Seniors Housing Weekly Update - REIT Investment Concentration

February 25, 2014

 
February 25, 2014. 60 Seconds with Steve Monroe. With the acquisition of Emeritus by Brookdale Senior Living, 571 of the combined entity's properties will be owned by just three REITs.

REIT Investment Concentration

There has obviously been a lot of talk and whispers regarding last week’s blockbuster merger announcement between Brookdale Senior Living and Emeritus. One aspect of the deal that has come up is the concentration of assets with the Big Three REITs. Assuming the deal does close later in the year, Health Care REIT, HCP and Ventas will own a combined 571 properties managed by the resulting company, dubbed “Brookitus” by one market participant. That actually represents 49.2% of the combined entity’s properties. HCP has the largest share, with 258 buildings, followed by Ventas with 167 and Health Care REIT with 146, at last count. There has been some concern about this level of concentration within each REIT. But the reality is that Brookitus would still represent less than 10% of the assets of any of these REITs, so we are not real concerned about any potential financial fallout if things became unplugged, so to speak. Now, if two of the Big Three seek their own merger, now that would be interesting. There we go again……

 

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