Care Capital Properties, Inc., a company with a diversified portfolio of triple‐net leased healthcare properties focused on the post‐acute sector,  announced that it has entered into a definitive agreement to acquire six behavioral health hospitals in a sale‐leaseback transaction for $400 million and to fund up to $50 million in capital expenditures to finance expansion and improvements in the portfolio.

The properties are currently owned by affiliates of Signature Healthcare Services, LLC (“Signature”), one of the largest privately owned behavioral health care providers in the United States.   Upon completion of the transaction, which is expected to occur in the second quarter of 2017, CCP will lease the properties to affiliates of Signature on a ten‐year triple‐net basis, with five renewals of five years each.  The initial GAAP yield on the transaction is expected to be approximately 8.7%, and the investment was underwritten at 1.5x EBITDAR coverage on cash rent.

“We are extremely pleased to announce this investment in a best‐in‐class portfolio of purpose‐ built behavioral real estate with a leading operator in the space.   We are excited to establish a new relationship with Signature, which has an outstanding track record as a behavioral health care provider,” CCP Chief Executive Officer Raymond J. Lewis said.  “This accretive transaction will enable us to efficiently recycle capital from our dispositions and diversify our portfolio into a new industry sector with a strategic operator, favorable investment attributes and strong cash flows.”

The portfolio is comprised of six behavioral health hospitals located in California, Arizona and Illinois.    The properties contain a total of 712 beds, and all six properties either have recently been expanded or are currently in planning or under development to increase bed capacity.  The properties primarily provide acute inpatient and outpatient psychiatric care, addiction services, geriatric psychiatric care, and child and adolescent psychiatric care.

Source: Care Capital Properties

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