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HealthLease to snare $141.7M in senior properties

March 25, 2013

A central Indiana real estate investment trust has agreed to buy 13 senior housing and care facilities in three states for $141.7 million.

HealthLease Properties Real Estate Investment Trust, a REIT affiliated with Cicero-based developer Mainstreet Property Group, announced on Monday its plans to buy the properties from developer Smith/Packett Med-Com LLC, based in Roanoke, Va.

The 13 facilities are located in North Carolina, Pennsylvania and Virginia. They consist of four skilled nursing centers, eight combination assisted living and Alzheimer’s facilities, and one standalone center for Alzheimer’s care. Together, the properties total 978 beds.

HealthLease has entered into a purchase agreement to buy the properties, according to Paul Ezekiel Turner, chairman and CEO of both Mainstreet and HealthLease. The deal is expected to close in three weeks, he said.

“This acquisition will account for a 50-percent increase in our [approximately $300 million] asset value,” Turner told IBJ on Monday. “It’s exciting to be able to grow at this kind of pace.”

With the acquisition, HealthLease’s portfolio will increase to 28 facilities in five states and Canada.

Advantages of the purchase include further diversifying HealthLease’s product mix, Turner said. And because the facilities are all 4 years old or less—or have been renovated within the last four years—the average age of HealthLease’s properties will decrease.

Founded in 2004, Mainstreet develops high-end senior living facilities. In 2012, Mainstreet executives packaged the firm’s portfolio of properties and went public with HealthLease, a REIT listed on the Toronto Stock Exchange. The initial public offering raised $110 million.

HealthLease typically leases its senior care centers to long-term operators that are responsible for all services to residents and maintenance of the buildings, which theoretically minimizes risk to investors.
 

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