Senior Housing Properties Trust to Realize $308 Million Gain on Sale of Properties
January 02 2018 - 8:00AM
Business Wire
Senior Housing Properties Trust (Nasdaq: SNH) today announced
that it expects to report a gain of approximately $308 million on
the sale of four senior living communities.
The four communities to be sold are all currently leased to
Sunrise Assisted Living, Inc. (“Sunrise”) for terms ending December
31, 2023 (plus tenant extension options through December 31,
2033).
The four senior communities contain a total of 1,179 living
units/beds (excluding units owned by Sunrise and separately owned
independent living condominium units). The sales price which SNH
expects to receive for these four communities is $368.0 million,
plus or minus customary closing adjustments, or approximately
$312,129 per living unit/bed.
The total rent received by SNH for the communities to be sold
during the 12 months ended September 30, 2017 (including both base
and percentage rent) was approximately $14.8 million, which equates
to sale price capitalization rate of approximately 4% p.a.
The four communities were purchased by SNH in 1994 for
approximately $124.3 million. At that time, these communities were
leased to Marriott Senior Living Services, Inc., then a wholly
owned subsidiary of Marriott International, Inc. (Nasdaq: MAR). In
2003, Marriott International sold its senior living business to
Sunrise, but Marriott International has remained a guarantor of the
lease obligations due to SNH. SNH’s current book value of these
communities is approximately $60.0 million.
David J. Hegarty, President of SNH, made the following statement
at the time this news was released:
“SNH has enjoyed its long term relationship with Marriott
International at these communities and its successor tenant,
Sunrise. SNH believes these communities now require updating and
renovation capital; and the current tenant arranged for SNH to sell
these communities to a buyer interested to make the necessary
investments on terms acceptable to the tenant. In these
circumstances, now is the right time for SNH to harvest its
significant capital gains on this investment and to use the
proceeds to reduce SNH’s debt leverage and/or to re-deploy the
capital received from these sales into new investments.”
The sale of one of these communities located in Arlington, VA
was completed on December 29, 2017 in order that SNH may spread the
capital gains to be realized over two tax years. The three
additional communities are located in Boca Raton, FL, Silver
Springs, MD and Charlottesville, VA. SNH currently expects that
these three additional sales will be completed before March 31,
2018.
Senior Housing Properties Trust is a real estate investment
trust which owns senior living communities, medical office
buildings, life science and biotech research and manufacturing
properties, and wellness centers throughout the United States. SNH
is managed by the operating subsidiary of The RMR Group Inc.
(Nasdaq: RMR), an alternative asset management company focused on
real estate businesses, that is headquartered in Newton, MA.
WARNING REGARDING FORWARD LOOKING
STATEMENTS
THIS PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS WITHIN
THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
AND OTHER SECURITIES LAWS. THESE FORWARD LOOKING STATEMENTS ARE
BASED UPON SNH’S CURRENT BELIEFS AND EXPECTATIONS, BUT FORWARD
LOOKING STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR
FOR VARIOUS REASONS, INCLUDING SOME REASONS BEYOND SNH’S CONTROL.
FOR EXAMPLE:
- THIS PRESS RELEASE STATES THAT SNH
EXPECTS TO SELL ALL FOUR SENIOR LIVING COMMUNITIES FOR
APPROXIMATELY $368 MILLION AND TO REALIZE CAPITAL GAINS OF
APPROXIMATELY $308 MILLION, AND THAT THESE SALES WILL BE CONCLUDED
BY MARCH 31, 2018. SNH BELIEVES THAT ITS TENANT AT THESE
COMMUNITIES AND THE BUYER INTEND TO CHANGE THE TENANCY AND
OPERATING ARRANGEMENTS AT THESE COMMUNITIES. THESE CHANGES ARE
LIKELY TO REQUIRE LICENSING AND OTHER THIRD PARTY APPROVALS. FOR
THESE OR OTHER REASONS, THESE SALES MAY BE DELAYED, THE TERMS OF
THE SALES MAY BE CHANGED OR THESE SALES MAY NOT OCCUR.
FOR THESE REASONS, AMONG OTHERS, INVESTORS ARE CAUTIONED NOT TO
PLACE UNDUE RELIANCE UPON SNH’S FORWARD LOOKING STATEMENTS. EXCEPT
AS REQUIRED BY LAW, SNH DOES NOT UNDERTAKE TO UPDATE ITS FORWARD
LOOKING STATEMENTS AS A RESULT OF CHANGED CIRCUMSTANCES, OR
OTHERWISE.
A Maryland Real Estate Investment Trust with
transferable shares of beneficial interest listed on the Nasdaq.No
shareholder, Trustee or officer is personally liable for any act or
obligation of the Trust.
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version on businesswire.com: http://www.businesswire.com/news/home/20180102005255/en/
Senior Housing Properties TrustBrad Shepherd,
617-796-8234Director, Investor Relations
Senior Housing Properties (NASDAQ:SNH)
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