CPPIB JV snaps up senior housing portfolio for $555m

The pension plan teamed up with NYSE-listed REIT Welltower to purchase a 97.5 percent stake in six Florida senior housing properties.

Canada Pension Plan Investment Board (CPPIB) and Welltower have acquired a 97.5 percent stake in Florida senior housing buildings from Discovery Senior Living for $555 million, the pair said Thursday.

The pair formed a joint venture which saw Toronto-based CPPIB take a minority stake, with a 45 percent interest in the six senior housing properties in Florida. Real estate investment trust Welltower, based in Toledo, Ohio, owns the remaining 55 percent of the interest in the portfolio, known as Aston Gardens.

Discovery Senior Living retained a 2.5 percent stake and will continue to operate the properties. The portfolio, which totals 1,930 rental units, comprises low-rise buildings surrounding a central clubhouse for seniors who live independently. Senior housing is a booming business in the US as the population ages and demand outstrips supply. Occupancy rates rose to above 90 percent in the fourth quarter of 2015, according to the most recent data from the National Investment Center for Seniors Housing.

“This portfolio is well-positioned to benefit from long-term demographic trends and is an attractive entry into the US seniors housing sector for CPPIB,” said Peter Ballon, CPPIB’s head of Americas real estate investments, in a statement.

The deal is the latest joint venture between CPPIB and Welltowner. In August, the groups bought a 50.5 percent interest in a Southern California portfolio of medical office buildings from another REIT. Terms of the acquisition were not made public.

CPPIB manages the assets of the C$282.6 billion ($203 billion) Canada Pension Plan.