Health Care REIT Inc, a US-based senior housing and health-care properties owner, yesterday said that it will acquire Sunrise Senior Living Inc for about $845 million in cash.

The acquisition would enable Health Care REIT to become the world's largest owner of seniors' housing.
McLean, Virginia-based Sunrise operates 307 senior housing communities in the US, Canada and the UK with a unit capacity of approximately 29,800 units.

Sunrise offers a full range of personalised senior living services, including independent living, assisted living, care for individuals with Alzheimer's and other forms of memory loss, as well as nursing  and rehabilitative services.

As part of the transaction, Toledo, Ohio-based Health Care REIT will acquire Sunrise's 20 wholly-owned seniors housing communities and its interest in joint ventures that own 105 seniors housing communities. 

Of the 20 wholly-owned seniors housing communities, 17 are located in the US and 3 in Canada, while 78 of the 105 joint venture communities are located in the US and 27 in the UK.

The portfolio of the seniors housing communities is concentrated in prime cities like New York, Los Angeles, San Francisco, Washington, D.C., Philadelphia, Boston, Chicago, and London. 

Health Care REIT said that the purchase price reflects a estate value of approximately $1.9 billion, of which approximately $950 million will be paid in cash and the balance through the assumption of debt at an average interest rate of approximately 4.9 per cent.

Health Care REIT also said it would realize over $2 billion in real estate by purchasing additional interests from Sunrise's joint venture partners over the next two years.

At the time of acquisition, Health Care REIT expects to own on average an approximately 28 per cent interest in the 105 joint venture communities.  Of the 105 joint venture communities, 37 have purchase options that are exercisable in 2013, while 13 have purchase options that are exercisable in 2014, and 21 are subject to open buy/sell rights that could result in Health Care REIT acquiring a 100 per cent ownership interest. 

Post closing, Health Care REIT will own more than 58,000 units of senior housing, according to a press release.

Health Care REIT, Inc., an S&P 500 company with headquarters in Toledo, Ohio, is a real estate investment trust that invests in seniors housing and health care real estate. The company's portfolio consists of 1,010 properties in 46 US states and Canada.  

''Sunrise has been a leader in the transformation of seniors housing.  This transaction positions us to build on our collaborative, relationship based investment philosophy and benefit from the ongoing transformation of the sector. There are few opportunities to acquire assets of this quality in a transaction of this scale,'' said George Chapman, chairman and CEO of Health Care REIT.