HealthLease Properties REIT Agrees to Acquire Fourth Development Property from Mainstreet Property Group

HealthLease Properties Real Estate Investment Trust (HealthLease) has agreed to acquire a newly-built, fully leased 100-unit seniors housing and care facility from Mainstreet Property Group, LLC (Mainstreet), the asset and property manager for the REIT. The facility is leased on a triple-net basis to Life Care Services (LCS), a leading US provider of seniors housing and care with retirement communities serving over 28,000 residents in 29 states.
 
The facility, Wellbrooke of Westfield, is located in Hamilton County, Indiana, one of the fastest-growing counties in the United States. This Next GenerationTM facility is a hallmark of Mainstreet's market-leading approach to health care property  design and development.  Next GenerationTM designs offer hotel-like properties that transform seniors housing and care into a hospitality experience by incorporating concierge-based services to specifically cater to the evolving demands of the growing senior population. Of the 100 units at Westfield, 70 are licensed to provide skilled nursing, rehabilitation and therapy services, while the other 30 provide assisted living.
 
"We are very pleased to add this brand-new, high-quality property to the HealthLease portfolio," stated Zeke Turner, Chairman and CEO of the REIT. "This Class A+ property in a fast growing market is anticipated to be immediately accretive to the REIT.  As well, by partnering on another facility with LCS, we continue to increase our diversity among leading seniors housing care operators."
 
Wellbrooke will be acquired under the REIT's pre-existing development agreement with Mainstreet that provides the REIT with a right to acquire any seniors housing and care properties developed by Mainstreet. Subject to the approval of the TSX and the satisfaction of other customary closing conditions, HealthLease will acquire the property for its appraised value of $17,860,000, in a combination of assumed debt and exchangeable REIT units.  The exchangeable units represent one-hundred percent of Mainstreet's net proceeds from the sale with no additional cash consideration being paid to Mainstreet.  HealthLease will also acquire certain cash assets for their net present value of $2,470,000.
 
"This acquisition demonstrates that our agreement with Mainstreet is a cost-effective and efficient way to continually add high-quality properties to our portfolio, without dragging earnings, and to further strengthen our balance sheet," added Adlai Chester, CFO of HealthLease. "As well, Mainstreet accepting units in the REIT for one-hundred percent of the net proceeds shows its commitment to the REIT and management's alignment with unitholders."
 
Wellbrooke of Westfield is the fourth property developed by Mainstreet for the REIT.  In February 2013, Mainstreet announced the completion of three development properties - two in Indiana and one in Illinois - which were sold to the REIT in its initial public offering. Mainstreet has a deep pipeline of development opportunities, including seven properties currently under development that will be offered to the REIT upon completion.

on June 19, 2013