New Senior Investment Group Completes $435M Seniors Housing Portfolio Acquisition, $670M Financing

by Jeff Shaw

NEW YORK — New Senior Investment Group Inc. (NYSE: SNR), a New York-based seniors housing REIT, has completed the previously announced acquisition of 17 independent living seniors housing properties from affiliates of Hawthorn Retirement Group for approximately $435 million. The acquisition was funded with cash on hand and proceeds from a first mortgage loan.

“We are excited to add to our portfolio this collection of high-quality, independent living senior housing assets, which will further increase our private pay exposure,” says Susan Givens, CEO of New Senior Investment Group.

The portfolio is 100 percent private pay, contains 2,082 units located across 10 states and had an average occupancy rate of 92.6 percent in February 2015. The average age for the 17 properties is roughly seven years. Holiday Retirement will operate the portfolio, and New Senior expects its newly acquired assets to generate a net operating income (NOI) yield of approximately 6.3 percent.

The REIT also completed a $670 million first mortgage loan secured by 52 seniors housing properties. Walker & Dunlop arranged the Freddie Mac loan, which has a seven-year maturity and bears interest at 234 basis points over LIBOR. Proceeds from the loan were used to refinance existing floating-rate debt and to fund acquisitions, including the Hawthorn portfolio.

“The financing was executed at a very attractive rate and lowers the financing cost on our existing debt, while also providing attractive financing terms for our new acquisitions,” says Givens.

New Senior is one of the largest owners of seniors housing properties and currently owns 121 properties in 31 states. New Senior is managed by an affiliate of Fortress Investment Group LLC, a global investment management firm.

The REIT’s stock price closed Friday, March 27 at $16.69 per share, down from $19.06 per share on Oct. 27, 2014.

— John Nelson

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