Newcastle Investment To Buy 52 Senior Housing Properties For About $1.01 Bln

(RTTNews) - Real estate investment trust Newcastle Investment Corp. (NCT) agreed Monday to acquire a 52-property portfolio of senior housing properties from certain subsidiaries of Holiday Acquisition Holdings LLC for about $1.01 billion. The deal is expected to close in December 2013.

Newcastle noted that the closure of the deal is subject to completion of financing and customary closing conditions.

Newcastle is expected to fund the deal with about $300 million of equity and non-recourse mortgage debt. The company noted that it will have invested about $600 million of equity in senior housing assets following the closure of the deal.

Holiday is the largest private owner and operator of senior housing properties in North America that operates 333 properties with 40,000 apartments in 43 states in the in the U.S. and seven provinces in Canada.

The deal will see Newcastle acquiring 52 independent living properties with 5,885 units located across 24 states. The Portfolio is 100% private pay. As at September 30, 2013, the portfolio had an average occupancy rate of 91 percent.

Following the closure of the deal, Newcastle said it will have a Senior Housing Portfolio of 99 properties with 12,347 rentable units, targeting to generate 17 percent fund from operations yield in 2014.

Holiday Acquisition is majority owned by private equity funds managed by an affiliate of Newcastle's manager Fortress Investment Group LLC, which is a global alternative investment and asset management firm with about $29.7 billion in equity capital currently under management.

Newcastle noted that it also plans to enter into two triple net master leases with affiliates of Holiday with first-year rent equal to 6.5 percent of the purchase price.

NCT closed Monday's regular trading session at $5.41, down $0.15 or 2.70% on a volume of 3.35 million shares. The stock lost a further $0.13 or 2.40% in after-hours trading.