Formation, Safanad JV Buys Nursing Facilities Portfolio for $150M

Formation Capital and Safanad Ltd. have acquired a portfolio of 14 skilled nursing facilities in the mid-Atlantic region for approximately $150 million.

Formation Capital, a healthcare-focused private investment company, and Safanad Ltd., a global principal investment firm, have acquired a portfolio of 14 skilled nursing facilities in the mid-Atlantic region for approximately $150 million.

The seller was not identified but the facilities are operated by Consulate Health Care, the sixth largest provider of skilled nursing care. The portfolio is comprised of 1,658 beds. It has 11 facilities in Virginia, two in Maryland and one in Pennsylvania, according to a joint news release from the buyers.

“This transaction represents another solid investment that gives us an opportunity to leverage our healthcare and operating expertise as well as strengthen our relationship with a best in class operator,” Arnold Whitman, chairman of Alpharetta, Ga.-based Formation Capital, said in the news release.

Formation and Safanad are longtime partners on healthcare acquisitions. In March, the partners sold a $1.05 billion seniors housing and skilled nursing portfolio to NorthStar Realty Finance Corp. It was comprised of 43 primarily private-pay seniors housing and 37 skilled nursing facilities in 14 states, with 35 percent of the assets in Florida. The partners had jointly acquired the portfolio over three years. While Safanad sold its portion of the assets to NorthStar, Formation became NorthStar’s JV partner on the deal.

At the time of the March sale, Safanad’s CEO Kamal Bahamdan said the firm would continue to explore investments in the sector.

Vincent Pica, Safanad managing partner and president of Safanad Inc., the U.S. subsidiary of Safanad Ltd. noted that the new acquisition “represents another step in the multi-year strategic partnership between Formation Capital and Safanad.”

“We continue to explore investment opportunities in the healthcare real estate sectors and this acquisition demonstrates our commitment to our sector and to our investment partners,” Pica said in the news release.

Prior to this recent acquisition, another large deal by Formation and Safanad came in July 2013, when the firms paid $400 million for a portfolio of 36 seniors housing communities. That portfolio had 2,600 units in 13 states with 65 percent assisted living, 18 percent independent living and 16 percent memory care. The previous year, the partners had picked up a 68-property portfolio of skilled nursing facilities on the East Coast for $750 million.

Safanad, with offices in New York, Dubai, London and Geneva, invests in real estate, private equity and public markets across the United States, Europe, Middle East and Asia.

Since 1999, Formation Capital has overseen the investment of more than $5.5 billion of capital in seniors housing and care, post-acute services and healthcare real estate.