NorthStar Healthcare Income, Inc. (NorthStar Healthcare), the publicly registered non-traded REIT, announced today the closing of a strategic joint venture with The Freshwater Group (Freshwater). Freshwater is a leading developer, owner, and operator of senior living facilities. The joint venture will acquire and manage a portfolio of senior housing assets located throughout the U.S. It has initially indentified three properties that have an aggregate purchase price of $86.6 million plus closing costs. NorthStar Healthcare owns a 97% interest in the joint venture.
The joint venture’s initial investment consists of Pinebrook Facility, a 125-unit independent living facility in Milford, Ohio, for a total cost of $16.3 million. The joint venture is also under contract to purchase a 184-unit independent and assisted living facility located in Denver, Colorado, The Harvard Square Facility, for a purchase price of $31.5 million. A third property with a purchase price of $39.5 million has also been identified by the joint venture and it is currently under due diligence review. These will be managed by an affiliate of Freshwater, as will any additional assets purchased by the joint venture.
NorthStar Healthcare has also completed the acquisition of the Vinings Facility, a 56-unit memory care facility in Smyrna, Georgia, for a purchase price of $10.1 million. This property will be operated by an affiliate of Peregrine Health Management Company (Peregrine). Including the Vinings Facility, Peregrine operates three of NorthStar Healthcare’s senior living facilities, which totals 118 units with a combined cost of $24.3 million.
Chief executive officer of NorthStar Healthcare, Daniel R. Gilbert, commented, “We are pleased with the closing of our strategic joint venture with Freshwater as well as the expansion of our existing relationship with Peregrine. We intend to continue to build on these partnerships with experienced managers and operators of senior housing facilities, which provide us with the ability to execute deals efficiently and drive value at our properties.” Mr. Gilbert added, “We believe these recent closings demonstrate our ability to acquire high-quality senior housing assets in line with our business plan and reflect the momentum we are gaining in the market.”
As of January 10, 2014, NorthStar Healthcare has invested in seven assets totaling $67.0 million, which consists of six equity investments totaling $55.7 million and one senior loan totaling $11.3 million. NorthStar Healthcare’s offering is expected to terminate August 7, 2014.