HCP Announces Several Mutually Beneficial Transactions With Brookdale

(RTTNews) - HCP, Inc. (HCP) announced Tuesday several mutually beneficial transactions with Brookdale Senior Living Inc. (BKD) related to HCP's 15-campus CCRC joint venture and triple-net portfolio with Brookdale.

These transactions will position HCP to improve operator diversification, acquire Brookdale's interest in 12 CCRC campuses and strengthen the remaining Brookdale triple-net portfolio.

HCP will acquire Brookdale's remaining 51 percent joint venture interest in 12 entry fee CCRCs with 5,641 units for $510 million, expected to close in the first quarter of 2020, subject to customary closing conditions. HCP and Brookdale also agree to terminate management agreements on the 12 CCRCs, with HCP paying $100 million termination fee to Brookdale.

HCP and Brookdale will then jointly market for sale to third parties the remaining three CCRCs in the existing joint venture, expected to close over the next 12 to 18 months.

Further, Brookdale will acquire 18 triple-net leased properties from HCP for $405 million. HCP and Brookdale also agree to restructure the 24 remaining Brookdale triple-net leased properties into a single master lease.

HCP will also provide up to $35 million capital investment in the remaining triple-net portfolio over a 5-year term and receive a 7% initial return on the invested capital.

These transactions are expected to reduce HCP's Brookdale concentration from 16% to 8% of cash NOI on a pro forma basis.