NEW YORK CITY — New Senior Investment Group Inc. (NYSE: SNR) plans to sell 15 properties currently operated by LCS and Holiday Retirement for a total of $295.5 million.
The LCS portfolio features six triple-net leased properties and will be sold for $186 million. The sale will also terminate the lease agreement with LCS. The Holiday portfolio includes nine properties and will be sold for $109.5 million.
The buyers were not disclosed. All the properties are located in Texas and Florida, with a high concentration in the Dallas metro area. New Senior expects the transactions to close before the end of the year.
The company cited declining occupancy at the properties, and also noted the assets represent New Senior’s lowest covering triple-net leased properties. Since four of the properties in the LCS portfolio are continuing care retirement communities, the sales will also lower New Senior’s exposure to skilled nursing.
“The sales announced today significantly advance our stated objective of pursuing selective asset sales in order to enhance the overall quality of our portfolio,” says Susan Givens, New Senior’s CEO. “In addition, these sales are expected to generate significant dry powder for new investments and other initiatives.”
The LCS portfolio represents a 6.6 percent capitalization rate while the Holiday portfolio represents a 5.1 percent capitalization rate, both based on second-quarter revenues.
New Senior plans to use the funds to repay approximately $178 million of existing debt. The remainder will be used toward new investments, debt prepayment and/or repurchases of common stock, depending on market conditions.