IRVINE, Calif. — Healthpeak Properties Inc. (NYSE: PEAK), the Irvine-based REIT formerly known as HCP, has signed an agreement with Oakmont Senior Living to buy up to 24 of its under-development communities for approximately $1.3 billion.
The transaction is structured as a purchase option agreement, where Healthpeak may choose to buy the properties as construction is completed and Oakmont elects to sell.
The developments are largely located in California, with planned completion dates between 2020 and 2023. Healthpeak expects $200 million of the transactions to occur during the first half of 2020.
Prices will be based on a pre-determined formula using projected year-one cash capitalization rates of 5.5 percent. After purchase, Oakmont would lease back the properties under a “highly incentivized management contract” with “a strong alignment of interest,” according to Healthpeak.
The announcement came as part of a larger series of transactions to continue transforming Healthpeak’s portfolio. The company is also starting construction of a $164 million life science development project in San Diego called The Boardwalk, and expanded its medical office development program with HCA Healthcare to include a new $46 million project in Nashville named TriStar Centennial Medical Center Campus.
“We are pleased to announce several important transactions that will be funded primarily through our recent forward equity offering and seniors housing joint venture proceeds,” says Tom Herzog, Healthpeak’s CEO. “Our portfolio repositioning included $4.5 billion of non-core seniors housing sales over the last few years in order to achieve our desired portfolio quality and mix. We are now able to focus on investing accretively in new, high-quality properties across all three of our core asset classes.”