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Emeritus to buy out Blackstone in senior living JV

Emeritus Corp. agreed to pay $99 million to take full ownership pf 24 properties it jointly owns with Blackstone Group LP’s real estate arm, Reuters reported. The transaction values the properties at $310 million, factoring in debt reduction and incentives for rising cash flows, Emeritus said. Emeritus is a Seattle, Wash.-based provider of assisted-living housing. Emeritus and Blackstone acquired the properties for $190 million in 2007, with Blackstone picking up an 81 percent stake.

* Emeritus to pay about $99 mln for 24 properties
* Deal is latest in recovering senior housing sector
* Focus now on larger joint venture
(Reuters) – Emeritus Corp (ESC.N: Quote, Profile, Research, Stock Buzz), a leading provider of assisted-living housing, said it will pay about $99 million to take full ownership of 24 properties it owns jointly with Blackstone Group LP’s (BX.N: Quote, Profile, Research, Stock Buzz) real estate arm, the latest in a series of deals in the recovering sector.

The sale values the properties at $310 million, factoring in debt reduction and incentives for rising cash flows, Emeritus said on Thursday.

The partners paid $190 million for the properties in 2007, with Blackstone taking an 81 percent stake.

The U.S. assisted-living sector has been steadily improving since it bottomed out in early 2009. With little supply and a growing aging population, there are increasing opportunities to increase revenue through higher occupancy and higher rents.

The deal puts the spotlight on an even-larger joint venture involving Emeritus and Blackstone Real Estate Advisors.

The two companies and Columbia Pacific, run by Emeritus Chairman Dan Baty, bought Sunwest, a portfolio of 144 communities, out of bankruptcy for $1.3 billion. Blackstone has about a 70 percent stake in that joint venture.

Emeritus owns or has a stake in 482 U.S. senior living communities.
“I think the company is getting a reputation for being a good operator and being able to turn things around,” Morgan Keegan analyst Robert Mains said.

The senior housing sector has been among the most active in U.S. commercial real estate in recent months.

Big deals include HCP Inc’s(HCP.N: Quote, Profile, Research, Stock Buzz) $6.1 billion takeover of HCR ManorCare Inc and Health Care REIT Inc’s (HCN.N: Quote, Profile, Research, Stock Buzz) $2.4 billion purchase of Genesis Healthcare Corp.

Emeritus shares closed up 0.4 percent at $23.21 outperforming the benchmark MSCI U.S. REIT Index .RMZ, which closed down 0.2 percent.
(Reporting by Ilaina Jonas; Editing by Ted Kerr)