The seniors housing sector is consolidating. On Tuesday, medical office REIT Health Care Property Investors, Inc. (HCP) announced plans to buy CNL Retirement Properties for $3.6 billion. CNL, an unlisted REIT, owns a national portfolio of 200 seniors housing properties, all of which were built within the past few years.

The deal gives Health Care Property Investors the largest national portfolio of assisted living, retirement and medical office buildings. Once the deal is closed at the end of the third quarter, HCP will own roughly 800 properties scattered across 44 states. CNL, like most unlisted REITs, was required by its covenants to list or liquidate its holdings on or before 2008.

Healthcare REITs have lagged the SNL total return index for the past year. Equity REITs were up 24.81% on a total return basis over the past 52 weeks; healthcare REITs, however, were only up 11.73% during that period. That gives the sub-sector the lowest percentage increase of any REIT class during the past year.