$211-million acquisition

"The most important aspect of this transaction is that it was done through our down-REIT, which was extremely tax efficient for the owners," James Pieczynski, CapitalSource co-president of healthcare and specialty finance, tells GlobeSt.com. CapitalSource Inc. elected REIT status via CSE SNF Holdings as of Jan. 1. The down-REIT structure of the deal allowed the company to pay much of the $211-milliion purchase price in the form of CSE SNF Holdings interests that can be traded for CapitalSource common stock shares.

St. Petersburg, FL-based Senior Health Management will continue its role as manager of the 38 long-term care properties, with CapitalSource acting as a passive real estate holder, Pieczynski says. CapitalSource, which expects to see first-year lease payments totaling approximately $21 million, has no plans to make changes to any of the facilities.

While its first down-REIT transaction was centered on Florida, CapitalSource's area of focus for acquisitions is nationwide, and the company is already looking around for more opportunities. "My goal is to do another $200 million in deals this year," Pieczynski says. Although CapitalSource is interested in all markets across the country, Pieczynski, when pinned down, says that a certain state in the west could be of particular interest. "Nevada offers a lot of opportunities. It's a growing state and there are a lot of retirees relocating there. It bodes a lot of opportunity."