KKR in $130m US senior housing deal

The New York-based private equity firm has gained exposure to the assets of one of the world’s largest senior living businesses, Sunrise Senior Living.

Kohlberg Kravis Roberts & Co (KKR), the New York-based private equity giant, has taken part in a joint investment in the management company of Mclean, Virginia-based senior living company business Sunrise Senior Living.

The deal, which also includes three other investors, gives the New York-based private equity giant not only a stake in  Sunrise’s existing management contracts covering 282 senior living communities, but also leasehold interests in 15 communities, and 12 developments.

Its partners in the transaction are fellow private equity firm, Beecken Petty O’Keefe & Company, an investment firm Coastwood Senior Housing Partners, and Health Care REIT – the latter having taken over Sunrise Senior Living last month in a deal valued at about $845 million.

The acquisition by Health Care REIT saw it inherit Sunrise’s 20 wholly owned senior housing communities in the US and Canada as well as interests in joint ventures that own 105 communities in the US and the UK. Health Care REIT is also expected to take a 20 percent interest in the follow-up deal for the management company with KKR and its partners controlling the rest.

In the announcement, Ralph Rosenberg, global head of real estate at KKR, lauded Sunrise’s relationships with the “industries’ most respected property owners”.

Sunrise Senior Living currently operates 307 senior living communities in the US, Canada and the UK, comprising 29,800 units.

KKR managed $61.5 billion of assets as of June 30. The firm started a dedicated real estate division in March 2011 with the hire of Rosenberg although has previously invested in companies with significant real estate components via its other divisions.