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Care Capital Properties acquires nine property portfolio

Care Capital Properties has completed the acquisition of eight skilled nursing facilities and one assisted living facility in Shreveport, Louisiana and simultaneously entered into a long-term triple-net lease with Texas-based operator Senior Care Centers (SCC) to operate the acquired portfolio.

SCC concurrently acquired the operations, which also included a rehabilitative therapy company, four hospice agencies and an interest in an affiliated pharmacy provider. CCP purchased the assets for approximately USD190 million and made a USD20 million five-year, fully amortising loan to SCC, resulting in a total transaction value of USD210 million. The initial cash lease yield on the properties is 8.25 per cent, and the loan bears interest at a rate of LIBOR plus five per cent, which escalates 25 basis points annually.
 
“We are poised to continue our growth working with trusted partners such as CCP who align with our business principles and goals.”
 
“CCP is pleased to be able to grow with SCC, one of our leading operators. This transaction is an excellent illustration of our strategy to provide capital to our existing customers to help them expand their business,” CCP Chief Executive Officer Raymond J Lewis says. “With our strong operator relationships and excellent balance sheet, we are poised to continue to capitalise on the significant opportunities within the highly fragmented skilled nursing market.”
 
The acquired portfolio is being leased to SCC pursuant to a 15-year master lease containing annual rent escalations and two five-year renewal options. The properties contain a total of 1,174 beds, with an average occupancy rate of approximately 88 per cent and a Q-mix of approximately 47 per cent. Initial EBITDARM coverage for the portfolio is expected to be approximately 1.7x. As a result of the transaction, SCC is expected to account for approximately 16 per cent of CCP’s net operating income on a pro forma basis.
 
“With this acquisition, we are positioned to be the leading, full service post-acute services provider in the Shreveport market. We will continue to uphold Senior Care standards in Louisiana as we strive to meet and exceed patient expectations,” says Mark McKenzie (pictured), President and Chief Executive Officer of SCC. “We are poised to continue our growth working with trusted partners such as CCP who align with our business principles and goals.”
 

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