NASHVILLE, Tenn., Jan. 15, 2013 /PRNewswire/ -- Brookdale Senior Living Inc. (NYSE: BKD) (the "Company") today announced that it has recently completed the acquisition of 12 communities with a total of 871 units for an aggregate purchase price of $162.1 million, plus customary transaction expenses. The communities had previously been operated by the Company under long-term leases that were accounted for as either operating or capital leases.
"Eleven of these communities were acquired under purchase options, which became exercisable by the end of 2012. These options were negotiated at the inception of the leases and helped align the interests of the tenant and the landlord. The economics of these communities built nicely over time and the purchase options gave us the opportunity to purchase these communities at a cap rate exceeding 9%, thus harvesting a portion of the improved value. By replacing escalating lease rates with mortgage financing at today's interest rates, the transaction is modestly accretive. Ownership of these communities also allows us to capture the communities' value creation potential going forward," said Bill Sheriff, Brookdale's Chief Executive Officer.
In a related transaction, the Company obtained a $171.3 million first mortgage loan secured by nine of the Company's communities, including eight of the recently-acquired communities. The loan has a ten-year term and bears interest at a variable rate of 30 day LIBOR plus 259 basis points. In connection with the transaction, the Company repaid $37.4 million of mortgage loans scheduled to mature in 2013 and used the remaining loan proceeds to provide long-term financing for the acquisitions.
About Brookdale Senior LivingBrookdale Senior Living Inc. is a leading owner and operator of senior living communities throughout the United States. The Company is committed to providing an exceptional living experience through properties that are designed, purpose-built and operated to provide the highest-quality service, care and living accommodations for residents. Currently the Company operates independent living, assisted living, and dementia-care communities and continuing care retirement centers, with 647 communities in 36 states and the ability to serve approximately 67,000 residents. Through its Innovative Senior Care program, the Company also offers a range of outpatient therapy, home health and hospice services, primarily to residents of its communities.