Health Care Reit Enters Senior Living Industry With $425m Acquisition Of 3 Luxury Communities

Yet another real estate investment trust is jumping on the SHOP growth bandwagon.

The health care-focused real estate investment trust (REIT), Chiron Real Estate (NYSE: XRN), announced it has acquired from affiliates of Silverstone Senior Living three luxury senior living communities in the Washington, D.C. area for $425 million. The communities are The Landing Alexandria and The Riviera at Alexandria in Alexandria, Virginia; and the Pinnacle in North Bethesda, Maryland.

On May 1, Chiron entered into purchase agreements to acquire The Landing Alexandria and The Riviera at Alexandra for $249 million, according to a press release. Chiron will operate each community as a senior housing operating property (SHOP) with Greystone as a third-party manager to handle the day-to-day operations.

The closings are expected to occur around June 1, depending on customary closing conditions, the release states.

On May 6, Chiron also entered into a purchase agreement to acquire the Pinnacle North Bethesda for $176 million, with Greystone acting as the third-party manager. The closing is expected to occur in October.

The Landing is 90% occupied, while The Riviera is 20% occupied after opening in March. The Pinnacle is set to open in October and is 30% pre-leased as of April 30. Chiron has enlisted Greystone Communities to continue managing the communities while Silverstone will help oversee operations.

With the acquisition, Chiron is among the senior living industry’s newest entrants. The company has 189 health care, outpatient medical and other care properties in its portfolio and has holdings representing about $1.5 billion in gross assets.

Chiron execs said during the company’s first-quarter earnings call Thursday that the REIT is seeking to grow in senior housing due to the industry’s opportunity for growth ahead and fragmented nature with multiple different players.

“We envision Chiron as a trusted partner to leading operators, driving innovation and setting new standards in the industry by focusing on evidence-based design and care models. We believe we can build something truly special,” CEO Mark Decker Jr. said during the call.

He noted that the leaders of Chiron, which is based in Bethesda, Maryland, view the D.C. market as the company’s home turf. The deal with Silverstone came together starting in January, he explained.

“Dialogue with Silverstone revealed an opportunity to solve a capital structure issue,” Decker said. “Silverstone had developed two exceptional communities in Potomac Yards, but the existing ownership was split between two institutions, jeopardizing the best outcome due to fund life challenges and evolving strategic priorities.”

Decker added that “Chiron was able to provide a permanent capital solution that aligns and consolidates these communities while preserving the operating platform that’s thriving.”

Chiron’s stock is priced at $32.30, down 9.2% from the previous close.

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