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Share Name | Share Symbol | Market | Type |
---|---|---|---|
New Senior Investment Group Inc | NYSE:SNR | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 8.82 | 0 | 01:00:00 |
New Senior Investment Group Inc. (“New Senior” or the “Company”) (NYSE: SNR) announced today that it expects to complete $296 million of asset sales (the “Transactions”) during the fourth quarter of 2017. The Transactions include (i) a $186.0 million sale of six triple net leased properties, as well as termination of the related lease with LCS (the “Leased Portfolio Sale”) and (ii) a $109.5 million sale of nine properties managed by Holiday Retirement (the “Managed Portfolio Sale”).
The Transactions offer distinct strategic benefits. The properties in the Leased Portfolio Sale have experienced significant occupancy and EBITDARM declines since acquisition, and the sale will eliminate the Company’s lowest covering triple net lease portfolio. In addition, the Leased Portfolio Sale, which includes four Continuing Care Retirement Communities (“CCRCs”), will substantially eliminate the Company’s exposure to skilled nursing and significantly reduce exposure to the competitive Dallas, Texas metropolitan area. The Managed Portfolio Sale will divest non-core, underperforming assisted living / memory care (“AL/MC”) assets with low net operating income (“NOI”) margins.
“The sales announced today significantly advance our stated objective of pursuing selective asset sales in order to enhance the overall quality of our portfolio. In addition, these sales are expected to generate significant dry powder for new investments and other initiatives,” New Senior Chief Executive Officer Susan Givens said.
Total consideration of $186.0 million for the Leased Portfolio Sale represents a 6.6% cap rate on 2Q 2017 annualized NOI generated by the underlying portfolio, and represents an 8.2% lease yield on 2Q 2017 annualized cash rent. Total consideration of $109.5 million for the Managed Portfolio Sale represents a 5.1% cap rate on 2Q 2017 annualized cash NOI.
In connection with the Transactions, the Company expects to repay approximately $178 million of existing debt with a weighted average interest rate of approximately 4.6%. After debt repayment, the net proceeds from the Transactions will be approximately $117.5 million (before fees and expenses). The Company intends to use the net proceeds for general corporate purposes, which may include new investments, debt prepayment and/or repurchases of common stock, depending on market conditions.
More detail about the benefits of the Transactions is set forth below:
The impact of the Transactions on various portfolio metrics is summarized below.
Metric 2Q'17Illustrative -2Q’17 Excl. Sale Assets
Total Number of Properties 148 133 Total Portfolio NOI - % Triple Net 51% 49% Total Portfolio NOI - % Managed 49% 51% Total Portfolio NOI - % IL 72% 80% Total Portfolio NOI - % AL/MC 19% 17% Total Portfolio NOI - % CCRC 9% 3% Triple Net Portfolio - EBITDARM Coverage 1.17x 1.19x Same Store Managed Portfolio - RevPOR $3,009 $3,085 Same Store Managed Portfolio - Occupancy 86.2% 86.8% Same Store Managed Portfolio - NOI Margin 32.6% 34.5%The closings of the Transactions, which are independent of one another, are expected to occur by the end of 2017, subject to customary closing conditions. However, there can be no assurances that the Transactions will be completed on the terms and within the timeframe described herein, or at all. There can also be no assurance that actual results would equal the illustrative information contained herein, and any differences could be material.
ABOUT NEW SENIOR
New Senior Investment Group (NYSE: SNR) is a publicly-traded real estate investment trust with a diversified portfolio of senior housing properties located across the United States. As of June 30, 2017, New Senior is one of the largest publicly-traded owners of senior housing properties, with 148 properties across 37 states. New Senior is managed by an affiliate of Fortress Investment Group LLC, a global investment management firm. More information about New Senior can be found at www.newseniorinv.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain items in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements regarding the expected completion of asset sales, the expected impact of those sales on the Company and the anticipated use of proceeds. These statements are not historical facts. They represent management’s current expectations regarding future events and are subject to a number of trends and uncertainties, many of which are beyond our control, that could cause actual results to differ materially from those described in the forward-looking statements. Accordingly, you should not place undue reliance on any forward-looking statements contained herein. For a discussion of some of the risks and important factors that could affect such forward-looking statements as well as the illustrative information contained herein, see the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s annual and quarterly reports filed with the Securities and Exchange Commission, which are available on the Company’s website (www.newseniorinv.com). New risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Any of these risks could impact the ability to complete the Transactions on the terms and within the timeframe described herein and the ability to deploy the net proceeds into new investments or other initiatives. Forward-looking statements contained herein speak only as of the date of this press release, and the Company expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.
View source version on businesswire.com: http://www.businesswire.com/news/home/20171005006391/en/
New Senior Investment Group Inc.David Smith, 212-515-7783
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