Impact Healthcare REIT has bought five care homes totalling 218 beds for £12.2m from Monarch Alternative Capital LP.
The deal is for Briardene Care Home, Sovereign Lodge and Sovereign Court, all in Westerhope, Newcastle upon Tyne, Derwent Care Home in Hamsterley, Durham, and The Grove in Middlesbrough, north Yorkshire. The homes have a 94% occupancy rate.
In 2016 Monarch spent £1.4m – £6,380 per bed – on refurbishing the properties, which will all be managed by their current operator Careport.
The operator was formed nine years ago to manage care homes owned by banks and other asset owners on short-term contracts and has a track record of turning around underperforming properties.
Impact Healthcare has entered into full repairing and insuring leases on each home with a fixed 25-year term with no break clauses and a tenant option to extend to 35 years at the end of year ten.
Total initial rent of £875,000 will be subject to annual upward-only rent reviews linked to the retail price index, with a floor of 2% p.a. and a cap of 4% p.a.
Impact said it expects to purchase more homes that Careport will manage as a long-term tenant.