CNL Healthcare Trust JVs with Sunrise Senior Living on Seven-Property, $226M Agreement

CNL Healthcare Trust has signed an agreement with Sunrise Senior Living to enter into a joint venture that will change ownership of seven communities valued at approximately $226 million. Under the agreement, CNL will own 55 percent of the JV, with Sunrise retaining the remaining interest.

By Nicholas Ziegler, News Editor

Sunrise at Fountain Square in Lombard, Ill.

CNL Healthcare Trust has thrown its hat in the ring of seniors-housing acquisitions, signing an agreement with Sunrise Senior Living Inc. to enter into a joint venture that will change ownership of seven communities valued at approximately $226 million. Under the agreement, CNL will own 55 percent of the JV, with Sunrise retaining the remaining interest.

The seven properties contain 687 units and are currently wholly owned by Sunrise, which will retain management responsibilities for all the assets. The joint venture will own the Santa Monica in Santa Monica, Calif.; Sunrise on Connecticut Avenue in Washington, D.C.; Sunrise at Siegen in Baton Rouge, La.; Sunrise of Metairie in Metairie, La., near New Orleans; Sunrise of Gilbert in Gilbert, Ariz., near Phoenix; Sunrise of Louisville in Louisville, Ky.; and Sunrise at Fountain Square in Lombard, Ill., near Chicago.

Stephen Mauldin, president & CEO of CNL, noted that his firm has enjoyed a long-standing and very productive relationship with Sunrise, further saying that the seven communities are located in exceptional markets across the country.

The seven properties consist of 129 independent living units, 374 assisted living units and 184 memory-care units. The joint venture with Sunrise marks CNL’s second investment in senior housing properties since the launch of the fund in June 2011. In February, CNL Healthcare Trust purchased a portfolio of five senior living communities in the Midwest for $84 million.

Transaction volume on seniors housing has been accelerating of late. In early May, Chartwell Seniors Housing Real Estate REIT and Health Care REIT Inc. joined forces on a $931 million acquisition for 8,187 suites across 42 Canadian retirement communities, making Chartwell the largest provider of seniors housing in the country. In mid-April, Ventas entered into a definitive agreement to purchase 16 private-pay communities from affiliates of Sunrise Senior Living for $362 million. And just the week before the Ventas deal, Prudential Real Estate Investors announced that it had raised $568 million for its newest seniors housing fund, the closed-end Seniors Housing Partners IV, that will focus on existing communities, but the fund does have a limited appetite for new development, Noah Levy, managing director with PREI and the fund portfolio manager, toldĀ Commercial Property Executive.