Fortress Unit to Acquire Senior Housing for $1 Billion

A unit of Fortress Investment Group LLC (FIG) agreed to buy 52 senior-housing properties across the U.S. from Holiday Acquisition Holdings LLC for $1.01 billion.

Newcastle Investment Corp. (NCT) will pay for the properties, which comprise 5,885 units, with about $300 million of equity and fund the rest of the purchase with non-recourse mortgage debt, the Fortress affiliate said yesterday in a statement. Newcastle plans to enter into two master leases with Holiday affiliates, with the deal expected to close in December, according to the statement. Rent in the first year will be equal to 6.5 percent of the purchase price, the company said.

Newcastle, a New York-based real estate investment trust, focuses its investments on senior housing and real estate debt.

Holiday is majority-owned by private-equity funds managed by an affiliate of Newcastle’s manager, according to the statement. The properties included in the proposed deal are located in 24 states, and had a 91 percent average occupancy at the end of September.

Separately, National Health Investors Inc. (NHI), a health-care REIT, agreed to acquire 25 independent-living properties from Holiday for $491 million, the Murfreesboro, Tennessee-based buyer said in a statement today. The properties have 2,841 units and had an average occupancy of 89 percent for the nine months ended Sept. 30.

National Health Investors will offer 4.5 million shares of its common stock, with proceeds used to fund a portion of the purchase, the company said today in a separate statement. Underwriters are likely to have a 30-day option to purchase 675,000 additional shares.

To contact the reporter on this story: Dan Levy in San Francisco at dlevy13@bloomberg.net

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

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