Brookdale Senior Living to acquire 41 currently leased communities
Brookdale Senior Living (NYSE: BKD) announced plans to acquire 41 currently leased communities for $610 million, addressing 83% of its 2026 debt maturities and securing capital for accretive acquisitions. The company will acquire 2,789 units from three triple-net lease portfolios, increasing its owned real estate to 66% of consolidated units. Brookdale expects these transactions to reduce 2025 cash lease payments by $47 million, improve 2025 Adjusted EBITDA by $33 million, and Adjusted Free Cash Flow by $15 million.
The company also announced a convertible senior notes transaction, exchanging $207 million of 2026 Notes for new 3.50% Convertible Senior Notes due 2029, and selling an additional $150 million of 2029 Notes to partially fund the acquisitions. Brookdale completed a $182 million agency financing transaction, repaying $197 million of debt due in September 2025, resulting in no remaining debt maturities without extension options through June 2026.
Brookdale Senior Living (NYSE: BKD) ha annunciato l'intenzione di acquisire 41 comunità attualmente in affitto per 610 milioni di dollari, affrontando l'83% delle scadenze del debito del 2026 e assicurando capitali per acquisizioni positive. L'azienda acquisirà 2.789 unità da tre portafogli di affitto triplo netto, aumentando la sua proprietà immobiliare al 66% delle unità consolidate. Brookdale si aspetta che queste transazioni riducano i pagamenti in contante per affitti del 2025 di 47 milioni di dollari, migliorando l'EBITDA rettificato del 2025 di 33 milioni di dollari e il flusso di cassa libero rettificato di 15 milioni di dollari.
L'azienda ha anche annunciato una transazione di obbligazioni senior convertibili, scambiando 207 milioni di dollari di Note del 2026 per nuove Obbligazioni Senior Convertibili al 3,50% in scadenza nel 2029, e vendendo ulteriori 150 milioni di dollari di Note del 2029 per finanziare parzialmente le acquisizioni. Brookdale ha completato una transazione di finanziamento tramite agenzia da 182 milioni di dollari, rimborsando 197 milioni di dollari di debito in scadenza a settembre 2025, risultando in nessuna scadenza di debito rimanente senza opzioni di estensione fino a giugno 2026.
Brookdale Senior Living (NYSE: BKD) anunció planes para adquirir 41 comunidades actualmente arrendadas por 610 millones de dólares, abordando el 83% de sus vencimientos de deuda de 2026 y asegurando capital para adquisiciones rentables. La compañía adquirirá 2,789 unidades de tres carteras de arrendamiento triple neto, aumentando su propiedad inmobiliaria al 66% de las unidades consolidadas. Brookdale espera que estas transacciones reduzcan los pagos de alquiler en efectivo de 2025 en 47 millones de dólares, mejoren el EBITDA ajustado de 2025 en 33 millones de dólares y el flujo de efectivo libre ajustado en 15 millones de dólares.
La empresa también anunció una transacción de notas senior convertibles, intercambiando 207 millones de dólares de Notas de 2026 por nuevas Notas Senior Convertibles al 3.50% con vencimiento en 2029, y vendiendo 150 millones adicionales de Notas de 2029 para financiar parcialmente las adquisiciones. Brookdale completó una transacción de financiamiento de agencia de 182 millones de dólares, reembolsando 197 millones de dólares de deuda que vencía en septiembre de 2025, resultando en ninguna deuda remanente sin opciones de extensión hasta junio de 2026.
브룩데일 시니어 리빙 (NYSE: BKD)은 현재 임대 중인 41개 커뮤니티를 6억 1천만 달러에 인수할 계획을 발표하며, 2026년 부채 만기의 83%를 해결하고 추가 인수를 위한 자본을 확보하고자 합니다. 이 회사는 세 개의 트리플 넷 리스 포트폴리오에서 2,789개 유닛을 인수하여 보유한 부동산 비율을 통합 유닛의 66%로 증가시킬 것입니다. 브룩데일은 이 거래가 2025년 현금 임대료 지급액을 4천7백만 달러 감소시킬 것으로 기대하며, 2025년 조정된 EBITDA를 3천3백만 달러 개선하고 조정된 자유 현금 흐름을 1천5백만 달러 증가시킬 것입니다.
회사는 또한 전환 사채 거래를 발표하며, 2026년 노트를 2억7백만 달러 교환하고 2029년 만기 3.50% 전환 사채를 발행하며, 인수를 부분적으로 자금 조달하기 위해 추가로 1억5천만 달러의 2029년 노트를 판매할 것입니다. 브룩데일은 1억8천2백만 달러의 기관 자금 조달 거래를 완료하고 2025년 9월에 만기가 도래하는 1억9천7백만 달러의 부채를 상환하여, 2026년 6월까지 연장 옵션 없이 남은 부채 만기가 없도록 하였습니다.
Brookdale Senior Living (NYSE: BKD) a annoncé son intention d'acquérir 41 communautés actuellement louées pour 610 millions de dollars, traitant ainsi 83% de ses échéances de dette de 2026 et sécurisant des capitaux pour des acquisitions avantageuses. L'entreprise va acquérir 2 789 unités à partir de trois portefeuilles de baux triple net, augmentant la part de son patrimoine immobilier à 66% des unités consolidées. Brookdale s'attend à ce que ces transactions réduisent les paiements de loyer en espèces de 2025 de 47 millions de dollars, améliorent l'EBITDA ajusté de 2025 de 33 millions de dollars et le flux de trésorerie libre ajusté de 15 millions de dollars.
L'entreprise a également annoncé une transaction d'obligations senior convertibles, échangeant 207 millions de dollars d'obligations de 2026 contre de nouvelles Obligations Senior Convertibles à 3,50% arrivant à échéance en 2029, et vendant 150 millions de dollars supplémentaires d'obligations de 2029 pour financer partiellement les acquisitions. Brookdale a réalisé une transaction de financement par agence de 182 millions de dollars, remboursant 197 millions de dollars de dettes arrivant à échéance en septembre 2025, résultant en aucune échéance de dettes restante sans options de prolongation jusqu'en juin 2026.
Brookdale Senior Living (NYSE: BKD) hat Pläne angekündigt, 41 derzeit vermietete Gemeinschaften für 610 Millionen Dollar zu erwerben, um 83% der Fälligkeiten seiner Schulden im Jahr 2026 zu adressieren und Kapital für akquisitorische Investitionen zu sichern. Das Unternehmen wird 2.789 Einheiten aus drei Triple-Net-Leasing-Portfolios erwerben, wodurch der Anteil an eigenen Immobilien auf 66% der konsolidierten Einheiten ansteigt. Brookdale erwartet, dass diese Transaktionen die Barleasing-Zahlungen für 2025 um 47 Millionen Dollar reduzieren, das bereinigte EBITDA im Jahr 2025 um 33 Millionen Dollar verbessern und den bereinigten freien Cashflow um 15 Millionen Dollar erhöhen werden.
Das Unternehmen kündigte auch eine Transaktion mit umwandbaren vorrangigen Anleihen an, bei der 207 Millionen Dollar der 2026er-Anleihen gegen neue 3,50% umwandelbare vorrangige Anleihen mit Fälligkeit 2029 eingetauscht werden und zusätzlich 150 Millionen Dollar an 2029er-Anleihen verkauft werden, um die Akquisitionen teilweise zu finanzieren. Brookdale schloss eine Agenturfinanzierung von 182 Millionen Dollar ab und zahlte 197 Millionen Dollar an Schulden zurück, die im September 2025 fällig werden. Dies führt dazu, dass bis Juni 2026 keine verbleibenden Fälligkeiten ohne Erweiterungsoptionen bestehen.
- Acquisition of 41 communities for $610 million, increasing owned real estate to 66% of consolidated units
- Expected reduction in 2025 cash lease payments by $47 million
- Projected improvement in 2025 Adjusted EBITDA by $33 million
- Anticipated increase in 2025 Adjusted Free Cash Flow by $15 million
- Extension of $207 million debt maturity from 2026 to 2029 through convertible notes exchange
- Securing $150 million in new capital through convertible notes sale
- Refinancing of $197 million debt due in 2025, eliminating near-term debt maturities
- Increase in total debt through new convertible notes issuance
- Potential dilution for existing shareholders due to convertible notes
Insights
This announcement represents a significant strategic move for Brookdale Senior Living. The company is addressing 83% of its 2026 debt maturities while simultaneously acquiring 41 senior living communities for
Key points to consider:
- The acquisition will increase Brookdale's owned real estate portfolio to
66% of consolidated units, reducing lease expenses and improving capital structure. - The company expects to reduce 2025 cash lease payments by
$47 million and improve 2025 Adjusted EBITDA by$33 million . - The financing includes a new
$369 million convertible note issuance, extending debt maturities to 2029 at a3.50% interest rate. - Brookdale has also refinanced its 2025 agency debt, leaving no significant maturities until 2026.
These moves position Brookdale to capitalize on the projected growth in the senior living sector over the next decade. The transactions demonstrate management's proactive approach to portfolio optimization and financial restructuring, which could lead to improved long-term shareholder value.
Brookdale's acquisition of 41 communities from its current lease portfolios is a strategic move that transforms its real estate ownership profile. The
Key real estate implications:
- Increased ownership provides greater operational flexibility and potential for value creation through property improvements and management efficiencies.
- The assumption of existing below-market rate debt on some properties enhances the deal's economics.
- The diverse geographic spread of the acquisitions, including high-value markets like Seattle and the Bay Area, adds to portfolio quality.
- The transaction capitalizes on purchase options and favorable pricing, with some assets acquired at a discount to estimated replacement cost.
This move aligns with the industry trend of operators seeking to own more of their real estate. It positions Brookdale to capture a larger share of property value appreciation and operational improvements, potentially leading to stronger financial performance and increased shareholder returns in the long term.
Announces private convertible senior notes transaction through exchange and new subscription agreements
Transactions accretive to 2025 Adjusted EBITDA and Adjusted Free Cash Flow
TRANSACTIONS HIGHLIGHTS
Acquisition Transactions
- Through a series of privately negotiated, off-market transactions, Brookdale entered into agreements to acquire 41 communities (2,789 units) from three current triple-net lease portfolios for a combined purchase price of
$610 million - With aggregate weighted average occupancy above Company average and positive trailing-twelve month lease coverage, ownership of acquired communities enables Brookdale to fully capitalize on the unprecedented multi-year senior living growth opportunity, and provides immediate value-creation through a more favorable capital structure.
- Acquisitions are expected to be funded through an assumption of existing below-market rate debt, net proceeds from the sale of a newly issued series of convertible senior notes, proceeds from non-recourse mortgage financing on certain of the assets, and cash on hand.
- The Company expects these transactions to reduce 2025 cash lease payments by
$47 million $33 million $15 million - By acquiring these portfolios, Brookdale will realize predictable high-yield returns from improved capitalization terms.
- Subsequent to these transactions, Brookdale will own
66% of its consolidated units, marking another significant step in the Company's ongoing efforts to increase its owned real estate portfolio.
Financing Transactions
Convertible Senior Notes
- The Company has entered into privately negotiated agreements with certain of the holders of its Convertible Senior Notes due 2026 (the "2026 Notes") to exchange an aggregate of approximately
$207 million 3.50% Convertible Senior Notes due 2029 (the "2029 New Notes").- These agreements opportunistically extend a substantial portion of the 2026 debt maturities to 2029 with an approximate
$9.00 $8.10
- These agreements opportunistically extend a substantial portion of the 2026 debt maturities to 2029 with an approximate
- In a private transaction with Deerfield Management Company and Flat Footed, LLC, the Company will also sell
$150 million - This efficiently priced capital will support meaningful value-creating opportunities through these acquisitions.
2025 Mortgage Debt Maturity
- The Company completed a
$182 million $197 million - The closing of this transaction will result in no remaining debt maturities without extension options through June 2026.
The forward-twelve month annualized leverage impact from these transactions is not expected to be material.
"As a result of continued proactive management of our portfolio and capital structure, I am incredibly proud to announce our planned acquisition of 41 leased communities. The immediate and long-term benefits of these real estate transactions are wide-ranging, including future portfolio flexibility that comes through asset ownership, the opportunity to fully realize the long-term benefits of the powerful senior housing outlook, and following closing, the expected immediate improvement in Adjusted EBITDA and Adjusted Free Cash Flow from a lower-cost capital structure," said Lucinda ("Cindy") Baier, Brookdale's President and CEO. "We appreciate Welltower, their JV partners, and DHC for their partnership on these transactions as they highlight the importance of maintaining collaborative relationships with our REIT partners as we continually strive to further enhance shareholder value."
"We are also grateful to Deerfield and Flat Footed, who have been strong supporters of Brookdale for years, for their continued confidence in Brookdale and our long-term growth outlook. With the demonstrated commitment from these and other shareholders, we proactively addressed a significant portion of our 2026 debt maturities and secured funding for value-creating acquisitions at an attractive rate," said Baier.
"Over the next decade, there will be an extraordinary rise in the number of people who are aged 80 or older while the supply of senior living communities continues to remain relatively static," commented Vince Mellet, Partner at Deerfield. "The need for high-quality operators such as Brookdale Senior Living is apparent and its growth to support future demand is essential. We are pleased to be able to play a role in strengthening the company's position."
1 | Adjusted EBITDA and Adjusted Free Cash Flow are financial measures that are not calculated in accordance with GAAP. See "Non-GAAP Financial Measures" for the Company's definition of such measures and other important information regarding the reconciliations of the Company's non-GAAP financial measures. |
TRANSACTIONS DETAILS
The Company has entered into definitive agreements to acquire three portfolios of senior living communities that are currently leased by the Company. Through ownership of these communities, the Company will gain portfolio management flexibility that is not present in a leased structure, providing additional opportunities to further enhance shareholder value. These transactions are expected to close by year-end, subject to the satisfaction of customary closing conditions for real estate transactions.
International JV / Welltower Portfolio Acquisition
The Company has entered into a definitive agreement to acquire 11 senior living communities (1,228 units) from a joint venture between Welltower Inc. and its joint venture partners for a purchase price of
Welltower Portfolio Acquisition
The Company has entered into a definitive agreement to acquire five senior living communities (686 units) from Welltower Inc. for a purchase price of
Diversified Healthcare Trust Portfolio Acquisition
The Company has entered into a definitive agreement to acquire 25 senior living communities (875 units) from Diversified Healthcare Trust for a purchase price of
Convertible Senior Notes
The privately negotiated agreements with certain holders of the 2026 Notes provide that the Company will issue approximately
The 2029 New Notes will be senior, unsecured obligations of the Company, and interest will be payable semi-annually in arrears at a rate of
The Company anticipates the net cash proceeds from the issuance of the 2029 New Notes will be approximately
Additional information regarding this announcement may be found in a Current Report on Form 8-K that the Company intends to file today with the
This announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities (including the shares of Company common stock, if any, to which the 2029 New Notes are convertible) and shall not constitute an offer, solicitation, or sale in any jurisdiction in which such offer, solicitation, or sale is unlawful.
The 2029 New Notes and any shares of common stock issuable upon conversion of the 2029 New Notes have not been registered under the Securities Act of 1933, as amended, or any state securities law and may not be offered or sold in
2025 Mortgage Debt Maturity
In September 2024, the Company obtained
NON-GAAP FINANCIAL MEASURES
This press release contains the financial measures Adjusted EBITDA and Adjusted Free Cash Flow, which are not calculated in accordance with
Reconciliation of the forward-looking non-GAAP financial measures included in this press release to the most comparable GAAP financial measure is not available without unreasonable effort due to the inherent difficulty in forecasting the timing or amounts of items required to reconcile Adjusted EBITDA from the Company's net income (loss) and Adjusted Free Cash Flow to net cash provided (used in) operating activities. Variability in the timing or amounts of items required to reconcile the measure may have a significant impact on the Company's future GAAP results.
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP performance measure that the Company defines as net income (loss) excluding: benefit/provision for income taxes, non-operating income/expense items, and depreciation and amortization; and further adjusted to exclude income/expense associated with non-cash, non-operational, transactional, cost reduction, or organizational restructuring items that management does not consider as part of the Company's underlying core operating performance and that management believes impact the comparability of performance between periods. In recent periods, such other items include non-cash impairment charges, operating lease expense adjustment, non-cash stock-based compensation expense, and transaction and organizational restructuring costs. Transaction costs include those directly related to acquisition, disposition, financing, and leasing activity, and are primarily comprised of legal, finance, consulting, professional fees, and other third-party costs. Organizational restructuring costs include those related to the Company's efforts to reduce general and administrative expense and its senior leadership changes, including severance.
Adjusted EBITDA has material limitations as a performance measure, including: (i) excluded interest and income tax are necessary to operate the Company's business under its current financing and capital structure; (ii) excluded depreciation, amortization, and impairment charges may represent the wear and tear and/or reduction in value of the Company's communities, goodwill, and other assets and may be indicative of future needs for capital expenditures; and (iii) the Company may incur income/expense similar to those for which adjustments are made, such as gain/loss on sale of assets, facility operating lease termination, or debt modification and extinguishment, non-cash stock-based compensation expense, and transaction and other costs, and such income/expense may significantly affect the Company's operating results.
Adjusted Free Cash Flow
Adjusted Free Cash Flow is a non-GAAP liquidity measure that the Company defines as net cash provided by (used in) operating activities before: distributions from unconsolidated ventures from cumulative share of net earnings, changes in prepaid insurance premiums financed with notes payable, changes in operating lease assets and liabilities for lease termination, cash paid/received for gain/loss on facility operating lease termination, and lessor capital expenditure reimbursements under operating leases; plus: property and casualty insurance proceeds and proceeds from refundable entrance fees, net of refunds; less: non-development capital expenditures and payment of financing lease obligations. Non-development capital expenditures are comprised of corporate and community-level capital expenditures, including those related to maintenance, renovations, upgrades, and other major building infrastructure projects for the Company's communities and is presented net of lessor reimbursements. Non-development capital expenditures do not include capital expenditures for: community expansions, major community redevelopment and repositioning projects, and the development of new communities.
Adjusted Free Cash Flow has material limitations as a liquidity measure, including: (i) it does not represent cash available for dividends, share repurchases, or discretionary expenditures since certain non-discretionary expenditures, including mandatory debt principal payments, are not reflected in this measure; (ii) the cash portion of non-recurring charges related to gain/loss on facility lease termination generally represent charges/gains that may significantly affect the Company's liquidity; and (iii) the impact of timing of cash expenditures, including the timing of non-development capital expenditures, limits the usefulness of the measure for short-term comparisons.
ABOUT BROOKDALE SENIOR LIVING
Brookdale Senior Living Inc. is the nation's premier operator of senior living communities. The Company is committed to its mission of enriching the lives of the people it serves with compassion, respect, excellence, and integrity. The Company, through its affiliates, operates independent living, assisted living, memory care, and continuing care retirement communities. Through its comprehensive network, Brookdale helps to provide seniors with care, connection, and services in an environment that feels like home. The Company's expertise in healthcare, hospitality, and real estate provides residents with opportunities to improve wellness, pursue passions, make new friends, and stay connected with loved ones. Brookdale, through its affiliates, operates and manages 649 communities in 41 states as of June 30, 2024, with the ability to serve approximately 59,000 residents. Brookdale's stock trades on the New York Stock Exchange under the ticker symbol BKD. For more information, visit brookdale.com or connect with Brookdale on Facebook or YouTube.
SAFE HARBOR
Certain statements in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to various risks and uncertainties and include all statements that are not historical statements of fact and those regarding the Company's intent, belief, or expectations. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "will," "should," "could," "would," "potential," "intend," "expect," "endeavor," "seek," "anticipate," "estimate," "believe," "project," "predict," "continue," "plan," "target," or other similar words or expressions, and include statements regarding the Company's expected financial and operational results. These forward-looking statements are based on certain assumptions and expectations, and the Company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Although the Company believes that expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its assumptions or expectations will be attained and actual results and performance could differ materially from those projected. Factors which could have a material adverse effect on the Company's operations and future prospects or which could cause events or circumstances to differ from the forward-looking statements include, but are not limited to, the Company's ability to complete pending or expected transactions on agreed upon terms or at all, including in respect of the satisfaction of closing conditions, such as the ability to obtain financing or regulatory approvals, and uncertainties as to the timing of closing; disruptions in the financial markets or decreases in the appraised values or performance of the Company's communities that affect the Company's ability to obtain financing or extend or refinance debt as it matures and the Company's financing costs; the Company's ability to obtain additional capital on terms acceptable to it; as well as other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission, including those set forth in the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements in such SEC filings. Readers are cautioned not to place undue reliance on any of these forward-looking statements, which reflect management's views as of the date of this press release. The Company cannot guarantee future results, levels of activity, performance or achievements, and, except as required by law, it expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained in this press release to reflect any change in the Company's expectations with regard thereto or change in events, conditions, or circumstances on which any statement is based.
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SOURCE Brookdale Senior Living Inc.
FAQ
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