This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

HCP To Acquire Senior Housing Portfolio For $1.73 Billion

HCP (NYSE:HCP) announced that it has entered into a definitive agreement to acquire 133 senior housing communities for $1.73 billion, from a joint venture between Emeritus Corporation (“Emeritus” – NYSE:ESC) and Blackstone Real Estate Partners VI, an affiliate of The Blackstone Group (the “Blackstone JV”). As part of this transaction, Emeritus, the nation’s largest assisted living and memory care operator, will enter into a new triple-net, master lease and continue to operate these communities. In addition, Emeritus has committed to investing an additional $30 million, representing $2,900 per unit, to continue improving the real estate and operating performance of the portfolio. Located in 29 states, the portfolio encompasses 10,350 units representing a diversified care mix of 61% assisted living, 25% independent living, 13% memory care and 1% skilled nursing. Concurrent with HCP’s acquisition, Emeritus will purchase nine remaining properties from the Blackstone JV, for which HCP has agreed to provide secured debt financing of $52 million.

The Blackstone JV initially acquired the portfolio out of bankruptcy in 2010 and transitioned the operations to Emeritus. The joint venture subsequently invested $42 million in capital improvements representing $4,100 per unit, and these efforts have increased occupancy from 80% to 88%.

HCP expects to acquire these properties substantially unencumbered by prepaying almost all of the in-place secured debt. The transaction is expected to be $0.08 and $0.05 per share accretive to HCP’s FFO and FAD per share, respectively, on an annualized basis. HCP plans to finance this transaction consistent with its long-term leverage target of 60% equity and 40% debt.

“We are pleased to further expand our strategic relationship with Emeritus, one of our key, best-in-class operating partners. The transaction further demonstrates our thesis of unlocking significant value for our operating partners through real estate driven transactions while providing our shareholders with attractive risk adjusted returns. This transaction is immediately accretive, significantly expands our senior housing portfolio and is structured through the safety of a guaranteed triple-net lease with meaningful upside through contractual rent escalators,” said Jay Flaherty, HCP’s Chairman and Chief Executive Officer.

1 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free


Chart of I:DJI
DOW 17,044.30 -6.45 -0.04%
S&P 500 2,013.43 +15.91 0.80%
NASDAQ 4,821.3610 +10.5730 0.22%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs