In REIT-Eat-REIT Deal, NorthStar to Acquire Griffin-American Healthcare REIT II

By Scott Baltic, Contributing Editor

NorthStar Realty Finance Corp. will acquire all of the outstanding shares of Griffin-American Healthcare REIT II Inc. in a stock-and-cash transaction valued at $4 billion, both companies announced yesterday.

The $4 billion figure comes out to $11.50 per Griffin-American share, which breaks down as $7.75 per share in cash and $3.75 per share in NorthStar Realty common stock. The latter value assumes that NorthStar Realty’s stock price at closing is between $16 and $20.17 per share.

The deal is expected to close in the fourth quarter, subject to the approval of each party’s shareholders and customary closing conditions.

Griffin-American Healthcare REIT II holds 286 properties totaling 11.1 million square feet, with an aggregated purchase price of $2.9 billion. The properties are in 31 states plus the United Kingdom, but 46 percent are in the U.K., Indiana, Texas, Georgia and Pennsylvania, according to information provided to Commercial Property Executive by a Griffin-American spokesperson.

Medical office buildings make up 46.6 percent of the portfolio, which also includes seniors housing, skilled nursing facilities and hospitals.

“When we launched Griffin-American Healthcare REIT II nearly five years ago, we set out to build a premium portfolio of diversified healthcare real estate in order to provide investors with an opportunity to realize a compelling return on their investment,” Griffin-American chairman & CEO Jeff Hanson said in a release. “With this transaction, we have executed on our strategy.”

BofA Merrill Lynch, Robert A. Stanger & Co. and KeyBanc Capital Markets Inc. acted as financial advisors to Griffin-American. Latham & Watkins L.L.P., McGuireWoods L.L.P. and Morris, Manning & Martin L.L.P. acted as legal advisors to Griffin-American.

UBS Investment Bank and CS Capital Advisors are financial advisors to NorthStar Realty, and Paul, Weiss, Rifkind, Wharton & Garrison LLP is its legal counsel.

Griffin-American Healthcare REIT II is co-sponsored by American Healthcare Investors and Griffin Capital Corp.

NorthStar Realty Finance Corp. is a CRE investment company organized as a REIT and managed by an affiliate of NorthStar Asset Management Group Inc.