Los Angeles Business Journal

HCP to Pay $1.73 Billion for Senior Housing Portfolio

By Deborah Crowe Originally published October 17, 2012 at 1:15 p.m., updated October 17, 2012 at 11:34 a.m.

HCP Inc. has signed an agreement to buy 133 senior housing communities across the United States in a deal valued at $1.73 billion.

The Long Beach health care real estate investment trust said late Tuesday that the deal, which includes existing debt, was made with a joint venture between Emeritus Corp. of Seattle and Blackstone Real Estate Partners VI in New York.

HCP now owns 314 senior housing facilities, some of which are managed by Emeritus, a large operator of assisted living and memory care facilities. Emeritus will continue to operate these new properties in 29 states under a triple net lease.

“We are pleased to further expand our strategic relationship with Emeritus,” HCP Chief Executive Jay Flaherty said in a statement. “The transaction further demonstrates our thesis of unlocking significant value for our operating partners through real estate-driven transactions while providing our shareholders with attractive risk-adjusted returns.”

HCP, which will sell 22 million shares to finance a portion of the transaction, said it expects the deal to add 8 cents per share to its funds from operations on an annualized basis.

Shares on Wednesday closed down $1.23, or 2.7 percent, to $44.69 on the New York Stock Exchange.