American Healthcare REIT (AHR) has entered into a purchase agreement to take full ownership of its subsidiary, Trilogy REIT Holdings, in which it had a majority stake.

NorthStar Healthcare Income, which owns 24% currently, has granted AHR the option to acquire all the minority membership interest held by NorthStar. 

This is another large purchase for American, which last year completed a merger with Griffin-American Healthcare REIT III, creating a combined $4.2 billion in healthcare real estate assets.

If AHR exercises the option to acquire minority membership, it will achieve full ownership of Trilogy REIT Holdings and indirectly hold 97.4% of Trilogy Investors, with the remaining 2.6% minority interest primarily owned by certain executives and employees of Trilogy’s operator, Trilogy Management Services., LLC.

Under the terms of the purchase agreement, AHR can exercise its option at any time on or before September 30, 2025, at an all-cash purchase price ranging from $240.5 million to $260.0 million, depending on the closing date.

Trilogy, founded in 1997, is an owner-operator of purpose-built integrated senior health campuses located across Indiana, Ohio, Michigan, and Kentucky.

Trilogy has expanded through the development of new campuses and expansions of existing ones. Trilogy operates a total of 123 properties, housing more than 13,000 beds, and provides various levels of care, including assisted living, memory care, independent living, and skilled nursing services.

“Trilogy constitutes more than a third of American Healthcare REIT’s $4.4 billion portfolio and is the strongest performing component,” Danny Prosky, President, and CEO of AHR, said in a press release. “Trilogy is one of the nation’s finest senior care operators, as evidenced by its remarkable recovery from the COVID pandemic, which battered the senior care industry.”

Over the past year, Trilogy has grown significantly. Same-store occupancy increased by 380 basis points to 86.0% for the second quarter compared to the same period the previous year. Additionally, same-store net operating income increased by 16.9% for the three months ending June 30, 2023, compared to the same period the previous year.