Aviv REIT Announces $94 Million Acquisition

Aviv REIT Announces $94 Million Acquisition

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CHICAGO, July 10, 2014 /PRNewswire/ -- Aviv REIT, Inc. ("Aviv" or the "Company") (NYSE: AVIV) announced today it has acquired two assisted living facilities ("ALFs") and one post-acute and long-term care skilled nursing facility ("SNF") for $82.0 million (the "Acquisition"), and two parcels of land and the entitlements for the construction of two new ALFs and a 50 unit addition to one of the existing ALFs for $12.2 million (the "New Construction Projects"), all of which are located in Massachusetts, for a total of $94.2 million. The Acquisition includes a 126 unit ALF and a 72 unit SNF located in West Yarmouth, MA, which is in the center of Cape Cod, and a 93 unit ALF located in Weston, MA, an affluent suburb of Boston. The New Construction Projects, which are more specifically described below, include two ALFs in West Yarmouth and an ALF in Brewster, MA, also located on Cape Cod.

Aviv REIT, Inc.

The properties will be triple-net leased to existing Aviv operator Maplewood Senior Living ("Maplewood"), an operator of twelve facilities in three states, all of which are triple-net leased from Aviv. The Acquisition has an initial cash yield of 8.0%, which increases to 8.5% in year two, with CPI-based annual escalators thereafter, and an initial lease term of 10 years. The New Construction Projects have an initial cash yield of 9.0% upon completion, with CPI-based annual escalators, and an initial lease term of 10 years.

All of the properties are located in affluent, high barrier to entry markets with strong demographics. The monthly revenues per occupied room are approximately $6,000 and the occupancy of the facilities is 91%. These metrics are consistent with Maplewood's other properties in Connecticut and Ohio that are also in affluent, high barrier to entry markets with strong demographics and high occupancy. More information about Maplewood can be found below.

The total expected cost for the New Construction Projects is $69.7 million, inclusive of the $12.2 million paid for the land parcels and entitlements, with construction expected to take place from the end of 2014 to the end of 2016. The New Construction Projects are already subject to a triple-net lease with Maplewood and consist of the following:

  • A 50 unit addition to the ALF in West Yarmouth that was included in the Acquisition with a total estimated cost of $12.6 million and an initial cash yield of 9.0%. Construction is expected to begin in the second quarter of 2015 and is expected to be completed in the third quarter of 2016.
  • A 75 unit ALF in West Yarmouth with a total estimated cost of $19.8 million and an initial cash yield of 9.0%. Construction is expected to begin in the second quarter of 2015 and is expected to be completed in the third quarter of 2016.
  • A 131 unit ALF in Brewster with a total estimated cost of $37.3 million and an initial cash yield of 9.0%. Construction is expected to begin in the fourth quarter of 2014 and is expected to be completed in the second quarter of 2016.

"This deal demonstrates our ability to opportunistically acquire high-quality senior housing properties at attractive valuations, complementing our primary investment strategy of acquiring post-acute and long-term care skilled nursing facilities," said Craig M. Bernfield, Chairman and Chief Executive Officer of Aviv. "We further diversified our high-quality portfolio, adding best-in-class private pay healthcare properties in desirable northeast markets, and further enhanced our tenant diversification by materially growing our relationship with Maplewood."

Mr. Bernfield continued, "Our relationship with Maplewood is a key element of our growth strategy, as we have now successfully developed, acquired and renovated twelve assisted living facilities together. Maplewood has become a premier multi-state operator in high wealth demographic markets, providing high-quality service in hospitality-like real estate, with average monthly rates of approximately $7,000. Due to our national contacts and relationships, we are able to continue to source accretive off-market acquisitions of SNFs and ALFs, creating long-term cash flow and value for us, and a win-win dynamic for Aviv and our operators."

About Maplewood
Maplewood Senior Living, based in Westport, CT and founded in 2004, is a premier provider of high-end assisted living and memory care services in Connecticut, Ohio and Massachusetts. Maplewood operates twelve properties, consisting of six in Connecticut, one in Ohio and five in Massachusetts, all of which are leased from Aviv.

About Aviv
Aviv REIT, Inc., based in Chicago, is a real estate investment trust that specializes in owning post-acute and long-term care skilled nursing facilities and other healthcare properties. Aviv is one of the largest owners of SNFs in the United States and has been in the business for over 30 years. The Company currently owns 312 properties that are triple-net leased to 39 operators in 29 states.

For more information about the Company, please visit our website at www.avivreit.com or contact: David J. Smith, Managing Director, Investor Relations & Capital Markets at 312-855-0930.

Forward-Looking Statements
The information presented herein includes forward-looking statements. Examples of forward-looking statements include all statements regarding our future operator relationships, business strategy, projected growth opportunities and potential acquisitions. These forward-looking statements are made based on our current expectations and beliefs concerning future events affecting us and are subject to uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed in or implied by these statements. These factors include, among others: uncertainties relating to the operations of our operators; our ability to successfully engage in strategic acquisitions and investments; competition in the acquisition and ownership of healthcare properties; the availability and cost of capital; the amount and yield of any additional investments; and other factors disclosed under "Risk Factors" and elsewhere in filings made by us with the Securities and Exchange Commission. Except as required by law, we do not undertake any responsibility to release publicly any revisions to these forward-looking statements to take into account events or circumstances that occur after the date as of which such statements are made or to update you on the occurrence of any unanticipated events which may cause actual results to differ from those expressed or implied by the forward-looking statements contained herein.

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