Companies News: REIT will invest $92,000 per bed in 14-facility deal

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One of the country's largest real estate investment trusts made an acquisition last month that has reverberated throughout the skilled nursing market.

Nationwide Health Properties Inc. of Newport Beach, CA, entered into an agreement to purchase 13 skilled nursing facilities and one assisted living facility in Massachusetts and New York for approximately $171 million or $92,000 per bed. The deal is expected to close next month.
The seller is Senior Residential Care and Wingate Care, which will lease the properties at an initial rate of 8.5%.
Nationwide Health Properties also plans to fund $20 million for improvements, upgrades and expansions to Wingate's facilities over the next two years, as well as $50 million for Wingate's acquisition of additional healthcare facilities.
The price is considered high for the facilities, even though the Northeast is an expensive region. Last year, the average price paid per bed in the nursing home acquisition market was only about half as much as the buyer is paying for these properties.
Most of the facilities are "relatively new, located in higher income communities and have an exterior and interior finished quality more commonly seen in high-end assisted living communities," said Steven J. Insoft, a senior investment officer with Nationwide Health Properties.
Scott Schuster, president of Wingate, said the deal with NHP will set the stage for further expansions and acquisitions.
In another major deal, Ventas Inc., a REIT based in Louisville, KY, purchased six retirement communities for $85 million or $89,500 per unit. The seller was a joint venture managed by Capital Senior Living, which will leasethe properties at an initial lease rate
of 8%.