Blackstone Venture to Sell Senior Homes for $1.7 Billion

(Corrects company paying rent in sixth paragraph.)

A Blackstone Group LP (BX) fund and Emeritus Corp. (ESC) agreed to sell a group of senior housing properties to HCP Inc. (HCP) for $1.73 billion, the largest deal for a health-care real estate investment trust this year.

Blackstone Real Estate Partners VI bought the 133-property portfolio out of bankruptcy in 2010, HCP said in a statement today. The Long Beach, California-based company, the largest health-care REIT by market value, said the purchase will add 8 cents a share to its annual funds from operations.

Demand for senior housing is rising as the U.S. population ages. Health Care REIT Inc. (HCN) agreed in August to pay an 87 percent premium for Sunrise Senior Living Inc. (SRZ), the biggest ever for an operator of homes for the elderly. U.S. health-care REITs have announced or completed $4.6 billion in acquisitions this year, according to data compiled by Bloomberg.

The HCP transaction “significantly expands our senior- housing portfolio,” Chairman and Chief Executive Officer Jay Flaherty said in today’s statement.

HCP’s planned purchase will be the largest acquisition by a health-care REIT acquisition since Toledo, Ohio-based Health Care REIT bought almost all the real estate owned by closely held Genesis HealthCare for $2.4 billion in April 2011.

Emeritus, a Seattle-based operator of assisted-living communities, will lease the properties from HCP and continue to operate them, according to the statement. Emeritus will pay $105.5 million in rent in the first year of the lease, the company said in a separate statement. Emeritus will also purchase nine other properties from the Blackstone venture.

HCP said it expects to complete its purchase in phases beginning in November.

To contact the reporter on this story: Brian Louis in Chicago at blouis1@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net

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