Finance Investment Banking
July 10, 2008
By: Gail Kalinoski, Contributing Editor
Seeking capital to pursue healthcare real estate opportunities, NorthStar Realty Finance Corp. said today its healthcare real estate venture, Wakefield Capital L.L.C., sold $100 million in convertible preferred equity interest to Inland American Real Estate Trust Inc.
New York City-based NorthStar will receive about $90 million of the net proceeds in the deal, the REIT announced today. Inland American, an affiliate of The Inland Real Estate Group of Companies Inc., headquartered in Oak Brook, Ill., could convert the preferred equity into a 42 percent ownership stake. It will yield a dividend of 10.5 percent prior to conversion, according to a NorthStar release. Wakefield has the option to redeem the convertible preferred interests at any time one year after the closing. After the second anniversary, Inland American can convert its preferred equity interests into common equity in Wakefield. If it converts its interests to common equity, Inland American will be able to contribute more preferred equity and participate in new Wakefield investments.
“We are pleased to continue our healthcare real estate investment strategy in partnership with Chain Bridge Capital L.L.C. and with new sponsorship from Inland American,” David Hamamoto, NorthStar chairman & CEO, said in a release. “This recapitalization provides us with significant liquidity that we were seeking to achieve in a sale of Wakefield, as well as the opportunity to continue to participate along with our partners in the value creation opportunity that we see in the healthcare real estate sector.”
Hamamoto noted that the capital raised in this deal along with $80 million of convertible notes the REIT issued in May, “further enhances our liquidity and positions NorthStar to take advantage of some of the best market opportunities that we have seen in years.”
Officials from NorthStar and Wakefield did not return CPN’s calls before press time today to talk about some of the opportunities Wakefield plans to pursue.
NorthStar and Chain Bridge Capital founded Wakefield Capital L.L.C. in May, 2006, as a joint venture to invest in seniors housing and healthcare-related net leased properties, according to a May 10, 2006, CPN report. At that time, the JV acquired all of Chain Bridge’s assets, including an initial $64 million portfolio of 13 net-leased properties consisting primarily of assisted living facilities. The plan was to build a nationwide portfolio of assisted living, skilled nursing and other senior-living and healthcare-related assets. Based in Chevy Chase, Md., Wakefield is managed by an affiliate of Chain Bridge Capital.
Inland American is a REIT with a diverse portfolio including retail, office, multi-family, lodging and industrial properties in the United States and Canada. At the end of the first quarter, Inland American owned, directly or indirectly through joint ventures in which it has controlling interests, 882 properties with over 35 million square feet. Last month, Inland American and Lexington Realty Trust closed on a final group of assets they put into a $1.1billion joint venture set up to acquire and manage net lease properties, according to a June 3 CPN story. Net Lease Strategic Assets Fund L.P., the JV, plans to acquire up to $400 million of additional net leased properties within two years.
By: Gail Kalinoski, Contributing Editor
Seeking capital to pursue healthcare real estate opportunities, NorthStar Realty Finance Corp. said today its healthcare real estate venture, Wakefield Capital L.L.C., sold $100 million in convertible preferred equity interest to Inland American Real Estate Trust Inc.
New York City-based NorthStar will receive about $90 million of the net proceeds in the deal, the REIT announced today. Inland American, an affiliate of The Inland Real Estate Group of Companies Inc., headquartered in Oak Brook, Ill., could convert the preferred equity into a 42 percent ownership stake. It will yield a dividend of 10.5 percent prior to conversion, according to a NorthStar release. Wakefield has the option to redeem the convertible preferred interests at any time one year after the closing. After the second anniversary, Inland American can convert its preferred equity interests into common equity in Wakefield. If it converts its interests to common equity, Inland American will be able to contribute more preferred equity and participate in new Wakefield investments.
“We are pleased to continue our healthcare real estate investment strategy in partnership with Chain Bridge Capital L.L.C. and with new sponsorship from Inland American,” David Hamamoto, NorthStar chairman & CEO, said in a release. “This recapitalization provides us with significant liquidity that we were seeking to achieve in a sale of Wakefield, as well as the opportunity to continue to participate along with our partners in the value creation opportunity that we see in the healthcare real estate sector.”
Hamamoto noted that the capital raised in this deal along with $80 million of convertible notes the REIT issued in May, “further enhances our liquidity and positions NorthStar to take advantage of some of the best market opportunities that we have seen in years.”
Officials from NorthStar and Wakefield did not return CPN’s calls before press time today to talk about some of the opportunities Wakefield plans to pursue.
NorthStar and Chain Bridge Capital founded Wakefield Capital L.L.C. in May, 2006, as a joint venture to invest in seniors housing and healthcare-related net leased properties, according to a May 10, 2006, CPN report. At that time, the JV acquired all of Chain Bridge’s assets, including an initial $64 million portfolio of 13 net-leased properties consisting primarily of assisted living facilities. The plan was to build a nationwide portfolio of assisted living, skilled nursing and other senior-living and healthcare-related assets. Based in Chevy Chase, Md., Wakefield is managed by an affiliate of Chain Bridge Capital.
Inland American is a REIT with a diverse portfolio including retail, office, multi-family, lodging and industrial properties in the United States and Canada. At the end of the first quarter, Inland American owned, directly or indirectly through joint ventures in which it has controlling interests, 882 properties with over 35 million square feet. Last month, Inland American and Lexington Realty Trust closed on a final group of assets they put into a $1.1billion joint venture set up to acquire and manage net lease properties, according to a June 3 CPN story. Net Lease Strategic Assets Fund L.P., the JV, plans to acquire up to $400 million of additional net leased properties within two years.
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