National Healthcare Properties raised $462M in its initial public offering, missing its price target despite growing interest in the senior living sector.
The New York-based REIT sold 38.5 million shares at $12 apiece after marketing the IPO at a $13-to-$16-per-share range. The senior housing and medical office owner has been losing money for at least the last three years and plans to use the newly raised cash to cut leverage.
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National Healthcare Properties is the second senior housing REIT to go public in as many months and comes as fundraising in the broader REIT sector lags amid a wave of private takeouts. Healthpeak Properties split its senior housing assets from its medical office in a March spinoff that created Janus Living, which opened ahead of its $20-per-share target.
National Healthcare Properties said in a statement Tuesday that it will use the funds to pay off a $186M revolving credit facility and “fund potential future property acquisitions and for other general corporate purposes.”
The REIT's portfolio has 37 senior housing facilities with a combined 3,615 units and 130 outpatient medical facilities totaling 3.7M SF and spread across 29 states, according to an April 13 prospectus promoting the IPO.
National Healthcare Properties had been managed by Healthcare Trust Advisors prior to a 2024 restructuring that included a $98M termination fee. It had $760M in mortgage notes at the end of September with a weighted average interest rate of 4.7% and a weighted average term of 4.6 years.
The REIT is expected to begin trading Wednesday on the Nasdaq Stock Market under the ticker NHP.
Management filed a registration with the Securities and Exchange Commission in early April that set the price range with an implied market capitalization of $1.1B. The final $12-per-share offering would value the firm around $814M based on the 67.8 million shares expected to be offered, AltsWire reported.
The valuation is a significant discount from the $32.15-per-share net asset value the board of directors set at the end of 2024 and offered in its prospectus.
Senior housing and medical offices have become popular alternative asset classes across the investor space in a bet that demographic shifts and an aging baby boomer population will propel demand for services.
Blue Owl Capital, which has attracted attention for its high-profile bets on artificial intelligence, made a $2.4B deal this week to buy net lease healthcare REIT Sila Realty Trust, paying a 19% premium on its share price to acquire 140 mostly single-tenant properties.
But medical offices haven’t been immune to the same headwinds facing the broader office sector, even though the asset class has better withstood the negative pressure.
Healthpeak management said the senior housing spinoff into another REIT was meant “to recognize our senior housing platform’s capabilities and properly value the portfolio” relative to its medical office assets.
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