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SAN DIEGO-Chicago-based Brookdale Senior Living Inc. makes another aggressive play with its agreement to acquire a $237-million portfolio from AEW Capital Management. The portfolio is made up of eight senior living communities in California, Washington, Ohio and New Jersey and totals 1,172 units.
Representatives from Brookdale and AEW were not available for comment, but a broker from the San Diego office of CB Richard Ellis, who represented AEW in the transaction, describes the deal as extremely complex. Lisa Widmier, senior vice president of the CB Richard Ellis Senior Housing Services Group, which includes David Rothschild and Mary Christian, says the deal was made more complex because it "involved different community types across different regions of the US" and AEW was seeking a single buyer. Previously, five operators managed the eight communities. All properties will now be managed in-house by Brookdale.
The properties in the portfolio range from stand alone assisted living facilities to larger communities, including multi-use facilities that encompass assisted living, Alzheimer's care and a continuing care retirement community. The four California properties include Glenwood Gardens in Bakersfield; Pacific Gardens of Tarzana; Pacific Gardens of Santa Monica and The Gardens of Hillsborough Village in Chino. The two New Jersey communities include Castle Senior Living at Florham Park and Castle Senior Living at Forsgate. The remaining communities include Foundation House at Federal Way in Washington, DC and the Fairways in Wickliffe, OH.
Earlier this summer, Brookdale entered into an agreement to purchase Nashville-based American Retirement Corp. for $1.2 billion in cash or $33 per share. Per the agreement of that deal, following the completion of the acquisition, American Retirement will become a wholly owned subsidiary of Brookdale. The combined company will operate a total of 73 independent living facilities with more than 13,750 units; 413 assisted living homes with approximately 21,640 beds; and 49 continuing care retirement communities with 14,680 units/beds.
According to a company statement, Brookdale has purchased or announced commitments to purchase $788.6 million in senior housing assets since its IPO in November 2005. That is not including its purchase of ARC. These acquisitions represent 107 facilities and 9,495 units/beds. Brookdale expects to invest approximately $327.8 million in equity in these transactions.
Brookdale's stock closed yesterday at $43.40, down from its opening at $43.60 on a volume of 336,800 shares. The firm's first quarter numbers, which were released in May, show an adjusted EBITDA of $26.9 million compared to $27 million in fourth quarter 2005. Funds from operations came in at $13.3 million, or 20 cents per share, compared to $10.9 million, or 17 cents per share, during the fourth quarter.
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