Diversified Healthcare Trust · NASDAQ:DHC
Diversified Healthcare Trust — Senior Housing Properties Trust — Merger or Acquisition (February 2014)
18 slides from Diversified Healthcare Trust's merger presentation, Feb 14, 2014
Slide 1: Acquisition Announcement, February 11, 2014
Senior Housing Properties Trust ~~ Acquisition Announcement, February 11, 2014 Vertex Pharmaceuticals, Inc. Seaport District, Boston, MA
Slide 2: Disclaimer
Disclaimer. 2 THIS PRESENTATION CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. ALSO, WHENEVER WE USE WORDS SUCH AS "BELIEVE," "EXPECT," "ANTICIPATE," "INTEND," "PLAN," "ESTIMATE," OR SIMILAR EXPRESSIONS, WE AR
Slide 3: Investment summary
Investment summary. Transaction Summary Benefits of the Transaction Financial Consideration ‘Senior Housing Properties Trust Two class A, LEED Gold, newly built biotech MOBs. Located on the waterfront in the Seaport District, Boston's fastest growing submarket Immediately accretive to SNH shareholde
Slide 4: The properties
The properties. Two 15-story Class A buildings; state-of-the-art new construction at 11 Fan Pier Boulevard and 50 Northern Avenue, Boston, MA. Built-to-suit for Vertex Pharmaceuticals; delivered in December 2013. 1,651,037 gross building square feet including: 1,082,417 square feet of biomedical res
Slide 5: Northern Avenue
50 Northern Avenue. Senior Housing Properties Trust 6
Slide 6: The Seaport District: Boston's premier location
The Seaport District: Boston’s premier location. Prime real estate in the Seaport District, Boston’s fastest growing submarket and one of the nation’s top investment markets, which includes Boston’s “Innovation District” and Fan Pier. Billions of dollars of public investment in infrastructure for mo
Slide 7: The Seaport District: a cultural, social and hospitality nexus
The Seaport District: a cultural, social and hospitality nexus. 8 50 Northern Avenue Seaport District landmarks & highlights: Boston Convention & Expo Center. World Trade Center. Institute of Contemporary Art. Numerous restaurants and cafes, including Legal Sea Foods and Del Frisco’s Steakhouse. Amp
Slide 8: The tenant: Vertex Pharmaceuticals, Inc.
The tenant: Vertex Pharmaceuticals, Inc. Vertex Pharmaceuticals, Inc. (NASDAQ: VRTX) is a leading biopharmaceutical company that develops and commercializes therapies for Cystic Fibrosis and Rheumatoid Arthritis, among others. Vertex has a robust pipeline of late-stage medicines which positions them
Slide 9: Vertex lease and other revenues
Vertex lease and other revenues. Vertex is committed to the entire research lab and office space for a 15-year NNN lease term. Rent starting at $62.50 per square foot which is below market. $5 per square foot increases in both years 6 and 11. The Vertex lease represents 96% of the total rentable squ
Slide 10: Rent compares favorably to other destination medical office and lab space
Rent compares favorably to other destination medical office and lab space in the Boston area. 11 Property Industry City District SF Signed Start Term Average NNN rate per SF TI per SF Center for Life Sciences Biotech Boston Roxbury/Dorchester 50,529 5/1/11 5/1/11 10 years $95.00 $0.00 Center for Lif
Slide 11: Transaction details
Transaction details. SNH’s strong balance sheet and sufficient liquidity enable this Class A transaction. Purchase price of $1.125B; approximately $682 per gross square foot. NOI is expected to average 7% per annum, including reasonable estimates of parking revenues. Immediately accretive to SNH sha
Slide 12: Financing details
Financing details. Acquisition funding will be an appropriate mix of debt and equity capital, depending on the cost of such financing and market conditions. Debt options: bank term loan (swapped to fixed rate), mortgage debt and unsecured senior notes. Equity options: both common and preferred share
Slide 13: Improved diversity of property type and portfolio mix
Improved diversity of property type and portfolio mix: pro forma NOI is 97% private pay. 14 Note: Based on the three months ended 9/30/13, pro forma for the acquisition of the Vertex buildings for $1.125B and the sale of two rehabilitation hospitals for $90M on 12/31/13. Pro forma NOI by Property Ty
Slide 14: Leverage and coverage ratios remain conservative
Leverage and coverage ratios remain conservative. 15 Actual as of 9/30/13 SNH Pro forma(1) SNL US REIT Healthcare Index Total Debt / Total Market Capitalization 30% 37%(2) 30% Total Debt / Total Book Capitalization 41% 46% 47% Total Debt / Total Assets Capitalization 40% 46% 45% Total Debt / Gross B
Slide 15: Acquisition further strengthens SNH's medical office portfolio
Acquisition further strengthens SNH’s medical office portfolio. 16 Medical Office Buildings Note: Percentages based on pro forma NOI assuming the acquisition of the Vertex buildings.
Slide 16: Medical office building portfolio expansion
Medical office building portfolio expansion. 17 Representative Tenants ($ in thousands) Square Feet Annualized Rental Income % Lease Expiration Vertex Pharmaceuticals 1,082,417(1) $75,248 28.1% 2028 Aurora Health Care, Inc. 643,000 $16,896 6.3% 2024 Cedars-Sinai Medical Center 115,000 $10,776 4.0% 2
Slide 17: Investment summary
Investment summary. Twoclass A, LEED Gold, newly built biotech MOBs. Located on the waterfront in the Seaport District, Boston's fastest growing submarket Transaction Summary Immediately accretive to SNH shareholders; estimated $0.06 - $0.08 of Normalized FFO/share accretion per year 45-year NNN lea
Slide 18: Acquisition Announcement, February 11, 2014
Senior Housing Properties Trust ~~ Acquisition Announcement, February 11, 2014 Vertex Pharmaceuticals, Inc. Seaport District, Boston, MA
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