Brookdale Senior Living Inc., has agreed to acquire Horizon Bay Realty, LLC, which Brookdale says is the ninth largest operator of senior living communities in the United States. The transaction will add 90 communities with more than 16,000 units in 19 states to Brookdale’s portfolio.
In connection with the acquisition, Brookdale is restructuring Horizon Bay's relationship with HCP Inc., forming a joint venture with HCP to own and operate 21 communities and lease an additional 12. Horizon Bay will provide management services to the remaining 57 communities.
“In total, we expect to invest approximately $47 million in the first year of operation, including acquisition consideration, capital contributions to the HCP joint venture, integration costs, transaction expenses and capital expenditures related to the rollout of our ancillary services programs,” said Mark Ohlendorf, co-president and CFO of Brookdale, in a statement. “Brookdale expects return on invested capital to average approximately 35% to 40% per year over the first three years.”
Upon consummation of the transactions, which is expected on August 1, Brookdale will operate 648 communities in 36 states and serve more than 67,000 residents.