Among the highlights for the new venture is the fact that this is a large-scale national portfolio that totals 8,280 owned by Chicago-based Enlivant—one of the largest senor-living operators in the US—across 20 states. The communities are located in markets that exhibit stable demographics and limited new supply and are nearly 100% private pay. The majority of the portfolio consists of homogenous, purpose-built assets, which Sabra expects to drive operating efficiencies.

The portfolio is currently 82% occupied, up from 60% in 2013 when Enlivant began managing the communities, and Sabra believes there are opportunities for additional NOI growth as the portfolio reaches full stabilization. Also, the transaction creates a strategic partnership with a management team that holds a long track record of driving significant operational and financial growth on a national scale. In addition, the transaction further diversifies the Sabra portfolio by tenant and increases Sabra's NOI derived from private-pay senior housing.

Sabra is making this investment with the expectation that, subject to the performance of the joint ventures, the REIT would ultimately own the entire 183-asset portfolio, and accordingly, the joint-venture agreements include an option for Sabra to acquire the remining majority interest in Enlivant Joint Ventures over the next three years. Sabra also expects the Enlivant management team to deliver significant growth to its joint ventures through high-ROI projects and potential future expansions of existing communities. Additionally, as a strategic partner to Enlivant, Sabra anticipates a robust pipeline of incremental acquisition and development opportunities.

Assisted-living/memory-care facilities offer attractive industry fundamentals since they are needs driven, and the growing US senior population and increasing senior-housing penetration rate should provide sustained long-term-demand tailwinds for this sector.

Enlivant is owned by private-equity funds managed by TPG, which will remain the 51% majority owner in the Enlivant Joint Ventures following Sabra's initial investment. Following the closing of the transaction, Enlivant will continue to manage the Enlivant Joint Ventures under a new, 10-yiear management contract with two sequential five-year extension options, TPG Real Estate will separately continue to own more than 40 senior-living communities mainly acquired in late 2016 which will continue to be managed by Enlivant.

According to Tripp Johnson, a partner at TPG Real Estate and a member of the board at Enlivant, “This is a highly strategic transaction for Enlivant, Sabra and TPG. Sabra's investment is a testament to the tremendous progress Enlivant has made toward stabilizing this large, national portfolio.”

IRVINE, CA—Sabra Health Care REIT Inc. has entered into definitive agreements to acquire a 49% equity interest in entities that collectively own 183 senior-housing communities managed by Enlivant Joint Ventures. The portfolio is valued at $1.62 billion, and Sabra's minority-interest investment is valued at $371 million; the transaction is expected to close by year-end 2017.

As we reported in August, Sabra and Care Capital Properties Inc. completed their $7.4-billion merger, first announced this past May. Shareholders in both REITs approved the transaction earlier this week. The combined company will be led by current Sabra CEO Rick Matros from its headquarters here and will continue trading under the SBRA ticker on Nasdaq.

According to Matros, “The Enlivant Joint Ventures provide us with a unique opportunity to partner with an industry-leading management team while continuing our portfolio diversification strategy. The strong performance of this portfolio along with the embedded growth opportunities makes this investment an ideal catalyst to the transformation of our portfolio post-CCP merger.”

Sabra declined to comment further to GlobeSt.com on the transaction.

Among the highlights for the new venture is the fact that this is a large-scale national portfolio that totals 8,280 owned by Chicago-based Enlivant—one of the largest senor-living operators in the US—across 20 states. The communities are located in markets that exhibit stable demographics and limited new supply and are nearly 100% private pay. The majority of the portfolio consists of homogenous, purpose-built assets, which Sabra expects to drive operating efficiencies.

The portfolio is currently 82% occupied, up from 60% in 2013 when Enlivant began managing the communities, and Sabra believes there are opportunities for additional NOI growth as the portfolio reaches full stabilization. Also, the transaction creates a strategic partnership with a management team that holds a long track record of driving significant operational and financial growth on a national scale. In addition, the transaction further diversifies the Sabra portfolio by tenant and increases Sabra's NOI derived from private-pay senior housing.

Sabra is making this investment with the expectation that, subject to the performance of the joint ventures, the REIT would ultimately own the entire 183-asset portfolio, and accordingly, the joint-venture agreements include an option for Sabra to acquire the remining majority interest in Enlivant Joint Ventures over the next three years. Sabra also expects the Enlivant management team to deliver significant growth to its joint ventures through high-ROI projects and potential future expansions of existing communities. Additionally, as a strategic partner to Enlivant, Sabra anticipates a robust pipeline of incremental acquisition and development opportunities.

Assisted-living/memory-care facilities offer attractive industry fundamentals since they are needs driven, and the growing US senior population and increasing senior-housing penetration rate should provide sustained long-term-demand tailwinds for this sector.

Enlivant is owned by private-equity funds managed by TPG, which will remain the 51% majority owner in the Enlivant Joint Ventures following Sabra's initial investment. Following the closing of the transaction, Enlivant will continue to manage the Enlivant Joint Ventures under a new, 10-yiear management contract with two sequential five-year extension options, TPG Real Estate will separately continue to own more than 40 senior-living communities mainly acquired in late 2016 which will continue to be managed by Enlivant.

According to Tripp Johnson, a partner at TPG Real Estate and a member of the board at Enlivant, “This is a highly strategic transaction for Enlivant, Sabra and TPG. Sabra's investment is a testament to the tremendous progress Enlivant has made toward stabilizing this large, national portfolio.”