| RECENT ACTIVITIES |
15. RECENT ACTIVITIES
On June 28, 2013, Newcastle entered into an agreement to acquire all of the stock of a media company, which has a business similar to a company in which Newcastle has an existing loan investment, for a purchase price of approximately $82.0 million plus acquisition-related costs. The acquisition is expected to close in the third quarter of 2013.
In July 2013 and August 2013, Newcastle completed the acquisitions of senior living assets located in New York, Florida, North Carolina and Pennsylvania. Each of these acquisitions was accounted for as a business combination, under which all assets acquired and liabilities assumed are recognized at their acquisition-date fair value with acquisition-related costs being expensed as incurred. For certain properties, Newcastle has retained a portfolio company of a private equity fund managed by an affiliate of the Manager to manage the properties. Pursuant to the management agreements, Newcastle pays management fees equal to (i) 5% of the property’s effective gross income (as defined in the agreements) or (ii) management fees equal to 6% of the property’s effective gross income (as defined in the agreements) for the first two years and 7% thereafter. For the other property acquired, Newcastle has retained an affiliate of the Manager to manage the properties. Pursuant to the management agreement, Newcastle pays management fees equal to 6% of the property’s effective gross income (as defined in the agreement) for the first two years and 7% thereafter. In addition, Newcastle will reimburse the property manager for certain expenses, primarily the compensation expense associated with the on-site employees. The following table provides additional information relating to these acquisitions:
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Number of
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Number
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Purchase
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Outstanding
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Final Stated
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Portfolio
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Acquisition Date
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Location
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Communities
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of Beds
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Price
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Debt (A)
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Maturity
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Funding Cost
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Woodside (B)
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July 25, 2013
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New York
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1 |
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100+ |
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$ |
18,900 |
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$ |
14,100 |
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August 2016
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LIBOR + 3.75%
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(D)
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Florida (B)
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August 1, 2013
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Florida/North Carolina
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15 |
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2,000+ |
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$ |
200,050 |
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$ |
93,364 |
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July 2018
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LIBOR + 3.75%
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(D)
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$ |
52,875 |
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April 2020
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5.50% to 6.76%
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(E)
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Glen Riddle (C)
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August 1, 2013
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Pennsylvania
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1 |
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100+ |
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$ |
21,150 |
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$ |
16,875 |
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October 2017
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LIBOR + 3.75%
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(D)
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(A)
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Investments are financed with non-recourse debt.
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(B)
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Managed by a portfolio company of a private equity fund managed by an affiliate of the Manager.
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(C)
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Managed by an affiliate of the Manager.
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(D)
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These financings have a LIBOR floor of 1%.
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(E)
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Fixed rate loans that Newcastle assumed from the seller upon acquisition. In this transaction, Newcastle bought down the interest rate for each assumed loan to 4% for the first two years
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In June 2013, Newcastle entered into purchase and sale agreements to acquire two senior living assets for purchase prices of approximately $16.5 million and $18.5 million, respectively, plus acquisition-related costs. The assets comprise more than 300 beds in senior living facilities located in Florida and Pennsylvania.
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