HCP, Sabra Complete Previously Announced Dispositions Totaling Over $1B

by Jeff Shaw

IRVINE, Calif. — Sabra Health Care REIT (NASDAQ: SBRA) and HCP Inc. (NYSE: HCP), two unrelated healthcare REITs both based in Irvine, have completed a series of previously planned property sales totaling more than $1 billion via a series of transactions.

HCP completed the disposition of its remaining investment in its joint venture with Columbia Pacific Advisors. Known as RIDEA II, the sale included 49 communities (46 of which are operated by Brookdale Senior Living). The sale resulted in $332 million in proceeds to HCP.

Additionally, HCP has advanced its plan to sell or replace the operator for its entire portfolio of 68 Brookdale-operated communities. The REIT entered a definitive agreement to sell 22 of those communities totaling 2,781 units for $428 million to an undisclosed buyer.

In separate transactions, HCP sold five Brookdale-operated communities totaling 353 units for $32 million, and an additional 15 communities totaling 1,433 units for $98 million. Some of those transactions are completed, while others are scheduled to finish during third-quarter 2018.

HCP has also transferred management of 18 Brookdale-operated communities to Atria Senior Living and one to Sonata Senior Living. For its remaining 21 Brookdale-operated communities, HCP is finalizing agreements with some operators to take over management, while marketing other properties for sale. HCP estimates the remaining unfinished deals will be completed sometime during 2018.

“We are pleased to demonstrate continued progress executing on our strategic portfolio repositioning,” says Tom Herzog, president and CEO of HCP. “The vast majority of dispositions transactions are now closed or under contract, resulting in a seniors housing portfolio with improved operator diversification and stronger demographics. Additionally, the proceeds generated from these sales will further strengthen our balance sheet.”

Sabra, meanwhile, completed a massive skilled nursing sell-off. Via two separate dispositions, the REIT sold 19 skilled nursing facilities and one seniors housing community for a total of $174 million.

The previously announced transactions included a 12-property, Genesis Healthcare-operated portfolio sold for $134 million and an eight-property skilled nursing portfolio formerly owned by Care Capital Properties for $40 million. The buyers were not disclosed.

Sabra acquired Care Capital Properties in 2017. The company was also a publicly traded healthcare REIT, and the skilled nursing spin-off of seniors housing giant Ventas.

The sales will result in a $16.4 million loss of annual rent obligations to Sabra. The REIT plans to use the proceeds to repay borrowings under its revolving credit facility.

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