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NorthStar Healthcare Closes Two Transactions in September

Non-traded REIT, NorthStar Healthcare Income (NorthStar), revealed today that during the month of September, it closed on over $170 million of investments through two transactions.

Sponsored by NorthStar Asset Management Group, the REIT focuses on managing debt and equity investments in healthcare real estate. Specifically, it invests in the needs-driven, mid-acuity senior housing sector, which includes assisted living, memory care, skilled nursing, and independent living facilities.

The September investments come in the form of an assisted living portfolio acquisition and one mezzanine loan, which is backed by a portfolio of skilled nursing and assisted living facilities. 

The assisted living portfolio acquisition consists of 4 senior living facilities and totals 570 units. All located in Long Island, New York, the four buildings total 404,000 square feet and are 100% leased to Arcadia Management, Inc.

As of July 31, 2014, the Portfolio’s overall resident occupancy was 89%. Currently unlevered, NorthStar acquired the portfolio for $125 million, plus closing costs and will use it to secure future financing.

The $45 million mezzanine loan is secured by a pledge of an ownership interest in a healthcare real estate portfolio. The portfolio is made up of 14 skilled nursing facilities and two assisted living facilities comprised of 1,900 licensed beds. Located in nine states, the facilities will continue to be managed by affiliates of Sava Senior Care, which is the country’s sixth largest operator of skilled nursing facilities. NorthStar Healthcare funded the loan with proceeds from its ongoing initial public offering. This is the second of two mezzanine loans NorthStar has closed with the borrower, the first being a $75 million loan that closed in June of this year.

“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,” commented Daniel R. Gilbert, executive chairman. He continued, “We believe these assets advance our business plan while efficiently deploying significant capital and further diversifying NorthStar Healthcare’s portfolio.”

As of October 7, 2014 NorthStar’s portfolio consisted of 19 investments with an aggregate total cost of $491.2 million. Four are debt investments with an aggregate principal amount of $145.9 million and 15 are equity investments that have an aggregate total cost of $345.3 million.