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Healthpeak acquires $1.3b of senior housing properties
Transactions - DECEMBER 20, 2019

Healthpeak acquires $1.3b of senior housing properties

by Andrea Zander

Healthpeak Properties has acquired 24 of Oakmont Senior Living’s housing development properties.

The properties are concentrated in California and are worth an estimated $1.3 billion.

“We are pleased to announce several important transactions that will be funded primarily through our recent forward-equity offering and senior housing joint venture proceeds,” said Tom Herzog, Healthpeak’s CEO. “Our portfolio repositioning included $4.5 billion of noncore senior housing sales over the last few years in order to achieve our desired portfolio quality and mix. We are now able to focus on investing accretively in new, high-quality properties across all three of our core asset classes.”

The acquisition options are expected to be offered in tranches between 2020 and 2023, including communities worth approximately $200 million in the first half of next year.

Once offered, Healthpeak has the option to acquire each applicable tranche of the development properties based on a predetermined pricing formula with projected year-one cash capitalization rates equal to 5.5 percent. At the closing of each development property acquisition, Healthpeak would enter into a highly incentivized management contract with Oakmont Management Group, creating a strong alignment of interest. In addition, the acquisitions would be paid for in part with downREIT units.

Other acquisitions were in the life science and medical office business.

Healthpeak will commence construction on a $164 million life science development and redevelopment project, The Boardwalk, located on Science Center Drive in the Torrey Pines life science cluster in San Diego.

The Boardwalk will be Healthpeak’s flagship campus in the core life science market of San Diego. Totaling approximately 190,000 square feet, the campus will combine three adjacent Healthpeak holdings, activating two land sites through 105,000 square feet of ground-up development that will flank both sides of an existing 85,000-square-foot property that will also be redeveloped. The Boardwalk will be a LEED-certified class A cohesive campus with a first-class amenity package that includes a full-service restaurant, indoor/outdoor meeting areas and fitness space that take advantage of the San Diego climate. Construction at The Boardwalk is expected to commence in the first quarter of 2020 to accommodate occupancy as early as the second quarter 2021.

Healthpeak has additional development projects in South San Francisco and Boston in various stages of entitlement, based on the favorable market fundamentals in life science, and the firm plans to commence one or two of these projects in 2020.

And the firm expanded its medical office development program with HCA Healthcare (HCA). The firms will be developing a 172,000-square-foot, six-story, class A medical office building located on the TriStar Centennial Medical Center Campus in Nashville. The $46 million development will expand the TriStar Centennial campus, which is HCA’s second-largest campus in the United States. The project is 45 percent pre-leased and construction is expected to begin in mid-2020. Healthpeak expects to announce additional developments to its program with HCA in 2020.

Healthpeak Properties is a fully integrated REIT and S&P 500 company. Healthpeak owns and develops high-quality real estate in the three private-pay healthcare asset classes of life science, senior housing and medical office, designed to provide stability through the inevitable industry cycles.

 

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