Benchmark Senior Living, New England’s largest assisted living provider, has signed a definitive agreement to form an $890 million partnership with Health Care REIT (NYSE: HCN). The partnership will include 34 Benchmark senior housing communities in six New England states totaling 3,009 units. Benchmark Senior Living also will become the largest operator in Health Care REIT’s portfolio.
Under the terms of the agreement announced Feb. 15, Health Care REIT will own a 95% partnership interest and Benchmark Senior Living will own the remaining 5% interest and continue to operate the communities under a management contract. The Benchmark portfolio includes communities that provide services for independent living, assisted living, memory care and respite stay programs.
Through the partnership, Health Care REIT will receive a right to fund certain future investments pursued by Benchmark, and the parties intend to expand the portfolio within Benchmark’s existing footprint in New England. Health Care REIT anticipates growth of the Benchmark portfolio in excess of inflation in the future.
Headquartered in Toledo, Ohio, Health Care REIT invests across the full spectrum of senior housing and health care real estate. The company also provides an array of property management and development services. As of Dec. 31, 2010, the company’s portfolio consisted of 683 properties in 41 states.
“This is a wonderful development for Benchmark and for our residents and communities throughout New England,” says Thomas Grape, chairman and CEO of Wellesley, Mass.-based Benchmark Senior Living. “Health Care REIT is one of the nation’s premier investors in the field. Its goals for excellence in the senior living marketplace are perfectly aligned with ours. It’s all one could hope for in a business partnership.”
“It’s important to note that Benchmark will continue to manage these communities as part of the partnership, so there will be no change in the day-to-day operations for our residents, or our associates,” emphasizes Grape.
The majority of the Benchmark communities in the partnership agreement offer a continuum of care, which is increasingly favored by consumers who desire to age in place. These communities are considered to be among the best with regard to operations, locations and physical plants, according to Grape.
George Chapman, chairman, CEO and president of Health Care REIT, says the partnership will continue to enhance Health Care REIT’s growth potential in an important market with a top-notch operator.
“Benchmark is committed to improving the experience of senior living, as well as continuing to be one of the best places to work in the industry,” says Chapman. “The Benchmark management team has produced exceptional net operating income growth despite a challenging economic climate. We look forward to the potential for future growth with Benchmark.”
Grape founded Benchmark Senior Living in 1997. The company went on to become one of New England’s fastest growing companies and one of the fastest growing assisted living operators in the nation. Grape is past chairman of the Assisted Living Federation of America and is widely regarded as one of the founding members of the modern senior housing industry.
“Our partnership with Health Care REIT marks an important turning point in the growth of Benchmark,” says Grape. “This positions us with a strong capital partner and a stable foundation to grow. We can now add properties and pursue new initiatives, like geographic expansion beyond our six New England states.”
Health Care REIT’s stock closed at $49.76 per share on Feb. 23, up from $41.54 a year ago.