New Senior Investment Group expects to close on $296 million in property sales during the fourth quarter.
The deals comprise the $186.0 million sale to LCS Dallas II LLC of six triple-net-leased properties, including four continuing care retirement communities, and termination of the related lease with LCS Dallas Operations LLC; and the $109.5 million sale of nine properties managed by Holiday Retirement to GAHC4 Central Florida Senior Housing Portfolio LLC.
The leased portfolio sale transaction equates to a 6.6% cap rate on second-quarter annualized net operating income generated by the portfolio, while the managed portfolio sale deal reflects a 5.1% cap rate on second-quarter annualized cash NOI. The company expects the leased portfolio sale agreement to close Nov. 15, subject to two 30-day extension options.
New Senior expects the leased portfolio sale to substantially eliminate its exposure to skilled nursing and substantially reduce its exposure to the competitive Dallas metropolitan area. It also expects the managed portfolio sale to unload noncore, underperforming assisted living/memory care facilities with low NOI margins.
The company expects net proceeds from the sales to amount to roughly $117.5 million after repaying about $178 million of existing debt. The net proceeds will go toward general corporate purposes, which may include new investments, debt prepayment and common share repurchases.