PREI bought out as Healthcare REIT consolidates

The sale of interests in five care homes in the UK by the Prudential-owned business comes in the aftermath of US senior living landlord HealthCare REIT’s takeover of operator Sunrise Senior Living last month.

Pramerica Real Estate Investors (PREI) has sold a portfolio of interests in UK care homes to HealthCare REIT as the US senior living property REIT consolidates its property empire following its takeover of Sunrise Senior Living.

PREI, the European arm of the real estate investment management and advisory business of insurance giant Prudential Financial, announced today it had sold five care homes for £154 million (€191.4 million; $250 million).

The sale of the homes, which contain 522 beds, comes one month after Toledo, Ohio-based HealthCare REIT, already one of the biggest senior living property owners in the worlds with more than $15 billion of assets under management, created an even bigger business with the acquisition of Senior Sunrise Living in a deal valued at approximately $845 million.

The takeover of McLean, Virginia-based Sunrise Senior Living sees HealthCare REIT inherit a business which operates 307 senior living communities with a capacity of 29,800 units. The deal includes the purchase of 20 wholly owned communities in the US and a Canada as well as interests in joint ventures that own 105 communities in the US and the UK. Among those JVs were the assets in the PREI sale announced today.

For PREI, the sale represents an exit from the final five communities it held in two separate JVs with Sunrise Senior Living set up in 2005 and 2007. At their biggest, the JVs held 22 senior living facilities comprising 2,100 beds. The assets’ total investment volume was approximately £700 million.

Philip Barrett, managing director at Pramerica, said: “The sale of these assets represents an excellent overall outcome for our senior living investment strategy. This is a sector that we identified some time ago as offering significant potential for value growth, and the pricing we have demonstrated on our sales shows the strong location and quality of the assets as well as the out performance that has been achieved by our partner Sunrise.”

CBRE, PwC and Eversheds advised the JVs on the sales.

The news of this sale comes just one day after New York-based private equity firm Kohlberg Kravis Roberts & Co announced it was part of a private equity consortium which acquired the management company of Sunrise Senior Living. Investing $130 million, the consortium acquired management contracts for 282 of Sunrise Senior Living’s facilities as well as leasehold interests in 15 communities and ownership of 12 developments.