DigitalBridge Group has sold the last of its legacy healthcare real estate holdings as part of its transformation to a digital infrastructure REIT. Namely, it has sold some 300 facilities across senior housing, skilled nursing, medical office buildings and hospitals in a deal valued at $3.2 billion to two real estate investment firms, Highgate Capital Investments and Aurora Health Network.
Alongside the 300 healthcare real estate facilities, DigitalBridge's so-called Wellness Infrastructure business includes its equity interest in and management of its sponsored non-traded REIT, NorthStar Healthcare Income.
DigitalBridge's net proceeds come to $316 million—comprising $226 million in cash and a $90 million 5-year seller note—and the buyers are assuming $2.6 billion in consolidated investment-level debt and $294 million of subsidiary-level debt.
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"We are thrilled to announce an agreement to sell our Wellness Infrastructure business ahead of schedule and in-line with our carrying values. Having completed our digital transformation in less than two years, this final step will allow us to emerge as the pure-play, fast-growing digital infrastructure REIT we envisioned from day one," said Marc Ganzi, president and CEO of DigitalBridge.
The company has sold or monetized six non-digital, legacy segments in the past two years. This latest sale increases its corporate liquidity to over $1.5 billion on a pro forma basis,
DigitalBridge expects the sale to be completed in early 2022, subject to closing conditions and third-party approvals.
Barclays served as financial advisor to DigitalBridge in connection with the transaction and Willkie Farr & Gallagher LLP served as legal counsel. Deutsche Bank Securities Inc. served as financial advisor to Highgate and Aurora and Latham & Watkins LLP served as legal counsel.
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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.
