Ventas Buying Out Sunrise Interests

October 5, 2010

Ventas announced this week that it has agreed to acquire the real estate interests in 58 assisted living communities from Sunrise Senior Living for a total valuation of...

$186 million, which includes about $41.5 million in a cash payment to Sunrise plus the assumption of Sunrise's pro rata share of the mortgage debt.  These interests had ranged from 15% to 25%.  Now, Ventas will own 100% of all 79 properties it purchased, but they will still be managed by Sunrise.  As part of the agreement, Ventas has agreed not to exercise performance-based termination rights during 2010 and 2011, and Sunrise has agreed to a much-reduced management fee for most of 2010 (3.50%) and all of 2011 (3.75%) before rising back to more traditional levels in 2012.  The transaction is expected to be accretive to Ventas in 2011 to the tune of $0.10 per share of funds from operations.  The $41.5 million of cash will be used by Sunrise to further reduce its debt and provides the company with more clarity and continuity with regard to its future relationship with Ventas.  Sunrise's shares moved up on the news.     

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