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NorthStar to buy $1.05bn healthcare portfolio

The acquisition of the 80-property portfolio will grow the New York-based firm’s healthcare real estate portfolio to a total value of $1.6 billion.

Commercial real estate investment and asset manager NorthStar Realty Finance has agreed to acquire a $1.05 billion healthcare real estate portfolio from a joint venture between Alpharetta, Georgia-based investment management firm Formation Capital and global real estate and private equity firm Safanad Limited. 
 
The portfolio is comprised of 43 primarily private-pay senior housing facilities and 37 skilled nursing facilities that Formation and Geneva, Switzerland-based Safanad acquired over a three-year period. The purchase brings NorthStar’s healthcare real estate portfolio to approximately 160 properties, valued at roughly $1.6 billion.
 
NorthStar is acquiring the portfolio through a joint venture with Formation, in which NorthStar will contribute approximately 92 percent of the $430 million in equity towards the purchase. The joint venture will assume in-place financing for the remainder of the purchase price, according to a statement from NorthStar.
 
“We are very pleased to have a diversified, quality portfolio of healthcare properties added to our existing healthcare portfolio that we expect will produce attractive current and overall returns,” said David Hamamoto, NorthStar's chairman and chief executive, in the statement. “Since joining our healthcare real estate team only two months ago, Jay Flaherty has sourced an investment pipeline through his relationships in the industry that is adding significant value to the NorthStar franchise.”
 
Flaherty, who oversees NorthStar's healthcare real estate platform, is leading the expansion of the business. He joined NorthStar after being let go in October from his position as chairman and chief executive of HCP, the third-largest healthcare real estate investment trust in the US.
 
“This transaction represents an initial step towards our goal of expanding NorthStar's healthcare portfolio into a pre-eminent healthcare real estate business,” Flaherty added in the release. “We are enthusiastic that this will be the first of many compelling transactions that we can complete with our partners at Formation Capital.”