American Healthcare REIT is spending more than $1.5B across a pair of transactions to acquire 16 senior housing facilities. 

The REIT announced on Monday that it was kicking off a strategic partnership with Kensington Senior Living with the acquisition of an eight-property portfolio for $873M. On Wednesday, it announced the acquisition of another eight assets on the East Coast for $696M from a group of sellers. 

AHR has already acquired 14 of the 16 assets, with the sale of two Kensington communities expected to close in the fourth quarter to finalize that transaction. The REIT, which has a roughly $12.9B market capitalization, has already deployed more than $2B in investment capital this year. 

Its stock was trading down Wednesday but is up more than 15% this year following a rally that began in June. 

The Kensington deal totals 745 units, 93% of which are assisted living or memory care, spread across the Los Angeles, San Francisco, Washington, D.C., and New York metropolitan areas. AHR said the assets fit its acquisition profile because of their placement in high-end markets where there’s a high barrier to entry. 

“We are acquiring Class A, luxury senior housing that is extraordinarily difficult to replicate, in some of the most affluent and supply-constrained markets in the country,” AHR CEO Jeff Hanson said in a statement. 

The portfolio acquisition disclosed Wednesday included 10 properties, two of which AHR passed along to a different undisclosed institutional investor as part of the deal. The eight properties AHR acquired are similarly concentrated in affluent markets and span 867 units across Massachusetts, Connecticut, New Jersey, Pennsylvania, Delaware and Georgia. 

The deal also included a new operating relationship with Norwood, Massachusetts-based LCB Senior Living, which develops and operates luxury communities in the Northeast and mid-Atlantic. 

“We have sought a relationship with LCB for some time, and we have been looking for the right way into these East Coast markets. This gave us both, at scale,” AHR Chief Operating Officer Gabe Willhite said in a statement. 

AHR wasn’t the highest bidder in the Kensington portfolio deal, but it was selected by the operator because of the strategic expansion opportunities offered by the partnership, Dave Faeder, a founding managing partner at Kensington, said in a statement. 

“What distinguished AHR was how they approached the relationship. Our conversations started with alignment around resident care quality and employee culture. We also saw a long-term capital partner with the scale and capacity to support our growth and a demonstrated history of building enduring operating partnerships,” he said. 

AHR is also bringing in a new chief financial officer as it expands its portfolio. Aric Chang, previously the CFO at Public Storage, will take over from Brian Paey on Oct. 1, the company announced Tuesday. 

The REIT's portfolio at the end of June included 327 properties spanning 23.3M SF in the U.S. and UK.

The firm reported $30.6M net income in the second quarter on $675M in revenue. Same-store net operating income growth was up 20.5% for its senior housing business and 16.1% for its senior health campuses compared to the prior year. It beat analyst expectations and increased its full-year guidance for NOI growth by 2 percentage points. 

Investors from the retail space to the institutional sector are flocking to senior housing as a demographic play, with a wave of aging baby boomers already pushing up occupancy and the shortage of units projected to hit one million by 2050.