American Healthcare REIT set to acquire full ownership of Trilogy REIT Holdings

In an influential transaction within the senior healthcare real estate sector, American Healthcare REIT, Inc. (“AHR”) has declared an agreement that could lead to full ownership of Trilogy REIT Holdings, LLC (“Trilogy REIT Holdings”), a subsidiary under AHR. The deal with NorthStar Healthcare Income, Inc. (“NorthStar”) gives AHR an exclusive option to acquire NorthStar’s minority membership interest, which upon completion would result in AHR’s 100% ownership of Trilogy REIT Holdings, and, indirectly, a significant majority of 97.4% in Trilogy Investors, LLC.

Deal Price and Option Terms

The option, which can be exercised by AHR until September 30, 2025, comes with an all-cash purchase price tag ranging from $240.5 million to $260.0 million, based on the closing date. AHR also has the flexibility to combine cash with new convertible preferred stock to fulfill up to 90% of the transaction value.

Trilogy’s Senior Health Care Legacy

Trilogy, renowned since 1997 for its high-quality senior health campuses across key Midwestern states, is a cornerstone in AHR’s $4.4 billion portfolio. It boasts 123 properties with a capacity exceeding 13,000 beds. Trilogy offers a spectrum of senior care services from assisted living to skilled nursing facilities. The brand’s growth trajectory has been commendable, with recent reports showing a significant rise in both same-store occupancy and net operating income.

Strong Performance and Industry Position

Danny Prosky, AHR’s president and CEO, highlighted Trilogy’s resilience and leadership in the senior care space, particularly in light of a robust recovery from the pandemic’s impact on the industry. This potential acquisition aligns with AHR’s investment strategy to bolster its portfolio with high-performing assets.

The purchase option represents a significant potential consolidation within the senior healthcare industry, as AHR could enhance its operational capacity and market influence by integrating Trilogy’s assets fully into its structure. The transaction is subject to customary conditions but does not require regulatory approvals, paving the way for a streamlined acquisition process.