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Brookdale to Buy 30 Leased Senior Living Communities for $290M

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BKD$10.12 −1.17%WELL$230.14 −0.07%

Brookdale Senior Living Inc. (NYSE:BKD) has agreed to buy the real estate of 30 leased senior living communities from Welltower Inc. (NYSE:WELL) for $290 million. Brookdale currently operates the properties, which encompass 1,152 assisted-living and memory-care units across 13 states. The transaction is scheduled to close in the fourth quarter.

The acquisition allows Brookdale to expand its owned property footprint to nearly 80% of its consolidated portfolio while reducing annual cash rent increases. The company expects the transaction to increase both adjusted EBITDA and adjusted free cash flow. Brookdale plans to fund the $290 million purchase using cash on hand along with non-recourse mortgage debt.

Alongside the purchase, the two companies agreed to amend a separate lease covering 39 communities, extending its term through June 2036. The modification grants Brookdale flexibility to exercise a fair market value purchase option at any time during the lease term. Investors will watch for the final closing of the acquisition in the fourth quarter and the resulting impact on operating metrics.

Key points

  • Brookdale Senior Living Inc. (NYSE:BKD) is acquiring 30 leased senior living communities from Welltower Inc. (NYSE:WELL) for $290 million.
  • The deal covers 1,152 assisted-living and memory-care units across 13 states and is scheduled to close in the fourth quarter.
  • The purchase will raise Brookdale's owned unit proportion to nearly 80% and is expected to increase adjusted EBITDA and free cash flow.
  • Brookdale will fund the acquisition using cash on hand and non-recourse mortgage debt.
  • A separate lease amendment extends Brookdale's lease on 39 Welltower communities through June 2036.

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Questions and answers

How much is Brookdale paying Welltower for the 30 communities?

Brookdale Senior Living Inc. agreed to pay $290 million to acquire the real estate of the 30 senior living communities from Welltower Inc.

How will Brookdale fund the purchase of the senior living communities?

Brookdale plans to fund the $290 million purchase using cash on hand and non-recourse mortgage debt.

When is the acquisition expected to close?

The transaction is expected to close in the fourth quarter.