Six of the communities are in Ohio, four are in Indiana and two each are in Connecticut and Pennsylvania. Other states include California, Colorado, Georgia, Michigan, New Mexico, North Carolina and Virginia.
Many of the communities are in markets where Brookdale has either built or is building facilities, says Bill Sheriff, the company's CEO. The Sunrise acquisition breaks down to 876 assisted living units, 421 Alzheimer's units and 92 independent living units.
"We see significant upside potential in these assets and expect to leverage the full resources of Brookdale to quickly add operating and marketing support as well as introduce our array of ancillary services," Sheriff says. He adds that at least 80% of the units are in markets that can be immediately served with therapy and 55% with home health.
Brookdale expects to finance the transaction with approximately $134 million in mortgage debt, substantially through the assumption of existing debt, with the balance of the purchase price to be paid in cash. The deal is set to close in November and will be accretive starting next year.
Sunrise, which is in the process of restructuring, anticipates receiving $60 million in proceeds from the sale to Brookdale, some of which will be used to pay down debt. The company expects to record an impairment charge of $7 million for the third quarter to write down five of the communities to fair market value, then record a gain of $50 million once the sale is completed.
Brookdale is a leading owner and operator of senior living communities throughout the US. It currently owns and operates independent living, assisted living and dementia-care communities, along with continuing care retirement centers, with 546 communities in 35 states and the ability to serve approximately 52,000 residents.
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