Sule Aygoren Carranza is managing editor of Real Estate Forum and editor of Multi Housing forum, from which this article is excerpted.

GE Healthcare Financial Services has brought its total investment in real estate to more than $4 billion through the acquisition of six senior housing portfolios from Formation Capital LLC. The Alpharetta, GA-based company earned $1.4 billion in the sale, which involves 21,000 beds in 186 skilled nursing facilities around the US.

The deal, expected to close in the third quarter, also marks locally based GE Healthcare Financial's major entrance into the equity arena. For the past decade, it has been an active provider of senior debt and first-mortgage financing to industry, with senior housing properties accounting for about half its business, with medical properties and skilled nursing facilities making up 25% each. The firm currently has more than $15 billion of capital committed to the industry. It closed $1.8 billion in debt commitments last year. It has already surpassed that figure in the first half of 2006 with $2 billion worth of deals, including this one, and $600 million in debt.

According to John Cobb, senior managing director of GE Healthcare Financial's real estate division, the decision to enter the equity business was driven by consumer needs. "Our customers were demanding multiple products, such as construction loans, equity products to help facilitate capital events, joint venture equity and so forth," he explains. "So during the past year and a half, we started looking at equity investments." Though the firm has done two equity transactions before this one and is planning a couple more, the Formation deal is the largest to date and positions the company as a significant equity player in the market, says Cobb. It also allows GE to expand its reach into a booming industry. "Senior housing real estate is at the top of the market," he relates. "We think there are really good properties out there and are confident in the supply and demand fundamentals. We believe healthcare spending will be increasing by as much as 10% annually during the next few years. All of those healthcare services are going to need infrastructure. So we're looking at investments across the spectrum of healthcare real estate. The Formation portfolios fit the bill."