Fishers, IN-based Invesque on Thursday announced plans to shed its entire Commonwealth Senior Living-managed portfolio as well as its stake in the Commonwealth Senior Living management company.
The sale is expected to be completed in the first quarter of 2025. Invesque said it will retain a “core portfolio of strong cash flowing seniors housing assets.”
“The CSL portfolio has been an important part of Invesque’s story since it was acquired in August 2019, and the decision to sell this portfolio and our ownership stake in the management company was not an easy one given the alignment with our company strategy to be seniors housing real estate focused,” Invesque CEO Adlai Chester stated Thursday.
Invesque announced its plan to acquire Charlottesville, VA-based Commonwealth in May 2019. It subsequently acquired 17 Commonwealth communities and the management company for approximately $285.4 million that year, saying it was “a pivotal moment” for the company.
“This transaction expands our capabilities by transforming Invesque into a vertically integrated owner of seniors housing with a team that is committed to providing resident-centered care,” Scott White, then-CEO of Invesque, said at the time.
Invesque later closed on three additional Commonwealth communities.
Thursday, Chester said: “We believe that the favorable impact to leverage following the sale via the reduction of mortgage debt and release of preferred equity, made for a compelling transaction that was worth pursuing.”
Invesque already has sold seven Commonwealth-managed communities for $65.4 million and has plans to sell 20 more, the publicly traded healthcare real estate investment company announced.
Proceeds from the sale of the seven properties — located in Maryland, Tennessee and Virginia — are being used to pay off the property level mortgage debt associated with the communities and further reduce borrowings under the KeyBank credit facility by $6.1 million, the company said. Invesque is retaining $7.8 million to maintain “appropriate” liquidity levels.
Invesque also continues to reduce its holdings in skilled nursing, in late September selling a skilled nursing facility in Illinois for $16.5 million, further reducing borrowings under the KeyBank credit facility. Following this sale, the company owns only two SNFs.
“I am pleased to highlight the continued execution of our strategy to reduce our overall leverage while retaining a core portfolio of strong cash flowing seniors housing assets,” Chester said. “The recent dispositions and the KeyBank paydowns associated with them, as well as several refinancings over the last 120 days, have reduced our leverage point with KeyBank to below 60%, providing additional flexibility for the Company as we continue our path forward.”
Chester said that if all disclosed transactions close, Invesque will have reduced its leverage to less than 50%, which will represent a reduction of more than 30% compared with the balance sheet as of June 30.
“This substantial reduction is a result of the company’s stated strategy to de-risk and streamline our balance sheet,” he said.
