CNL Healthcare Properties II Inc., a publicly registered non-traded real estate investment trust, has sold the Mid-America Surgery Institute, a medical office building located in Overland Park, Kansas, for approximately $15.4 million to an unaffiliated third party.
The property was originally purchased in December 2017 for $14 million, and after paying closing costs and mortgage debt, the net sales proceeds were approximately $9.5 million.
The company does not plan to make a special distribution at this time, but instead, will use the net proceeds to pay down secured debt for one of the two seniors housing assets remaining in its portfolio.
“This use of proceeds further bolsters the company’s balance sheet, while we drive value in our remaining seniors housing investments, both located in Florida,” the company stated in a letter to shareholders. “Our Summer Vista Assisted Living community in Pensacola continues to perform exceptionally with occupancy averaging 95 percent in the first quarter; and we have made meaningful strides to drive quality of care and higher occupancy levels at The Crossings at Riverview near Tampa and are encouraged by our progress thus far.”
Earlier this year, CNL Healthcare Properties II formed a special committee of its board to begin exploring strategic alternatives that could include selling the company’s assets and distributing net sales proceeds to shareholders, or a potential transaction with a third party.
Given that the company is actively selling or evaluating the sale of its assets as a part of this process, the board unanimously voted to suspend quarterly distributions beginning April 1.
CNL Healthcare Properties II commenced its $1.75 billion initial public offering in March 2016 and raised $50 million in investor equity before closing the offering in October 2018. The company oversees a portfolio of two seniors housing properties with a total purchase price of approximately $45.7 million.