Sabra To Acquire Minority Interest in 183-Property Enlivant Portfolio for $371M

by Jeff Shaw

IRVINE, Calif. — Sabra Health Care REIT Inc. (NASDAQ: SBRA) has agreed to acquire a 49 percent equity interest in entities that collectively own 183 seniors housing communities, all of which are operated by Enlivant. The transaction values the portfolio at $1.62 billion and Sabra’s investment at $371 million.

Enlivant is owned by funds managed by private equity firm TPG, which will remain the 51 percent majority owner. Sabra noted, however, that it plans to eventually move toward full ownership of the portfolio over the next three years.

The portfolio’s 8,280 units are spread across 20 states and are nearly all private pay.

The properties are currently 82 percent occupied. This is an increase from 60 percent in 2013, when TPG acquired troubled operator Assisted Living Concepts and installed Enlivant as the new operator of the portfolio.

Sabra, a publicly traded REIT based in Irvine, noted that the acquisition will help diversify its tenant portfolio. Following the transaction, the amount of private-pay seniors housing in Sabra’s portfolio will rise from 16.8 percent to 24.3 percent, while its skilled nursing exposure will fall from 71.1 percent to 64.7 percent.

Enlivant is the 10th largest operator of seniors housing in the United States with 231 communities and 10,794 units, according to June 1, 2017, numbers compiled by the American Seniors Housing Association. Following the Sabra transaction, Enlivant will continue to operate the 183 communities under a 10-year management contract with two five-year extension options. TPG will separately continue to own 40 Enlivant-operated communities.

The transaction, which is subject to customary closing conditions including regulatory approvals and lender consents, is expected to close prior to the end of 2017. Sabra plans to finance this investment with proceeds from its revolving credit facility and cash generated from the planned dispositions of certain facilities operated by Genesis Healthcare Inc., among others.

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