CARMEL, Ind., Aug. 13, 2014 /PRNewswire/ -- The nation's largest post-acute health care developer and one of the world's largest health care real estate companies have agreed to join forces to lead the evolution of post-acute care, an emerging solution in the changing health care landscape.
Health Care REIT, Inc. (NYSE: HCN) has agreed to acquire HealthLease Properties REIT (TSX: HLP.UN), in a transaction valued at $950 million. HCN has also agreed to acquire 17 of Mainstreet's Next Generation® properties currently under construction and enter into a development partnership with Mainstreet with respect to 45 future properties, for a combined value of approximately $1.4 billion. The geographic footprint of this transaction reaches as far north as Canada, as far west as Arizona and Utah and as far east as New Jersey and Pennsylvania. The transaction between Mainstreet and HCN creates the leading short-stay rehabilitation and therapy development partnership in the United States.
"At Mainstreet, we're grateful and humbled to team up with such a great partner as HCN to lead the nation in the development of post-acute health care properties," said Zeke Turner, founder and CEO of Mainstreet and chairman and CEO of HLP. "Americans deserve better choices for their health care and this partnership is built to offer just that."
"Throughout HCN's history, our strategy has been to fuel its growth by forming mutually beneficial partnerships with leading seniors housing and post-acute operators," said Tom DeRosa, CEO of HCN. "We're excited to expand our relationship-based platform with an innovative developer, who shares our mission to improve health care delivery. Mainstreet's award-winning NextGen prototype gets patients out of acute-care hospitals and into a lower-cost, more consumer-friendly environment."
Seniors housing has typically been defined by long-term care. But a need for post-acute care after hospital interventions and surgeries like cardiac events, strokes and hip and knee replacements has emerged from the rapidly growing aging population. Mainstreet sees its NextGen properties – where guests stay up to 30 days for rehab and therapy in hotel-like settings – as an innovative solution.
Mainstreet formed HLP in 2012 as a platform for accessing capital to build its portfolio. The REIT exceeded expectations, growing from Mainstreet's initial portfolio of approximately $100 million to $950 million today.
"Seeing that our projects are not only needed but are also successful and highly prized is incredibly validating," Turner said. "We're in the fortunate position to transform the way health care is delivered in communities nationwide and we're just getting started."
Partnering with HCN will allow Mainstreet to return to its core business of real estate development and grow the company. Mainstreet will redeploy capital, expand operator relationships and continue its record of high-paying job creation. Mainstreet anticipates thousands of jobs at its projects nationwide and plans to add 20 new jobs in the coming year alone at its Carmel, Indiana headquarters.
Mainstreet has consistently been recognized for its growth both nationally and in Indiana, making the Inc. 500/5000 list of the fastest growing companies in the nation from 2010-2012 and being named Indianapolis Business Journal's fastest-growing company in the Indianapolis area in 2014.
The closing of HCN's purchase of HLP remains subject to the approval of the REIT's unitholders as well as other customary closing conditions. That transaction, as well as the closing of HCN's partnership with Mainstreet, is anticipated to occur in the fourth quarter of 2014.
Indiana-based Mainstreet is the nation's most innovative developer of short-stay rehabilitation and long-term care properties, known for acquiring and developing desirable, concierge-based health care properties. The company's industry-leading Next Generation designs meet the demands of the baby boomer, creating communities with multiple social destinations, restaurant-style dining, spacious private rooms and baths, and therapy/wellness. Mainstreet was named to the Inc. 500/5000 list of fastest-growing companies in 2010, 2011 and 2012. For additional information, visit www.mainstreetinvestment.com.