VIZZDA—January 16th, 2014 — Vista De La Montana,
an 113-unit independent senior living facility near Reems Road and Grand Avenue
in Surprise, was part of a 51-property portfolio of senior housing assets
conveyed between affiliates of Fortress Investment Group for $1.04b. The buyer
of Vista De La Montana is a special purpose entity created by Newcastle
Investment Corp, which paid $14,569,760 for the property or nearly $130k per unit. The seller and original developer of the project is Holiday
Retirement, who has been retained to manage the properties under two triple-net
master leases. To complete the sale, Newcastle issued $320m in new equity
through the issuance of 57,950,952 shares of common stock and financed the
remaining $720m with Goldman Sachs Commercial Real Estate LP.
The master leases have a 17-year firm term with initial
annual rent equal to 6.5% of the purchase price followed by three 4.5%
escalations and escalations tied to the Consumer Price Index, not to exceed
3.75%, for the remainder of the term. Documents filed with the
SEC indicate that financing for the deal is structured in four notes: a
$316.85m term loan secured by 25 properties and maturing in 2021, a $362.499m
term loan facility secured by 26 properties maturing 2024 and two mezzanine
notes of $40m and $1k secured by
Newcastle’s equity in the deal maturing 2021 and 2024, respectively. Newcastle
is managed and advised by an affiliate of Fortress Investment Group, while
Holiday is a wholly-owned subsidiary of Fortress pursuant to a February 2007
buyout for $6.89b.
By:
Paul Dionne
Director of Analytics
Vizzda.com
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