NorthStar Healthcare invests over $170M In two healthcare real estate transactions

NorthStar Healthcare Income, Inc. (NorthStar Healthcare) announced that it recently invested more than $170.0 million in two healthcare real estate transactions, including one assisted living portfolio acquisition and one mezzanine loan backed by a portfolio of skilled nursing and assisted living facilities.

NorthStar Healthcare acquired a 570-unit portfolio of senior housing assets for $125.0 million, plus closing costs. The properties are located in Long Island, NY and consist of four assisted living facilities totaling 404,000 square feet.

• The facilities are 100 percent leased to Arcadia Management, Inc. (Arcadia), which has managed the properties since 2005. Each lease contains annual rent escalations.
• The properties are located in a market with high barriers to entry, given that New York is a Certificate of Need state and that zoning restrictions limit overbuilding.
• The portfolio's overall resident occupancy was 89 percent as of July 31, 2014.
• The portfolio is currently unlevered and NorthStar Healthcare intends to secure attractive financing for the investment.

Additionally, NorthStar Healthcare closed an investment in a $45.0 million mezzanine loan secured by a pledge of an ownership interest in a portfolio of 16 healthcare properties (14 skilled nursing facilities and two assisted living facilities) located in nine states. Affiliates of Sava Senior Care (Sava), the nation's sixth largest operator of skilled nursing facilities, will continue to manage the facilities. Including this transaction, NorthStar Healthcare has closed two mezzanine loans totaling $120.0 million with the borrower and operator, following an initial $75.0 million loan that closed in June 2014.

"These investments represent strategic additions to the NorthStar Healthcare portfolio and highlight our commitment to generating value through relationships with strong senior housing owners and operators," said Daniel R. Gilbert, executive chairman. "We believe these assets advance our business plan while efficiently deploying significant capital and further diversifying NorthStar Healthcare's portfolio."

NorthStar Healthcare's portfolio consists of 19 investments with an aggregate total cost of $491.2 million, including 15 equity investments with an aggregate total cost of $345.3 million and four debt investments with an aggregate principal amount of $145.9 million, as of October 7, 2014.

SOURCE NorthStar Healthcare Income, Inc.