NEWTON, MA-Senior Housing Properties Trust, a locally based REIT, has closed on a $61-million deal with Alterra Healthcare Corp. to purchase 18 Alterra-owned facilities. As part of the deal, Senior Housing has provided Alterra with $6.9 million in financing. Alterra filed for bankruptcy protection in January.
The assisted-living facilities Senior Housing is acquiring are located in 10 states across the US and total 894 units. Senior Housing is leasing the properties to a subsidiary of Alterra for an initial term through 2017, plus renewal options. The rent payable to Senior Housing under this lease is $7 million per year plus increases starting in 2004 based upon gross revenues at the leased properties.
As part of the deal, Senior Housing is providing mortgage financing in the amount of $6.9 million to Alterra for six assisted living facilities with 202 living units located in two states. Senior Housing says that the loan is due in June, 2004, but the company anticipates that it may be prepaid as Alterra sells the mortgaged properties.
The bankruptcy court approved the terms of Senior Housing's investment with Alterra, and that approval includes a decision that payments due to Senior Housing under this lease and mortgage are accorded priority status under the Bankruptcy Code. Alterra has said that it will use the proceeds of this transaction primarily to refinance maturing debt, which it expects will further its plan for reorganization.
Senior Housing owns or has mortgage investments in 143 senior-living properties, including independent living apartments, assisted living facilities, nursing homes and hospitals, located in 31 states which are leased or mortgaged to various health care and senior living operating companies.
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