JER sells Genesis HealthCare assets in $2.4bn deal

The McLean, Virginia-based firm, which took Genesis private in a joint venture with Formation Capital in July 2007, has sold the 180 owned and leased facilities to listed Health Care REIT.

JER Partners has sold the real estate assets of Genesis HealthCare to listed real estate investment trust Health Care REIT in a $2.4 billion deal.

The McLean, Virginia-based private equity real estate firm said in a statement the deal comprised 180 owned and leased facilities, involving 21,800 post-acute, rehabilitation, assisted-living and long-term care beds. JER took the REIT private in a $1.52 billion deal with Formation Capital in 2007. In December, the two firms acquired six skilled nursing homes from healthcare provider Adventist HealthCare to add to the Genesis portfolio, as well as taking over management and operational responsibilities of the six facilities.

The disposition of Genesis’ real estate assets is expected to close in the second quarter. Frank Small, managing director in charge of JER’s healthcare team, said in a statement the deal allowed JER to “distribute capital back to our investors by taking advantage of today’s exceptionally strong demand for health real estate assets”. The deal has already been approved by Health Care REIT’s board of directors.

JER is becoming an increasingly active player in healthcare-related real estate, particularly in the skilled nursing sector, with the firm gearing up to raise a dedicated healthcare fund targeting up to $350 million of equity, according to people familiar with the matter. JER was unavailable for comment at press time.