Newcastle Investment has completed the acquisition of six senior housing communities for a purchase price, excluding transaction costs, of USD186 million.
The purchase price was funded with unrestricted cash at Newcastle. The six rental continuing care retirement communities (CCRCs) consist of a total of 1,265 beds and are all located in Texas.
Concurrent with the acquisition, Newcastle entered into a triple-net master lease agreement with a subsidiary of Lifecare Companies (LCS). The lease has an initial term of 15 years with two five-year renewal options. The initial cash lease yield is 7.6 per cent with 3.75 per cent increases in years two to four and 2.50 per cent in years five to 15.
LCS was established in 1971 and is a manager of CCRCs throughout the US.
Newcastle has invested more than USD700 million of equity throughout the past 24 months to acquire 95 senior housing properties with over 11,900 beds, totalling over USD1.8 billion in assets.