Health Care REIT Pays $1.9 Billion for Outstanding Stock of Sunrise Senior Living Assets

It's the biggest commercial real estate deal of the year to date.

Toledo, OH-based Health Care REIT (NYSE-HON) has contracted to buy all of the outstanding stock of McLean, VA-based Sunrise Senior Living Inc. (NYSE-SRZ) for $$14.50 per share in an all-cash transaction valued at $1.9 billion.

The transaction is expected to close in the first half of 2013.

The deal will make Health Care REIT one of the world's largest owners of seniors housing with over 58,000 units located in the U.S., Canada, and the United Kingdom, according to a prepared statement from Health Care REIT.

As part of the transaction, Health Care REIT will acquire Sunrise's 20 wholly owned seniors housing communities and Sunrise's interest in joint ventures that own 105 seniors housing communities.

The 20 wholly owned communities are located in the U.S. (17) and Canada (3), while the joint venture communities are located in the U.S. (78) and the United Kingdom (27).

The deal calls for about $950 million to be paid in cash and the balance through the assumption of debt at an average interest rate of about 4.9%.

"There are few opportunities (today) to acquire assets of this quality in a transaction of this scale,"  said Sunrise CEO Mark Ordan,  ""Sunrise has been at the forefront for more than 30 years in creating best-in-class, high-end senior living communities."

BofA Merrill Lynch acted as exclusive financial advisor to Health Care REIT on the transaction. Arnold & Porter, LLP, Shumaker, Loop & Kendrick, LLP, and Sidley Austin, LLP acted as Health Care REIT's legal advisors.