Highlight on Indiana: Senior health care firm sold for $1.2 billion

Trilogy Health Services LLC, a Louisville-based company operating more than 70 senior-living facilities in Indiana, was sold in an acquisition totaling $1.1 billion to Griffin-American Healthcare REIT III Inc., a closely held real estate investment trust based in Irvine, California. Griffin-American will buy Trilogy’s parent Trilogy Investors LLC in a joint venture with NorthStar Healthcare Income Inc.. The acquisition will result in Griffin-American and Northstar gaining senior assisted-living campuses across the Midwest. Trilogy, founded in 1997, operates 96 senior health and hospitality facilities comprised of more than 10,000 beds in Indiana, Ohio, Michigan and Kentucky, which offer residents assisted living, memory care and nursing services, and has at least a 14 properties in central Indiana, including two in Indianapolis. Most of the facilities were either built or substantially renovated in the past 10 years.

This was the latest large deal in the senior housing asset class, which industry experts expect to increase as the growing need for senior-living facilities continues as Baby Boomers and Gen Xers age. In early 2015 Trilogy Health Services, itself, partnered with Mainstreet, one of the nation’s largest developer of transitional care properties, as co-owner and operator of six senior-living centers in Indiana.

“This is a transformational event for Griffin-American Healthcare REIT III, which will nearly double in size upon completion of the Trilogy acquisition to approximately $2 billion in real estate and real estate-related investments,”  said Jeff Hanson, chairman, CEO and one of the largest stockholders in Griffin-American.

The transaction is subject to third party approvals, customary closing conditions and the satisfaction of other requirements as detailed in the agreement. After the transaction, Griffin-American will own 70 percent of the enlarged venture and will act as its manager. NorthStar will hold the remainder. 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 sale is expected to close by the end of this year.