Health Care REIT, Inc. (NYSE:HCN) announced today an update to its pending Sunrise Senior Living, Inc. (NYSE:SRZ) acquisition and its previously announced $925 million acquisition pipeline. Health Care REIT and Sunrise have accelerated the buy-out of majority partners in certain joint venture properties associated with the previously announced Sunrise acquisition, which increases the expected real estate value at closing from approximately $1.9 billion to approximately $3.2 billion.
“We are extremely pleased with our initial success in reaching agreements to purchase additional Sunrise joint venture partner interests,” commented George L. Chapman, Chairman and CEO of Health Care REIT, Inc. “The ability to transform what was initially announced as a $1.9 billion real estate opportunity into a $3.2 billion transaction upon closing accelerates our portfolio quality enhancement initiatives including increasing the private pay component of our portfolio and its concentration in east and west coast markets and top 31 MSAs.”
$3.2 Billion Sunrise Real Estate Acquisition:
Since the original August 22, 2012 announcement, Health Care REIT, in collaboration with Sunrise, has acquired or reached agreement to acquire majority interests in 38 of the 105 joint venture properties, which will increase the expected real estate value to approximately $3.2 billion upon closing the transaction. Of the 38 properties, 16 were subject to buy/sell rights and 22 were in joint ventures with no purchase option or buy/sell right. The total incremental investment amount related to these 38 properties is expected to be approximately $1.3 billion.
Health Care REIT closed the acquisition of five of the 38 properties for $243 million during the third quarter of 2012. These five properties are located in the United Kingdom, are managed by Sunrise and were purchased from a partnership between Sunrise and an institutional investor. Sunrise will acquire majority interests in the other 33 properties using proceeds from a $467 million loan to be provided by Health Care REIT. The loan is expected to close in the fourth quarter of 2012 and will be converted to ownership by Health Care REIT upon completion of the previously announced Sunrise acquisition.