Brookdale Senior Living Inc. announced the closing of two portfolio acquisitions, completing its three-portfolio acquisition plan initially announced in September 2024.
“We believe that Brookdale is positioned to create significant value over the next several years as we take advantage of favorable senior living industry dynamics, driven by constrained supply, an aging population, and an escalating need for high-quality, specialized services,” said Lucinda (“Cindy”) Baier, Brookdale’s President and CEO. “Through community ownership, Brookdale can fully benefit from this powerful growth outlook rather than sharing in the value-creation from our operations. We are proud that by year end we expect to own more than 75% of our consolidated unit count.”
The Company acquired five communities (686 units) previously leased from Welltower Inc. for $175 million. The communities are primarily located in affluent or very affluent markets and together comprise 270 independent living units, 170 assisted living units, 152 memory care units, and 94 skilled nursing units with weighted average portfolio occupancy greater than 90%. The acquisition purchase price, including the benefit of a favorable purchase option discount, also reflects a significant discount to the Company’s estimate of replacement cost.
The Company acquired 25 communities (875 units) previously leased from Diversified Healthcare Trust for $135 million. This portfolio is geographically diverse, includes certain communities with performance well-above the Company average, and ranges in community size from 19 units to 92 units. The portfolio includes 556 assisted living units and 319 memory care units with weighted average portfolio occupancy of approximately 80%.
The Company funded the combined $310 million cost of the two acquisitions by means of $69 million of cash on hand and $241 million of mortgage debt financing sourced by CBRE National Senior Housing.
The Company obtained $161 million of mortgage debt from Ally Bank, an existing Brookdale lender, including a combination of new loan proceeds and the refinancing of an existing loan. The $161 million loan has an initial three-year term and two one-year extension options, exercisable subject to certain performance criteria, with a final maturity date, including extension options, of February 2030. The debt is secured by first priority mortgages on 36 communities. At the time of closing, the Company repaid $50 million of Ally Bank debt on 11 communities, which held a final maturity date of February 2029.
The Company obtained an aggregate of $130 million in loans from CBRE National Senior Housing through its Freddie Mac Optigo® loan origination program. The non-recourse mortgage financing has a ten-year term and is secured by first priority mortgages on five communities. The debt bears interest at a fixed rate of 6.47% and is interest only for the first five years.
“We are pleased to have once again secured agency financing to support our business needs and strategic initiatives,” said Dawn Kussow, Brookdale’s Executive Vice President and Chief Financial Officer. “We appreciate Ally Bank, Freddie Mac, and CBRE for these financings and are grateful for their ongoing partnership.”
Brookdale Senior Living Inc. (NYSE: BKD) (“Brookdale” or the “Company”) is the nation’s premier operator of senior living communities. With 647 communities across 41 states and the ability to serve approximately 58,000 residents as of December 31, 2024, Brookdale is committed to its mission of enriching the lives of seniors through compassionate care, clinical expertise, and exceptional service. The Company, through its affiliates, operates independent living, assisted living, memory care, and continuing care retirement communities, offering tailored solutions that help empower seniors to live with dignity, connection, and purpose. Leveraging deep expertise in healthcare, hospitality, and real estate, Brookdale creates opportunities for wellness, personal growth, and meaningful relationships in settings that feel like home. Guided by its four cornerstones of passion, courage, partnership, and trust, Brookdale is committed to delivering exceptional value and redefining senior living for a brighter, healthier future. Brookdale’s stock trades on the New York Stock Exchange under the ticker symbol BKD.
