NEW YORK, NY - NorthStar Healthcare Income announced the closing of the acquisition of a $639.3 million portfolio of continuing care retirement communities from subsidiaries of Fountains Senior Living Holdings, LLC. The portfolio will continue to be operated by Watermark Retirement Communities, a national operator of senior living facilities and affiliate of The Freshwater Group.
In connection with the acquisition, NorthStar Healthcare obtained fixed rate financing through Freddie Mac's Multifamily-Seniors Housing Loan Program, with an aggregate principal amount of approximately $410 million and a fixed interest rate of 3.92% and a term of 7 years.
About the portfolio:
Consists of 15 CCRCs and 23 contracted life estate units, with approximately 3,637 units located in 11 states, with the largest concentrations in New York, California, Florida and Michigan.
The six entrance fee properties were acquired directly by NorthStar Healthcare and leased to affiliates of Freshwater pursuant to a master net lease.
The nine rental properties were purchased by a joint venture between NorthStar Healthcare and an affiliate of Freshwater, which own 97% and 3% of the joint venture, respectively, and will be operated by an affiliate of Freshwater pursuant to long-term management agreements under a RIDEA structure.
Overall resident occupancy of the portfolio was approximately 85% as of March 31, 2015.
"Watermark is a valued relationship, with this investment representing the fourth transaction that we have completed together," said Ron Jeanneault, chief executive officer and president of NorthStar Healthcare. "NorthStar Healthcare's ability to leverage established relationships with premier sponsors provides access to significant investment opportunities to further expand and diversify our senior housing portfolio. This transaction demonstrates our positive reputation, our ability to deploy capital into high quality portfolios and the strength of our investment platform, which continues to drive NorthStar Healthcare's positive momentum."
NorthStar Healthcare's portfolio consists of 37 investments with an aggregate total cost of $2.1 billion, including 33 equity investments with an aggregate total cost of $1.9 billion and four debt investments with an aggregate principal amount of $145.9 million as of June 12, 2015.