KKR to Invest $150M of Equity in Sentio Healthcare

By Gail Kalinoski, Contributing Editor

Kohlberg Kravis Roberts & Co. L.P. is providing $150 million of equity to Sentio Healthcare Properties, Inc., a REIT that invests in senior housing and medical facilities, to help it grow its portfolio.

Both firms said an affiliate of global investment firm KKR will invest with Sentio’s current shareholders in the Orlando, Fla.-based REIT over the next two to three years. The proceeds will be used for acquisitions. KKR is Sentio’s largest equity partner to date.

“We are very excited to have an industry leader like KKR as a long-term partner who can help us access new opportunities through its vast network of relationships,” John Mark Ramsey, Sentio president and CEO, said in a prepared statement. “We believe KKR’s financial commitment and real estate and capital markets capabilities will complement Sentio’s industry expertise to help us drive meaningful shareholder value in the coming years.”

Founded in 2006, Sentio owns 20 health-care related assets in at least 10 states. Fifteen are senior housing, including independent living, assisted living and skilled nursing facilities. The remaining breakdown is two medical offices – Physicians Centre in Bryan, Texas, and Hedgcoxe Health Plaza, in Plano, Texas – and three specialty medical facilities such as in-patient rehabilitation and long-term acute care hospitals. Some of the assets are triple-net leased properties.

The REIT’s most recent acquisition occurred in September, when Sentio acquired a portfolio with four assisted living facilities for $49 million in a joint venture with JEA Senior Living. The portfolio had a total of 130,800 square feet, 264 beds and 152 units. All of the facilities are for residents with Alzheimer’s’ or other memory ailments. Three of the four properties are in Illinois – Springfield, Urbana and Normal – the remaining site is in Bryan, Texas.

Sentio currently owns assets in Texas, Florida, Indiana, South Carolina, Tennessee, Ohio, Pennsylvania, New Hampshire, Illinois, Georgia and Colorado but is looking to expand to other states and regions.

This is not KKR’s first investment in the senior housing sector. In September, the global investment firm agreed to team up with Beecken Petty O’Keefe & Co. and Coastwood Senior Housing Partners to purchase Sunrise Senior Living’s management company component for $130 million.  The management company has contracts covering 282 communities, leasehold interests in 15 communities and 12 development parcels, according to a September KKR press release. The acquisition is expected to close this quarter.

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