Brookdale Senior Living Inc. (NYSE: BKD) has announced significant financial transactions aimed at acquiring 41 currently leased communities, refinancing debt, and securing capital for value-creating acquisitions. The company has entered into agreements to acquire 41 communities from three current triple-net lease portfolios for a combined purchase price of $610 million. These acquisitions are expected to reduce 2025 cash lease payments by $47 million, improve 2025 adjusted EBITDA by $33 million, and improve 2025 adjusted free cash flow by an estimated $15 million.
The company has also successfully addressed 83% of all 2026 debt maturities through a privately negotiated exchange of existing 2026 notes for a newly issued series of 3.50% convertible senior notes due 2029. Additionally, Brookdale has refinanced its 2025 agency debt maturity at a favorable rate, completing a $182 million agency financing transaction and proactively repaying $197 million of debt which was scheduled to mature in September 2025.
The acquisition transactions include the purchase of 11 senior living communities from a joint venture between Welltower Inc. and its joint venture partners for $300 million, five senior living communities from Welltower Inc. for $175 million, and 25 senior living communities from Diversified Healthcare Trust for $135 million.
The company anticipates the net cash proceeds from the issuance of the 2029 new notes to be approximately $135 million, which will be used to fund the acquisitions and for general corporate purposes.
Brookdale's President and CEO, Lucinda ("Cindy") Baier, expressed pride in the planned acquisitions, highlighting the immediate and long-term benefits of the real estate transactions, including improved capital structure and increased owned real estate portfolio. Vince Mellet, a partner at Deerfield, emphasized the essential role of high-quality operators like Brookdale in supporting the future demand for senior living communities.
The company's proactive management of its portfolio and capital structure underscores the strategic efforts to enhance shareholder value and capitalize on the multi-year senior living growth opportunity. The transactions are expected to close by year-end, subject to customary closing conditions for real estate transactions. Following these announcements, the company's shares moved 2.0%, and are now trading at a price of $6.72. For more information, read the company's full 8-K submission here.
