American Healthcare REIT announced Tuesday that it has entered into a purchase agreement with NorthStar Healthcare Income that grants AHR the option to buy all of the minority membership interest held by NorthStar in Trilogy REIT Holdings the parent organization of Trilogy Health Services.

If AHR exercises the purchase option, the Irvine, CA-based real estate investment trust would own 100% of Trilogy REIT Holdings and, indirectly, 97.4% of Trilogy Investors. Trilogy Investors is the parent of Louisville, KY-based Trilogy Health Services, founded in 1997, which operates a total of 130 properties, including independent living, assisted living, memory care and skilled nursing facilities across Indiana, Kentucky, Michigan, Ohio and Wisconsin. The remaining 2.6% minority interest in Trilogy Investors primarily is owned by executives and employees of Trilogy Health Services’ operator, Trilogy Management Services.

“Trilogy has been strategically built over the course of nearly three decades in select markets that have experienced growing demand for long-term care services and in which Trilogy has established an industry-leading presence,” Danny Prosky, president and chief executive officer of AHR, said in a press release. Trilogy is one of the nation’s finest senior care operators, as evidenced by its remarkable recovery from the COVID pandemic, which battered the senior care industry.”

Under the terms of the purchase agreement, AHR may exercise the option at any time on or before Sept. 30, 2025, for an all-cash purchase price ranging from $240.5 million to $260 million, depending on the date of closing of the purchase.

“AHR can also elect to complete the purchase transaction by using a combination of cash and the issuance of new convertible preferred stock. AHR may use preferred stock for up to 90% of the purchase price, with the balance paid in cash,” the press release states.

“If issued, the preferred stock would have an initial annual dividend rate of 4.75% on the $25 per share liquidation preference of the preferred stock, with this rate increasing over time, and the preferred stock would be convertible at the holder’s option on or after July 1, 2026 into AHR common stock. AHR may also redeem the shares of preferred stock, in whole or in part, for cash at any time,” the REIT said.

The transaction closing is not subject to any regulatory approvals, according to AHR.