Transactions & Financings: Brookdale’s $200M Senior Note Offering; Ventas Completes $2.3B New Senior Acquisition

Brookdale Senior Living (NYSE: BKD) is taking further steps to restructure its outstanding debt.

The Brentwood, Tennessee-based owner and operator of senior housing communities on Tuesday announced plans to offer up to $200 million in convertible senior notes, due on October 15, 2026. The notes are unsecured obligations of Brookdale, and interest will be paid in arrears, semi-annually.

Brookdale intends to use proceeds from the offering for general corporate purposes, including refinancing or repaying maturing and other debt. Additionally, proceeds are earmarked to pay the costs of capped transactions with one or more of the initial purchasers of the notes.

The capped call transactions will initially cover predetermined shares of Brookdale common stock that will initially underlie the notes, and are expected to reduce or offset potential dilution to holders of Brookdale’s common stock upon conversion of the notes.

Sales and operator transitions

Ventas completes $2.3B New Senior acquisition

Ventas (NYSE: VTR) completed its $2.3 billion, all-stock acquisition of New Senior Investment Group.

Under the terms of the agreement, New Senior stockholders are entitled to receive 0.1561 shares of newly issued Ventas common stock for each share of New Senior common stock that they owned immediately prior to the effective time of the merger.

Also with the deal, New Senior is no longer traded on the New York Stock Exchange.

Diversified Healthcare Trust transitions 7 Five Star communities

Diversified Healthcare Trust (Nasdaq: DHC) transitioned five assisted living communities in Wisconsin, totaling 300 units, from Five Star Senior Living (Nasdaq: FVE) to the management agreement it holds with Cedarhurst Senior Living. The REIT also entered into a new management agreement with IntegraCare for two assisted living facilities in Pennsylvania, totaling 182 units.

Diversified has now entered into new management agreements for 91% of the 108 communities it is transitioning from Five Star to new operators.

Focus Healthcare Partners, LCS acquire California community

A joint venture of an affiliate of Focus Healthcare Partners and Life Care Services acquired Oakmont Gardens Retirement Community, a 163-unit rental retirement community in Santa Rosa, California consisting of 107 independent living units and 56 assisted living units. LCS will manage the community.

Chicago Pacific Founders acquire Mississippi community

Chicago Pacific Founders acquired The Magnolia at Oxford Commons, a 100-unit senior living community in Oxford, Mississippi. The property, formerly known as The Blake at Oxford, will be managed by CPF’s wholly-owned management subsidiary, Grace Management.

Financings

Sabra announces, prices $800M senior notes offering

Sabra Health Care REIT (Nasdaq: SBRA) through its subsidary, Sabra Health Care Limited Partnership, priced and entered into an agreement to issue and sell, subject to certain conditions, $800 million in 3.2% senior notes due in 2031. The offering is expected to close on September 30, 2021.

Proceeds will be used to redeem all of the 2024 Notes and repay approximately $345 million of its U.S. dollar term loans maturing on September 9, 2023, and the remaining net proceeds to fund future investments or for general corporate purposes.

AHEPA Management receives $17M in HUD grants for affordable senior housing

AHEPA Affordable Housing Management Company received two U.S. Housing and Urban Development (HUD) Section 202 Supportive Housing for the Elderly program grant awards totaling $16.7 million to support the development of new affordable multifamily rental housing for very low-income seniors in Des Moines, Iowa, and South Bend, Indiana.

The award for the 100-unit Des Moines project is $8.9 million. The award for the 80-unit South Bend project is $7.8 million.

MassDevelopment awards $81K grant for housing, health care center redevelopment

MassDevelopment awarded $80,500 from the Brownfields Redevelopment Fund to North Shore Community Development Coalition, to perform environmental site assessments on four parcels in the Point neighborhood in Salem, Massachusetts.

North Shore CDC will collaborate with North Shore Community Health (NSCH) to build the South River Revitalization Project at the site, which will include a 50-unit affordable senior housing facility and nonprofit center featuring a state-of-the-art health center, consolidated NSCH administrative offices, and other office space for area nonprofits.

BHI Healthcare Group arranges $31M acquisition financing for New Jersey assisted living facility

BHI Healthcare Group $31.1 million to Lionstone Care for the acquisition of a 110-unit, 130-bed assisted living and memory care facility in southern New Jersey. Amenities at the facility include five living rooms, a library, game room, tearoom, three dining rooms, a beauty salon, and a variety of activities for residents.

Ratings Outlooks

Fitch announces 2 CCRC rating updates

Fitch Ratings announced updates for the following continuing care retirement communities:

— Fitch upgraded the issuer default rating for Odd Fellows Home of California, in Thermalito, to “BBB.” Odd Fellows has a $72.5 million of series 2012 Cal Mortgage insured revenue bonds outstanding. The rating outlook is revised to stable from positive, reflecting improvement in the campus’ overall financial profile as a result of the significant fill-up of the expansion units at The Meadows of Napa Valley, and pay down of associated temporary debt.

— Fitch affirmed the “BBB” issuer default rating to Jefferson’s Ferry in Setauket, New York, and affirmed the “BBB” rating on series 2016, 2020A and 2020B bonds issued by Town of Brookhaven Local Development Corporation on behalf of the community. The rating outlook is stable, reflecting the expected resilience of Jefferson’s Ferry’s financial profile and the strength of its business profile, characterized by historically high occupancy in its independent living cohort, adequate operations and high leverage and debt burden associated with the community’s current capital expansion and repositioning project.

Technology

Greystone launches redesigned website

Senior living consulting firm Greystone launched a recently redesigned website aimed to be more user friendly, while communicating clearly expertise and value while giving the brand a more modern look and feel.

The site includes new features that help visitors explore and learn all that Greystone has to offer in a more efficient manner, including a more robust content library; an interactive project map where visitors can filter and download results to send examples to their boards, executive leadership, and teams; and a flipbook which allows visitors to flip through and download a digital version of the firm’s new “Discover Greystone” piece.

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