Griffin-American Healthcare REIT II, Inc. is buying 44 senior care facilities in the U.K. for Â£298.5 million ($450.9 million), its first investment in Europe.
California-based Griffin-American agreed to buy the U.K. Senior Housing portfolio from Myriad Healthcare Limited which includes facilities in England, Scotland and the Channel Island of Jersey.
"As in the United States, the population of the United Kingdom is rapidly aging, creating greater demand for senior care," Danny Prosky, president of the REIT, said in the release.
Almost 52 percent of the U.K. portfolio's year-end 2012 revenue came from private resident payments, higher than the U.K. national average of 32 percent for private pay income, according to the release.
In the agreement, the U.K. portfolio will be leased to Myriad Healthcare, which will operate as Caring Homes under 35-year absolute net leases with annual rent escalations. The REIT will also provide construction financing for new senior housing developments. It will then buy the developments at construction cost and lease to Myriad.
"Upon completion of this acquisition, Griffin-American Healthcare REIT II will add a significant international presence to an already extensive national footprint, creating one of the largest and best diversified healthcare REITs in the world in terms of geography, revenue sources and asset types," Jeff Hanson, chief executive of the REIT said in the announcement.
The portfolio will exceed $2.0 billion, based on aggregate purchase price following the acquisition, the firm said.
The acquisition is expected to add about 962,000 square feet to Griffin-American's portfolio, which has grown 255 percent, based on purchase price, since January 2012, the REIT said. The REIT is co-sponsored by American Healthcare Investors and Griffin Capital Corp.
The sale is expected to close in the third quarter of 2013.