With the deal, Nationwide Health acquired 590,000 square feet of health care facilities. The aggregate transaction value is $211 million. The initial NOI (net operating income) yield from the properties, excluding a 190,000 square feet facility in Pasadena, California, which is in lease-up stage, is expected to be 7.6%.

Nationwide Health has continually focused on acquisitions to fuel its growth engine as demand for health care facilities is set to increase with an aging Baby Boomer generation. Furthermore, the health care sector is one of the more recession-proof real estate sectors and has persistently fared better than other sectors during the commercial real estate downturn. This offers a strong upside potential for the company.

Furthermore, Nationwide Health is structured as a triple-net lease health care REIT, which includes base rent (a regular income in the form of rent payments), preset thresholds (much like retail percentage rent clauses), and financing options (in the form of mortgage loans). The base rent and preset threshold agreements help eliminate operational risks, which are transferred to the lessee. The lessee also benefits by obtaining operational control and a larger share of profits without investments.

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(NHP) Nationwide Health Properties Gets Medical Office Buildings

According to the terms of the deal, Health Care REIT would acquire a 49% stake in Forest City’s seven life sciences buildings adjacent to the Massachusetts Institute of Technology. The company would invest $170 million for the project, and the JV would assume $320 million in secured debt on the buildings, which are currently 100% leased.

Headquartered in Toledo, OH, Health Care REIT invests across the full spectrum of senior housing and health care real estate properties. The company provides senior housing operators and health care systems with a single source for facility planning, design and turn-key development, property management, and monetization or expansion of existing real estate.

Health Care REIT is continually investing in assisted and independent living facilities as demand for these facilities is set to increase with an aging Baby Boomer generation. Furthermore, the healthcare sector is one of the more recession-proof real estate sectors and has persistently fared comparatively better than other sectors during the commercial real estate downturn. This offers a strong upside potential for the company.

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(HCN) Health Care REIT Forms Joint Venture with Forest City

Nationwide Health acquired the Pomerado Outpatient Pavilion in Poway, California for approximately $74 million. The company also acquired the Mercy Gilbert Medical Plaza in Gilbert, Arizona through a joint venture in which it owns a 71.2% stake. Nationwide Health contributed $6.3 million in cash for the acquisition. In addition, the company also decided to provide up to $8.8 million as project financing, including $6.8 million that was disbursed initially.

At the same time, Nationwide Health amended the original agreement with Pacific Medical effective Feb 1, 2010. Under the amended terms of the agreement, Nationwide Health would have to either provide or arrange financing for approved developments of future medical office buildings of the joint venture. In return, the company would receive preferred returns for its investments along with a reduction in acquisition pricing.

Nationwide Health is structured as a triple-net lease healthcare REIT, which includes base rent (a regular income in the form of rent payments), pre-set thresholds (much like retail percentage rent clauses), and financing options (in the form of mortgage loans). The base rent and pre-set threshold agreements help eliminate operational risks, which are transferred to the lessee. The lessee also benefits by obtaining operational control and a larger share of profits without investments.

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(NHP) Nationwide Health Properties Acquires Two Properties

The increase in credit facility was made possible by a $50 million loan commitment by an unnamed financial institution, which joined the company’s bankers as an additional lender. The increased credit facility provides Ventas with the financial flexibility to drive future growth through potential acquisitions.

Ventas is one of the leading healthcare REITs in the U.S., with a portfolio of 501 healthcare-related facilities containing approximately 50,000 licensed beds and senior housing units, strategically located in 43 states and two Canadian provinces.

Ventas currently has an operating portfolio of 79 senior housing communities in North America that are managed by Sunrise Senior Living Inc. (SRZ). In about 19 of these, Ventas has 100% ownership, while in the remaining 60 communities it has a share of 75% to 85% with the balance being owned by Sunrise.

Ventas leases some of its owned healthcare related and senior housing facilities to third party operators under “triple net” leases, under which the tenant pays taxes, insurance, and maintenance for the properties, in addition to rent. The company also owns healthcare related and senior housing facilities that are managed by third party operators.

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(VTR) Ventas Incorporated Augments Credit Facility

During the quarter, FFO (fund from operations) was $63.3 million or 56 cents per share, compared to $58.4 million or 56 cents in the year-ago period. Fund from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

Despite challenging market conditions, Nationwide Health decided to acquire various healthcare properties from Pacific Medical Buildings LLC to capitalize on potential growth opportunities. Pacific Medical specializes exclusively in developing and managing medical office buildings, outpatient facilities and parking structures for hospitals, medical groups and universities.

According to the terms of the deal, Nationwide Health would acquire three medical office buildings, the remaining 55% interest in two medical office buildings, and the majority ownership stake in two other medical office buildings. The total acquisition costs are estimated to be $275 million to $300 million, with the properties initially contributing an annual net operating income of $21 million to $23 million.

During the quarter, Nationwide Health issued 5.5 million common shares at $30.12 each, raising net proceeds of $163 million. Subsequent to the end of the quarter, the company also issued 897,500 common shares at $32.30 each, raising net proceeds of $28.7 million. During the quarter, Nationwide Health retired three mortgage notes at a profit of $1.3 million. At quarter end, the company had $300 million of cash and full capacity of its $700 million credit facility.

Nationwide Health is structured as a triple-net lease healthcare REIT, which includes base rent (a regular income in the form of rent payments), pre-set thresholds (retail percentage rent clauses), and financing options (in the form of mortgage loans). The base rent and pre-set threshold agreements help eliminate operational risks, which are transferred to the lessee. The lessee also benefits by obtaining operational control and a larger share of profits without investments.

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(NHP) Nationwide Health Properties’ Revenue Rises

The year-over-year decrease in FFO was due to the loss on extinguishment of debts and impairment charges totaling 25 cents per share. Excluding one-time charges, FFO for the quarter was 77 cents per share compared to 86 cents in the year-ago period.

During the quarter, Health Care completed $156.3 million of gross new investments in large senior housing properties and state-of-the-art medical facilities. The company also strengthened its liquidity by raising $434.6 million of net equity proceeds. Year-till-date, Health Care received $177.4 million in proceeds from asset sale and loan-pay-offs, realizing net profit of $26.9 million.

During the quarter, the company prepaid $58.8 million of secured debt and repurchased $161.4 million of unsecured notes scheduled to mature in 2012. In addition, Health Care received $132.5 million of mortgage loans from Freddie Mac (FRE). At quarter end, Health Care had cash and cash equivalents of $102.4 million.

Health Care declared a cash dividend of 68 cents per share during the quarter, which marks the 154th consecutive quarterly dividend payment. For full year 2009, the company has revised its normalized FFO guidance to $3.10 ? $3.12 per share from its earlier projections of $3.07 ? $3.14 per share.

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(HCN) Health Care REIT Inc’s Funds From Operations Plummets

The year-over-year decrease in FFO was due to the negative impact of non-recurring charges of 39 cents per share, primarily related to the jury verdict in Ventas Inc. (VTR) litigation. Excluding the one-time charges, FFO for the third quarter of 2009 was $149.3 million or 52 cents per share compared to $178.8 million or 72 cents per share in the year-ago period.

During the quarter, HCP purchased a $720 million participation in first mortgage debt of HCR ManorCare at a discount of $590 million. In addition, HCP sold marketable debt securities of $115 million, realizing aggregate gains of $6 million.

The company also sold two medical office buildings for $6 million at a profit of $2.5 million. At the same time, HCP funded $31 million for construction projects in its life science segment.

During the quarter, HCP completed the sale of 17.8 million shares at $24.75 each, raising net proceeds of $423 million. Bulk of the proceeds was used to repay the existing debt under the revolving credit facility and used for general corporate purposes. The company also repaid $100 million of mortgage debt utilizing proceeds from the equity offering and asset sales.

During the quarter, HCP received a negative jury verdict against Ventas related to its interference in the latter’s acquisition of Sunrise Senior Living REIT in April 2007. Ventas was awarded approximately $101.7 million in compensatory damages. Also during the quarter, HCP completed the transition of management agreements on 15 communities operated by Sunrise Senior Living Inc. (SRZ). Currently, Sunrise-managed properties in HCP’s portfolio have decreased to 75 communities down from its original tally of 101.

The company declared a quarterly cash dividend of 46 cents per share. For the full year 2009, the company has reiterated its earlier FFO guidance (before non-recurring items) of $2.10 to $2.16 per share.

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(HCP) HCP Inc’s Funds From Operations Declines Drastically

Ventas currently has an operating portfolio of 79 senior housing communities in North America that are managed by Sunrise Senior Living Inc. (SRZ). In about 19 of these, Ventas has 100% ownership stake, while in the remaining 60 communities Ventas has a partnership share of 75% to 85% with the balance being owned by Sunrise. During the quarter, net operating income from these properties was $33.4 million compared to $35.2 million in the year-ago period. Average occupancy in the same-store portfolio increased sequentially to 88.1% during the quarter from 87.2% in the second quarter.

During the quarter, Ventas completed the development of a 75,000 rentable square medical office building in Parker, Colorado. The property was over 80% leased at completion of the development work. In a marked development during the quarter, Ventas received a positive verdict against HCP, Inc. (HCP), related to the latter’s interference in the acquisition of Sunrise Senior Living REIT in Apr 2007. Ventas was awarded approximately $101.7 million in compensatory damages.

At quarter end, Ventas had $9.7 million outstanding under its revolving credit facility, about $853 million available under its other credit facilities, and $126.6 million of cash and short-term cash investments. The debt to total capitalization was approximately 30% and net debt to pro forma earnings before interest, tax, depreciation, and amortization (EBITDA) was 4.2x.

Subsequent to the end of the quarter, Ventas obtained a mortgage debt of $58.4 million, and increased its revolving credit facility to $965 million. Currently, the company has $14.6 million debt maturing in the remainder of 2009 and $169.9 million of debt maturing in 2010. With relatively low leverage and adequate liquidity, Ventas expects its 2009 normalized FFO to vary within $2.62 to $2.65 per share, which is significantly higher than its previous guidance range of $2.55 to $2.62.

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(VTR) Ventas Incorporated Posts Modest Quarter