By Jon Peterson
Irvine, Calif.-based Griffin-American Healthcare REIT IV has paid $48.5 million to acquire a portfolio of senior housing properties in Belmont/Redwood City, Fairfield, Menlo Park and Sacramento, according to a public filing with the company.
The addresses of the properties are 800 Roble Avenue in Menlo Park, 900 6th Avenue in Redwood City/Belmont, 1095 East Tabor Avenue in Fairfield and 1922 Morse Avenue in Sacramento. All of the properties have single buildings with the exception of Redwood City/Belmont, which involves two buildings.
The sellers of these properties were from multiple entities affiliated with Nazareth Healthcare, an unaffiliated third party represented by Grant Goodman and Chad Elliott of Lancaster Pollard & Co.
“We like the Northern California market to invest in health care real estate. This region has a large elderly population, and it’s a very stable market overall,” says Stefan Oh, executive vice president of acquisitions for Griffin-American.
The properties that were acquired total 134,000 square feet and include a mixture of assisted living, memory care and skilled nursing property types. The assets are 100 percent occupied and operated by Colonial Oaks Master Tenant, LLC under a 15-year absolute net lease with annual rent escalators of 6.5 percent after the first year and 2.5 percent thereafter.
REIT IV will be buying some additional assets in Northern California in the near future. These will be two buildings in Napa and one in Sonoma. The closing on these properties will either happen late in 2017 or early 2018. The REIT declined to state what it will pay for these three buildings.
REIT IV has a national scope for buying health-care related real estate. One of its targeted regions is the West Coast. This would involve assets from the State of Washington to Southern California. Its transactions could either be the purchase of single properties or portfolio deals. The types of assets could include assisted lived, skilled nursing, memory care, hospitals, medical office buildings and possibly some life science properties. It only invests in existing and stabilized assets.
Griffin-American Healthcare REIT IV is a public real estate investment trust that is not traded on any exchange. The sponsors of the REIT are American Healthcare Investors and Griffin Capital Company. The REIT made its initial acquisition in June of last year. Including the group of five buildings it bought in Northern California, the investor has now acquired a total of 27 medical office buildings and senior housing assets for an aggregate contract purchase price of $318 million