Ventas Buying 14 Properties for $115M

LOUISVILLE, KY-Locally based Ventas Inc. is acquiring 14 independent and assisted living facilities for $115 million. The 93%-leased portfolio includes 2,000 units in 10 states. The seller is Chicago-based Brookdale Living Communities Inc., which will continue to operate the facilities under a 15-year lease.

The first phase of the transaction, the purchase of four properties for $37 million, has been completed. Ventas says it expects to fund the transaction with cash, its revolving credit facility and the assumption of approximately $41 million of non-recourse property-level debt. The assumed debt encumbers seven of the properties, has a weighted average interest rate less than 7%, and comes due in 2005.

The purchase price in the transaction represents an approximately 11.2% capitalization rate on the properties’ EBITDA, and a per unit cost of $58,000. The annual rent on the 14 properties is expected to be $10.6 million, representing an initial cash yield of 9.25%.