NorthStar Healthcare Joint Venture to Acquire Trilogy Health Services in $1.125 Billion Transaction New
New York, NY (September 15, 2015) –NorthStar Healthcare Income, Inc. (NorthStar Healthcare) today announced that it has entered into a definitive agreement to acquire Trilogy Investors LLC (Trilogy), the parent company of Trilogy Health Services LLC, for approximately $1.125 billion pursuant to a joint venture with Griffin-American Healthcare REIT III, Inc. (Griffin-American). NorthStar Healthcare will own approximately 30% of the joint venture, while Griffin-American will own approximately 70% of the joint venture. In addition, as part of the transaction, Randy Bufford, Trilogy’s founder and chief executive officer, and other members of Trilogy’s management will maintain an investment of approximately $24 million in Trilogy.
Founded in 1997, Trilogy is a leading owner-operator of purpose-built integrated senior healthcare campuses throughout the states of Indiana, Ohio, Michigan and Kentucky. During the course of its 18 year history, Trilogy has experienced consistent growth primarily through the development of new campuses and opportunistic expansions of existing ones. Trilogy now operates a total of 96 properties comprised of more than 10,000 beds, most of which were either built or substantially renovated in the past 10 years. Trilogy’s integrated senior health campuses offer a range of care, including assisted living, memory care, independent living and skilled nursing services.
“The Trilogy investment is a continued reflection of our sponsor’s ability to source unique institutional opportunities for our company and partnering with Griffin-American and its sponsor American Healthcare Investors demonstrates our powerful combined presence in the healthcare market,” said Ron J. Jeanneault, chief executive officer and president of NorthStar Healthcare. “Trilogy, led by Randy and an experienced and highly regarded management team, has a strong track record of delivering results. Trilogy’s properties have a low average age, strong occupancy rates and a high quality mix which, coupled with their robust development pipeline, creates an exciting addition to our portfolio that will continue to grow over time. This transaction is another positive step in rounding out the NorthStar Healthcare portfolio with high quality senior housing investments.”
NorthStar Healthcare entered into a joint venture with Griffin-American for the purpose of consummating this transaction. The joint venture agreement provides that Griffin-American will be the manager of the joint venture and NorthStar Healthcare will have consent rights over certain significant decisions. The joint venture agreement also contains rights and obligations relating to funding the joint venture and distributions, as well as customary forced sale and other liquidity rights.
The transaction is subject to customary closing conditions and the satisfaction of other requirements as detailed in the agreement. The investment is intended to be structured in accordance with the REIT Investment Diversification and Empowerment Act of 2007 (RIDEA).
NorthStar Healthcare's portfolio, as adjusted for commitments to acquire real estate investments as of September 14, 2015, consists of 39 investments with an aggregate total cost of $2.8 billion, including 35 equity investments with an aggregate total cost of $2.6 billion and four debt investments with an aggregate principal amount of $203 million as of September 14, 2015.