NorthStar Healthcare Income Inc. closed on a $639.3 million portfolio of continuing care retirement communities in mid-June. The portfolio, from subsidiaries of Fountains Senior Living Holdings LLC sponsored by Arcapita, will continue to be operated by Watermark Retirement Communities.
NorthStar, a public, non-traded real estate investment trust sponsored by NorthStar Asset Management Group Inc., received fixed rate financing through Freddie Mac’s Multifamily-Seniors Housing Loan Program, with an aggregate principal amount of approximately $410 million and a fixed interest rate of 3.92% and a term of 7 years.
The portfolio has 15 CCRCs and 23 life estate units. The 3,600-plus units are located in 11 states, with the largest groups in New York, California, Florida and Michigan.
Watermark is an affiliate of The Freshwater Group Inc. Six entrance fee properties were acquired directly by NorthStar and leased to affiliates of Freshwater pursuant to a master net lease. The nine rental properties were purchased by a joint venture between NorthStar Healthcare and an affiliate of Freshwater. They will be operated by an affiliate of Freshwater.
This is the fourth transaction completed with Watermark, said Ron Jeanneault, chief executive officer and president of NorthStar Healthcare.
“NorthStar Healthcare’s ability to leverage established relationships with premier sponsors provides access to significant investment opportunities to further expand and diversify our senior housing portfolio,” he added, noting the transaction demonstrated the company’s positive reputation.
NorthStar’s portfolio is 37 investments with a total value of $2.1 billion, including 33 equity investments with a total cost of $1.9 billion and four debt investments with an aggregate principal amount of $145.9 million as of June 12.
This article originally appeared on McKnight's