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Griffin-American/NorthStar JV Completes $1.125 Billion Acquisition

Griffin-American Healthcare REIT III Inc. and NorthStar Healthcare Income Inc., two publicly registered non-traded real estate investment trusts, purchased approximately 96 percent of Trilogy Investors LLC in a joint venture for approximately $1.125 billion, less a portion of Trilogy retained by certain members of Trilogy’s management.

Griffin-American owns 70 percent of the joint venture and acts as its manager. NorthStar Healthcare owns 30 percent of the joint venture. As part of the transaction, Randy Bufford, Trilogy’s founder and chief executive officer, and other members of Trilogy’s management have retained an approximately 4 percent equity interest in Trilogy. Bufford and his executive team will continue to manage the Trilogy assets on behalf of the joint venture.

“With the completion of the Trilogy acquisition, Griffin-American Healthcare REIT III has added one of the nation’s most successful and respected long-term senior care providers to its portfolio, which now totals more than $2 billion in value,” said Jeff Hanson, chairman, chief executive officer and one of the largest stockholders of Griffin-American. “The Trilogy acquisition highlights the value of the strategic partnership between the Griffin-American and NorthStar Healthcare platforms, which worked together in a synergistic fashion for the benefit of both groups of stockholders.”

Founded in 1997, Trilogy is a leading owner-operator of purpose-built integrated senior healthcare campuses throughout the states of Indiana, Ohio, Michigan and Kentucky. During the course of its 18-year history, Trilogy has experienced consistent growth primarily through the development of new campuses and consumer needs-driven upgrades of existing ones. Trilogy now operates a total of 97 properties comprised of more than 10,000 beds, most of which were either built or substantially renovated in the past 10 years. Trilogy’s integrated senior health campuses offer a range of care and accommodations, including assisted living, memory care, independent living and skilled nursing services.

“The completion of the Trilogy acquisition is indicative of our sponsor’s ability to identify and source significant institutional opportunities and the value of its strategic partnership with American Healthcare Investors, the sponsor to Griffin-American. The strength and cooperation of our two healthcare platforms was instrumental in sourcing, diligencing and executing on this opportunity for both companies’ shareholders,” said Ron J. Jeanneault, chief executive officer and president of NorthStar Healthcare.

“Trilogy’s annual growth rate and profitability has been consistently impressive over the course of the past two decades, through good times and bad,” said Danny Prosky, Griffin-American’s president and chief operating officer. “Trilogy’s portfolio is strategically located in select markets experiencing growing demand for long-term care services in which Trilogy has established an industry-leading presence. Trilogy has been at the forefront of a changing healthcare delivery landscape in this country and its model is an example that other companies in this industry will come to emulate.”

Griffin-American Healthcare REIT III invests in a diversified portfolio of healthcare real estate assets, focusing primarily on medical office buildings, hospitals, skilled nursing facilities, senior housing and other healthcare-related facilities. The REIT is co-sponsored by American Healthcare Investors and Griffin Capital Corporation. As of December 1, 2015, Griffin-American Healthcare REIT III has acquired a diversified portfolio of healthcare real estate and real estate-related investments for an aggregate purchase price of approximately $2.05 billion.

NorthStar Healthcare was formed to acquire, originate and asset manage a diversified portfolio of equity, debt and securities investments in healthcare real estate, with a focus on independent living, assisted living, memory care and skilled nursing facilities and continuing care retirement communities. The REIT also invests in other healthcare property types, including medical office buildings, hospitals and rehabilitation facilities. NorthStar Healthcare is sponsored by NorthStar Asset Management Group Inc.