ATLANTA-Grubb & Ellis Healthcare REIT has agreed to acquire Southern Skilled Nursing Facility Portfolio for $166.5 million. The portfolio includes 10 skilled nursing facilities in Alabama, Georgia, Louisiana and Tennessee. Grubb expects the deal to close in the next 30 to 60 days.
The Southeastern Skilled Nursing Facility Portfolio spans nearly 460,000 square feet and 1,364 beds. The facilities range in size from 20,000 square feet to 82,000 square feet, with an average size of 46,000 square feet. Built between 1969 and 1999, the 10 buildings are master leased through 2026 by Wellington Healthcare Services LP.
Danny Prosky, president and COO of Grubb & Ellis Healthcare REIT, called the acquisition an ideal one for his firm. “Upon completion, this major acquisition will be accretive to our bottom line and will support our investor distribution,” Prosky said in a statement. “Additionally, the facilities are strategically clustered in states with attractive demographics and will be fully occupied for the next 15 years by a highly respected and successful operator.”
The 10 buildings in the portfolio are Bell Minor Facility in Gainesville, GA; Buckhead Facility in Atlanta; Millington Facility in Millington, TN; New London Facility in Snellville, GA; Parkway Facility in Memphis, TN; Riverside Facility in Covington, GA; Rockdale Facility in Conyers, GA; Sea Breeze Facility in Mobile, AL; Shreveport Facility in Shreveport, LA; and Westminster Facility in Atlanta.
Damon Elder, a spokesperson for Grubb & Ellis Healthcare REIT, tells GlobeSt.com the firm is active in the space. Grubb just acquired a medical office building last week in Louisiana, he says, and has a full pipeline of potential acquisitions. He hinted at additional announcements coming in the next several weeks and months, with the fourth quarter especially active.
Still, challenges remain in acquiring quality healthcare properties. “From our perspective, as a REIT that seeks to provide our investors with dependable income, perhaps our biggest challenge is finding performing properties with cap rates that will be accretive and cover our 6.5% annual distribution,” Elder says. “We are very selective as a result.”
As of Sept. 23, 2011, Grubb & Ellis Healthcare REIT II has sold about 38,381,440 shares of its common stock. That figure excludes the shares issued under its distribution reinvestment plan, for approximately $382,988,000 through its initial public offering.
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