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Health Care REIT Buys Out Sunrise Joint Venture Partners

Health Care REIT Inc. agreed to buy majority stakes in properties held by Sunrise Senior Living Inc. joint ventures as part of its takeover of the company, boosting the value of their combined real estate by 68 percent.

Health Care REIT and Sunrise have acquired, or agreed to acquire, majority interests in 38 of 105 joint venture properties, for a total additional investment of about $1.3 billion, Toledo, Ohio-based Health Care REIT said today in a statement. That will increase the real estate value of their merger to about $3.2 billion, compared with the $1.9 billion the companies initially estimated.

“The ability to transform what was initially announced as a $1.9 billion real estate opportunity into a $3.2 billion transaction upon closing accelerates our portfolio quality enhancement initiatives,” George L. Chapman, Health Care REIT’s chairman and chief executive officer, said in the statement.

Health Care REIT, the third-largest health-care real estate investment trust by market value, agreed to acquire McLean, Virginia-based Sunrise for about $845 million to expand its assisted-living communities, the companies said on Aug. 22.

With the buyouts of the partners, the Sunrise acquisition is now expected to include 58 wholly owned properties and 67 held in joint ventures. Fifty of those joint venture properties are subject to purchase options that give Health Care REIT and Sunrise the right to buy the majority partners’ interests.

Demand for assisted-living and senior housing is expected to rise as the U.S. population ages. The number of residents aged 65 and over will increase 79 percent through 2030, Health Care REIT said in a quarterly regulatory filing, citing Census Bureau data. The acquisition of Sunrise will expand Health Care REIT’s presence in major markets such as New York, Los Angeles, Washington and Philadelphia.

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