Seniors Housing Weekly Update - REIT Deals Take Center Stage

June 3, 2014


June 3, 2014. 60 Seconds with Steve Monroe. Ventas buys ARC Healthcare Trust, and CareTrust REIT is spun out of The Ensign Group

REIT Deals Take Center Stage

Is this an historic week in our market? First, we have the surprising announcement that Ventas agreed to buy American Realty Capital Healthcare Trust for $2.6 billion, just when we thought ARC Healthcare was going to announce its deal to acquire Griffin-American Healthcare REIT II for $3.7 billion. The musical chairs just don’t ever stop. It is possible that ARC II or III could be the ultimate buyer of Griffin-American, but it is just as possible that Ventas or Health Care REIT or NorthStar Realty Finance could step into the void if there even is a void. Ventas shareholders appeared underwhelmed by the ARC deal, despite the 10 cents per share accretion next year. Our estimated 6% cap rate on Ventas’ smaller $900 million deal for 29 retirement communities in Canada didn’t seem to convince shareholders either. While ARC is being snapped up, The Ensign Group completed its spin-off this week of CareTrust REIT. It has been trading between $21 and $22 per share, giving it a market cap of about $425 million. It may just be a matter of time before someone makes a land grab for this one as well.



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