% occupied as of November.

The portfolio includes properties in Alabama, Arizona, Arkansas, California, Colorado, Florida, Georgia, Illinois, Indiana, Missouri, Montana, Nevada, North Carolina, Oregon, Rhode Island and Washington State. SNH expects to assume approximately $153 million of mortgage debt currently payable by Orlando, FL-based CNL, while the acquisition is expected to come in at a cap rate north of 7%.

For SNH, the acquisition continues a move toward portfolio diversification the company has pursued throughout 2014, says president and COO David Hegarty. When the CNL deal closes, as well as the 23-property medical office building portfolio SNH is acquiring from Select Income REIT for $539 million, “approximately 56% of SNH's consolidated net operating income will come from senior living properties and approximately 44% will come from medical office buildings,” Hegarty says. “In addition, rents from our largest tenant, Five Star, will account for less than 20% of our annualized revenues.”

Simultaneous with entering the agreement to acquire the CNL properties, SNH received a bridge loan commitment for up to $700 million from Wells Fargo Bank and Citigroup Global Markets. The REIT also can rely on a mostly-undrawn $750-million unsecured revolving credit facility, and therefore expects to have more than enough liquidity to close both the MOB acquisition and the CNL deal. The MOB portfolio buy is expected to close in the first quarter of 2015, with the CNL buy closing in Q2.

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.