Senior Housing Properties Trust To Sell Two Hospitals For $90 Mln - Quick Facts
(RTTNews.com) - Senior Housing Properties Trust (SNH) announced that it has entered an agreement to sell two rehabilitation hospitals it owns to a joint venture comprised of affiliates of The Sanders Trust, LLC of Birmingham, AL and Harrison Street Real Estate Capital, LLC of Chicago, IL for $90 million. SNH currently expects to realize a gain upon completion of this sale of over $30 million.
The two hospitals to be sold are New England Rehabilitation Hospital (198 licensed beds) located in Woburn, MA and Braintree Rehabilitation Hospital (166 licensed beds) located in Braintree, MA. These hospitals were acquired by SNH in 2002; and the hospitals real estate assets are currently leased to Five Star Quality Care, Inc. (FVE).
In connection with the transactions, FVE has agreed to terminate its lease of the hospitals and transfer its operating rights and obligations, subject to regulatory approvals, to entities affiliated with Reliant Hospital Partners, LLC , a private company located in Richardson, TX, which will operate the hospitals when the sale is completed.
After completion of this sale, only 2% of SNH's total revenues will be from the ownership of healthcare facilities where Medicare and Medicaid represent a majority of revenues. The two hospitals are leased by SNH to FVE under a combination lease which also includes 51 senior living properties. The rent reduction which SNH will experience as a result of this sale will be $9.5 million per year. After this rent reduction, the total of all rent received by SNH from FVE under the four combination leases with FVE will represent only 26% of SNH's total revenues.
The sale of these hospitals is not subject to any financing condition, but the transaction is subject to various health regulatory approvals and other closing conditions typical of these types of transactions.
SNH currently expects this sale may be completed about mid-year 2014.
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