NorthStar Healthcare Income Consolidates Ownership of Senior Housing Portfolio in $535 Million Deal

NorthStar Healthcare Income Inc., a publicly registered non-traded real estate investment trust sponsored by NorthStar Asset Management Group Inc. (NYSE: NSAM), purchased NorthStar Realty Finance Corp.’s 60 percent joint venture interest in a portfolio of 32 private pay independent living facilities. The purchase price was $534.5 million, and Northstar Healthcare Income now owns 100 percent interest in the portfolio.

NorthStar Healthcare originally acquired a 40 percent interest in the $875 million portfolio in May 2015, as reported by The DI Wire. An affiliate of Harvest Facility Holdings was the seller.

The portfolio contains approximately 3,985 units, with properties located in 12 states, with the largest concentrations in California, Texas and Washington. The facilities are currently managed by an affiliate of Holiday and have an overall occupancy rate of approximately 93 percent.

NorthStar Healthcare funded the acquisition with approximately $146 million of equity, plus closing costs, with proceeds from NorthStar Healthcare’s follow-on public offering. The company also assumed NorthStar Realty’s 60 percent share of the 32 loans, which have a total principal amount of $648 million.

Each non-recourse loan was provided through Fannie Mae’s Multifamily DUS Loan Program, and has a fixed interest rate of 4.17 percent and an original term of 10 years from the joint venture’s date of acquisition.

At the beginning of the year, NorthStar Healthcare Income completed its $700 million follow-on offering for a total capital raise of $1.8 billion, fully completing the offering.

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 the needs-driven senior housing sector, such as 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 building, hospitals and rehabilitation facilities.

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