Upcoming AWS Coverage on CareTrust REIT Post-Earnings Results

LONDON, UK / ACCESSWIRE / May 2, 2017 / Active Wall St. blog coverage looks at the headline from Healthcare Trust of America, Inc. (NYSE: HTA) and Duke Realty Corp. (NYSE: DRE). Healthcare Trust of America announced on May 01, 2017, that it has entered into an agreement to acquire all the medical assets including office buildings and medical development platform from Duke Realty. The all-cash transaction is valued at $2.75 billion, net of credits for development completions. The transaction will help HTA to strengthen its market position as the owner and operator of medical office buildings in key locations and markets. Register with us now for your free membership and blog access at:

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One of Healthcare Trust of America's competitors within the REIT - Healthcare Facilities space, CareTrust REIT, Inc. (NASDAQ: CTRE), announces today, Tuesday, May 02, 2017, its Q1 2017 financial results after the market closes. AWS will be initiating a research report on CareTrust REIT in the coming days.

Today, AWS is promoting its blog coverage on HTA and DRE; touching on CTRE. Get all of our free blog coverage and more by clicking on the link below:

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Commenting on the acquisition, Scott D. Peters, Chairman and CEO of HTA said:

"This transaction solidifies HTA as the dominant owner and operator of medical office buildings located in key, gateway markets in the United States. In addition, we believe the combination of our best in class property management and leasing platform and their development platform creates a full-service platform that can consistently execute and deliver disciplined growth in this expanding sector."

Jim Connor, Chairman and CEO of Duke Realty added:

"Monetizing our medical office business at a price significantly higher than what the market previously ascribed is accretive to our net asset value per share and creates a more simplified business model with improved transparency for the long-term benefit of our stakeholders while positioning our Company as the leading pure play domestic industrial REIT."

The transaction

As per terms of the agreement, HTA's acquisition will include Duke Realty's portfolio of 78 properties including Duke's interest in two unconsolidated joint venture entities, and two development land parcels with a total area of approximately 17 acres. The 78 properties included in the portfolio have a total area of 6.1 million square feet of gross leasable area (GLA). Approximately 94% of these 78 properties are already leased out.

The acquisition also includes Duke Realty's medical office operating and development platform. This platform, which has a successful track record, will allow HTA to expand its reach to new and existing medical and healthcare providers in its areas of operation.

Out of the $2.75 billion deal, net of credits, HTA will be paying $2.350 billion for 64 fully operational properties and $0.4 billion for 14 properties which are either under development or undergoing lease-up stabilization. The Company will pay increments of $50 million for completion of each property under development.

Apart from the above there are 31 properties valued $1.3 billion, which are a part of the acquisition and have the right to first offers or refusals. This could impact the overall value and affect the closing time of the transaction.

HTA will also offer seller financing of $300 million to Duke Realty in the form of senior secured first mortgage loan with a 4% interest rate. The loan is to be repaid in three annual principal installments of $110 million with the first installment starting from 2018. The seller financing does not have the option for pre-payment.

The transaction is expected to close in several parts and will be completed in Q2 and Q3 2017, subject to approvals from regulatory authorities and completion of closing conditions.

HTA has plans to raise a major part of the finance to fund this transaction via sale of 39.5 million Class A Common Shares through a public offering.

Duke Realty plans to use the funds raised from the assets sale to reduce its debt, for the development of assets, and for acquisitions to propel growth and for payment of a special dividend to its shareholders.

Benefits of the transaction for HTA

The acquisition will help HTA to scale up its operations and offerings in 17 of its key markets that have potential to grow rapidly in the next 10 years. On completion of the merger, HTA will have approximately 500,000 square feet of GLA or more in these markets. Also, nearly 85% of Duke Realty's portfolio is located within one of HTA's markets. This allows HTA to scale up its operations in these markets without taxing its corporate infrastructure.

The combined portfolio of medical office buildings will be able to easily meet future demands. Nearly 71% of the combined portfolio is located on-campus with leading health systems and the balance in core outpatient locations. This will enable HTA to meet the needs of patients as well as healthcare providers easily.

HTA and Duke Realty have a stellar track record for growth, higher operating criteria, sourcing and execution as well as strategic acquisitions and development activities. The merger will create great value for the stakeholders.

The transaction is expected to be accretive to HTA's cash flows from 2018 resulting in a strong balance sheet with future opportunities for growth.

HTA is also acquiring the highly growth oriented business of medical office platform from Duke Realty, which will add to the Company's future growth prospects.

Stock Performance

On Monday, May 01, 2017, Healthcare Trust of America's share price finished the trading session at $30.60, falling 4.05%. A total volume of 3.70 million shares exchanged hands, which was higher than the 3 months average volume of 856.29 thousand shares. The stock has rallied 7.71% and 11.11% in the last three months and past twelve months, respectively. Furthermore, since the start of the year, shares of the Company have surged 7.15%. The stock is trading at a PE ratio of 88.95 and has a dividend yield of 3.92%.

At the close of yesterday's trading session, Duke Realty's shares closed flat at $27.73. The stock saw a volume of 1.68 million shares traded. The stock performance for the last 30 days and the last 90 days were up 6.82% and 16.22% respectively. The stock has a dividend yield of 2.74% and is trading at a price to equity ratio of 29.29.

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