Fortress Investment Group is in talks with Colony Capital to acquire a portfolio of medical office buildings and senior housing properties valued at $3.3B from Colony, Bloomberg reports, citing anonymous sources familiar with the matter.
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The deal would represent a move away from "noncore" assets by Colony, which is currently emphasizing its digital infrastructure holdings, including data centers, cell towers and fiber networks.
Colony inked a deal in September to sell about 200 hotels to Highgate, a hotel management specialist, which valued the indebted properties at $2.8B. In 2019, Blackstone Group bought Boca Raton, Florida-based Colony's warehouse portfolio in a $5.9B deal.
Colony now refers to its healthcare portfolio as "wellness infrastructure," according to a recent filing with the Securities and Exchange Commission. That includes senior housing, skilled nursing facilities, medical office buildings and hospitals.
The company earns income from some of those assets under net leases to single tenants or operators and from MOBs that are both single-tenant and multi-tenant. Some of the company's senior housing properties are managed by operators under a REIT Investment Diversification and Empowerment Act, or RIDEA, structure, which allows tax benefits compared to receiving rent under a net lease arrangement.
For SoftBank-backed Fortress, the deal would represent a further expansion into healthcare assets. The investor previously owned a controlling stake in Brookdale Senior Living, which it took public in 2005. It sold its remaining interest in that company in 2014.
ATI Physical Therapy, a major chain of outpatient physical therapy clinics in the U.S., will go public in a deal with Fortress Value Acquisition Corp. II, a blank check company formed by Fortress.
New York-based Fortress, along with Altamont Capital Partners, recently struck a deal to buy the bankrupt Alamo Drafthouse Cinema, a chain of upmarket movie theaters that was hit hard by the coronavirus pandemic.
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