Chicago-based Care Capital Properties, Inc. is acquiring six behavioral health hospitals in a $400-million sale-leaseback transaction involving properties in California, Arizona and Illinois owned by affiliates of Signature Healthcare Services, LLC. The healthcare REIT also plans to fund up to $50 million in expansions and improvements in the 712-bed portfolio.
Care Capital will lease the properties to affiliates of Signature on a 10-year, triple-net basis, with five renewals of five years each. The initial GAAP yield is expected to be roughly 8.7%, and the investment was underwritten at 1.5x EBITDAR coverage on cash rent.
Care Capital’s Raymond J. Lewis said, “This accretive transaction will enable us to efficiently recycle capital from our dispositions and diversify our portfolio into a new industry sector with a strategic operator, favorable investment attributes and strong cash flows.”
The transaction is expected to be completed in Q2 2017.
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