CHICAGO-Locally based GE Healthcare Financial Services, which has had a five-year relationship with Alpharetta, GA-based Formation Capital LLC, has contracted to buy six Formation seniors housing portfolios for $1.4 billion or about $233.3 million per portfolio. The deal, which brings GE Healthcare's real estate investments to more than $4 billion, is scheduled to close in the third quarter.
In the largest transaction of its kind between the two companies, GE Healthcare will acquire 186 skilled nursing facilities totaling more than 21,000 beds in 21 states. The contract price equates to $66,666 per bed and $7.52 million per property. The properties are 90% occupied. John Cobb, senior managing director for GE Healthcare Financial Services' real estate finance team, says his firm plans to have Formation Capital provide asset management services.
He calls the acquisition "a strong addition to our equity portfolio" and characterizes Formation Capital as "a solid, long-term partner." GE Healthcare has provided Formation Capital with several senior debt facilities for various long-term care projects totaling over $400 million over the past five years. Cobb says GE Healthcare "has been providing debt products to the long-term care industry for more than 10 years. This acquisition marks the largest to date for our healthcare real estate team and positions us as a strong player in the equity market." He says GE Healthcare is scouting for additional acquisitions in the long-term care market.
GE Healthcare is acquiring Formation Capital's ownership interests in portfolio assets operated by Laurel Healthcare, Centennial Healthcare, Opis Health Services, Harrington Healthcare, Sovereign Health Services and Epsilon Healthcare. About half of the properties are in Florida with the remainder in 20 other states. Cobb says the individual properties will continue to be operated by their current providers under long-term leasing contracts.
Formation Capital CEO Arnold Whitman hails the pending deal as "a prime example of why Formation Capital continues to work with GE Healthcare Financial Services." Whitman says that the firms have formed "a dynamic partnership and have positioned both of our organizations for continued growth."
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