Brookdale will buy Horizon, form venture with HCP

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Associated Press

Posted on June 1, 2011 at 3:01 PM

NEW YORK (AP) — Brookdale Senior Living Inc. said Wednesday it agreed to acquire senior living community operator Horizon Bay Realty, and will form a joint venture with HCP Inc. to manage some of those communities.

The companies did not disclose financial terms of the Horizon Bay deal or the joint venture.

Brookdale, based in Nashville, Tenn., is gaining 90 senior housing communities in the deal. It said Horizon, of Tampa, Fla., has 16,000 units in 19 states. Brookdale already manages 57 of those communities. The other 33 are leased from HCP, a real estate investment trust based in Long Beach, Calif. Brookdale and HCP will form a joint venture to manage 21 of the remaining communities, and Brookdale will lease the other 12 from HCP.

HCP said Brookdale will have a 10 percent interest in real estate and operations of 21 communities in Arizona, California, Florida, Illinois, Rhode Island, and Texas. Those communities — and four others in Rhode Island, which Brookdale will lease — were owned by HCP through a joint venture. HCP bought out its partner's 65 percent interest in January.

HCP said it expects the joint venture transaction to close on Aug. 1. When that deal is complete, HCP will own 61 communities operated by Brookdale.

Brookdale said it expects to invest about $47 million in Horizon in the first year after the deal closes. It said the acquisition will add 9 to 11 cents to its cash from facility operations in 2012, and 15 to 17 cents per share in 2013. It expects a slight increase this year.

Shares of Brookdale fell 50 cents, or 1.9 percent, to $25.31 in midday trading, and HCP stock declined 78 cents, or 2.1 percent, to $37.16.

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