TOLEDO, Ohio--(BUSINESS WIRE)--Health Care REIT, Inc. (NYSE:HCN) announced today the completion of the previously announced acquisition of HealthLease Properties REIT (“HealthLease”) (TSX:HLP.UN). The acquisition includes a portfolio of high-quality seniors housing, post-acute care and long-term care communities that are managed by well-respected operators under long-term triple-net lease agreements. The purchase price represents a 7.0% initial cash yield.
“HCN has created a unique relationship network with leading health care providers and seniors housing operators. Our completion of the HealthLease acquisition and partnership with an innovative developer like Mainstreet, who is reinventing the post-acute care model through its Next Generation® prototype, are consistent with that strategy,” said Tom DeRosa, HCN’s Chief Executive Officer.
As previously announced, HCN has entered into a partnership with Mainstreet Property Group (“Mainstreet”), including an agreement to acquire 17 state-of-the-art Next Generation® communities (the “Pipeline”) that are managed by well-respected operators under long-term triple-net lease agreements. HCN will acquire the Pipeline for approximately $369 million representing a 7.5% initial cash yield. It is anticipated to close in tranches upon completion of each project beginning in 4Q14 through 1Q16.
Also previously announced, HCN entered into an agreement with Mainstreet to provide mezzanine financing at attractive mid-teen interest rates and receive purchase option rights for an additional 45 Next Generation® development projects (“Future Pipeline”) managed by well-respected operators under long-term triple-net lease agreements. The Future Pipeline represents a $1.0 billion acquisition pipeline at a 7.7% initial cash yield. It is anticipated to close in tranches upon completion of each project beginning in 2016 through 1Q17.
About Health Care REIT, Inc. HCN, an S&P 500 company with headquarters in Toledo, Ohio, is a real estate investment trust that invests across the full spectrum of seniors housing and health care real estate. The company also provides an extensive array of property management and development services. As of September 30, 2014, the company’s broadly diversified portfolio consisted of 1,246 properties in 46 states, the United Kingdom, and Canada. More information is available on the company’s website at www.hcreit.com.
About Mainstreet Mainstreet is an Indiana-based, innovative developer of short-stay rehabilitation and long-term care properties, known for acquiring and developing desirable, concierge-based health care properties. The company’s award-winning Next Generation® Medical ResortsTM feature multiple social destinations, restaurant-style dining, spacious private rooms and baths, and therapy/wellness. Mainstreet's innovative work in health care was awarded Senior Housing News' first-ever Architecture & Design Award in 2013. Mainstreet has been named to the Inc. 500/5000 four times since 2010 and was named the fastest-growing company in the Indianapolis area by the Indianapolis Business Journal in 2014. For additional information, visit www.mainstreetinvestment.com.
Forward-Looking Statements and Risk Factors
This document may contain “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. When the company uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the company’s actual results to differ materially from the company’s expectations discussed in the forward-looking statements. This may be a result of various factors, including, but not limited to, material differences between actual results and the assumptions, projections and estimates regarding the portfolio’s growth potential; changes in financing terms; the failure of closings to occur as and when anticipated; unanticipated difficulties and/or expenditures relating to the relationship and future transactions; operator/tenant bankruptcies or insolvencies; negative developments in the operating results or financial condition of operators/tenants; risks related to non-compliance with government regulations and new legislation or regulatory developments; liability or contract claims by or against operators/tenants; issues facing the health care industry, including compliance with, and changes to, regulations and payment policies, responding to government investigations and punitive settlements and operators’/tenants’ difficulty in cost-effectively obtaining and maintaining adequate liability and other insurance; the status of the economy; the status of capital markets, including availability and cost of capital; competition within the health care and seniors housing industries (in particular in response to the transaction in the marketplace); risks related to international operations; the movement of U.S. and foreign currency exchange rates; natural disasters and other acts of God affecting the company’s properties; environmental laws affecting the company’s properties; the company’s ability to maintain its qualification as a REIT; and other risks described in the company’s reports filed from time to time with the Securities and Exchange Commission. Finally, the company undertakes no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or otherwise, or to update the reasons why actual results could differ from those projected in any forward-looking statements.