8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

October 5, 2017

Date of Report (Date of earliest event reported)

New Senior Investment Group Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	001-36499	80-0912734
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)
1345 Avenue of the Americas, 45th Floor New York, New York		10105
(Address of principal executive offices)		(Zip Code)

212-479-3140

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 8.01 Other Events.

On October 5, 2017, New Senior Investment Group Inc. (the “Company”) issued a press release announcing it expects to complete $296 million of asset sales (the “Transactions”) during the fourth quarter of 2017. The Transactions include (i) a $186.0 million sale of six triple net leased properties (the “Leased Properties”), as well as termination of the related lease (the “Leased Portfolio Sale”) and (ii) a $109.5 million sale of nine properties (the “Managed Properties”) managed by Holiday Retirement (the “Managed Portfolio Sale”), in each case as described in more detail below. The closings of the Transactions are independent of one another and are each subject to customary closing conditions. There can be no assurance that the Transactions will be completed on the terms and within the timeframe described herein, or at all. A copy of the Company’s press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.

The Leased Portfolio Sale

On September 29, 2017, certain wholly owned subsidiaries of the Company (the “Landlords”), as sellers, entered into a Purchase and Sale Agreement (the “Leased Portfolio Sale Agreement”) with LCS Dallas II LLC, as buyer (“Buyer”) pursuant to which the Buyer agreed to purchase the Leased Properties, which are currently subject to a triple net lease (the “Lease”) with LCS Dallas Operations LLC, an Iowa limited liability company (“Tenant”), an affiliate of Buyer. The Landlords will receive $186 million in total consideration, structured as a $170 million purchase price and a $16 million lease termination payment, as further described below. In connection with the execution of the Leased Portfolio Sale Agreement, Buyer funded an initial deposit of $3 million, which amount would be increased in connection with an extension of the closing date (the “Deposit”).

The Leased Portfolio Sale Agreement is scheduled to close on November 15, 2017, subject to two 30-day extension options and customary closing conditions. In the event of a material breach by Buyer, or in the event of a monetary default by Tenant under the Lease or a failure to consummate the transactions contemplated by the Termination Agreement (described below), the Landlords shall be entitled to retain one-half of the Deposit as liquidated damages and one-half of the Deposit shall be applied as additional security pursuant to the Lease.

On September 29, 2017, simultaneously with the execution of the Leased Portfolio Sale Agreement described above, the Landlords and Tenant, entered into a Lease Termination Agreement (the “Termination Agreement”) to terminate the Lease effective as of the closing of the sale of the Leased Properties pursuant to the Leased Portfolio Sale Agreement. Pursuant to the Termination Agreement, (i) the Lease and the other related documents will be terminated, (ii) the Landlords and the Tenant shall be fully relieved of and released from all obligations and liabilities that each had to the other under the Lease and related documents and (iii) the Landlords’ security interest in the Tenant Property (as defined in the Lease) shall terminate, effective as of the closing of the sale of the Leased Properties pursuant to the Leased Portfolio Sale Agreement. Pursuant to the terms of the Termination Agreement, the Tenant shall pay the Landlords a $16 million fee as consideration for the termination of the Lease and related documents. The Lease was entered into on June 30, 2014 between the Landlords and Tenant, with an initial term expiring June 30, 2029. The Termination Agreement and the Leased Portfolio Sale Agreement are each conditioned upon one another.

The Managed Portfolio Sale

On August 2, 2017, certain of the Company’s indirect wholly owned subsidiaries, as sellers, entered into two Purchase and Sale Agreements with GAHC4 Central Florida Senior Housing Portfolio, LLC, as buyer, with respect to the Managed Properties (together, the “Managed Portfolio Sale Agreements”). Pursuant to the Managed Portfolio Sale Agreements, as amended, the diligence period expired on September 22, 2017 for all but one of the Managed Properties and on September 30, 2017 for the remaining property. The Managed Portfolio Sale Agreements are subject to customary closing conditions.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain items in this Current Report may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not historical facts. They represent management’s current expectations regarding future events and are subject to a number of trends and uncertainties, many of which are beyond our control, that could cause actual results to differ materially from those described in the forward-looking statements. Accordingly, you should not place undue reliance on any forward-looking statements contained herein. For a discussion of some of the risks and important factors that could affect such forward-looking statements, see the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s annual and quarterly reports filed with the Securities and Exchange Commission, which are available on the Company’s

website (www.newseniorinv.com). New risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Any of these risks could impact the ability to complete the Transactions on the terms and within the timeframe described herein. Forward-looking statements contained herein speak only as of the date of this Current Report, and the Company expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.

This Current Report, including the exhibit attached hereto, is being furnished and shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Exchange Act, unless expressly set forth as being incorporated by reference into such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits. The following exhibits are being filed herewith:

No.	Description
99.1	Press Release, dated October 5, 2017.

EXHIBIT INDEX

No.	Description
99.1	Press Release, dated October 5, 2017.

SIGNATURES

Pursuant to the requirements of the Exchange Act, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: October 5, 2017

NEW SENIOR INVESTMENT GROUP INC.
By:	/s/ Bhairav Patel
	Bhairav Patel
	Interim Chief Financial Officer and Chief Accounting Officer

EX-99.1

Exhibit 99.1

Contact:

David Smith

212-515-7783

NEW SENIOR ANNOUNCES $296 MILLION OF ASSET SALES UNDER CONTRACT

NEW YORK — October 5, 2017 — New Senior Investment Group Inc. (“New Senior” or the “Company”) (NYSE: SNR) announced today that it expects to complete $296 million of asset sales (the “Transactions”) during the fourth quarter of 2017. The Transactions include (i) a $186.0 million sale of six triple net leased properties, as well as termination of the related lease with LCS (the “Leased Portfolio Sale”) and (ii) a $109.5 million sale of nine properties managed by Holiday Retirement (the “Managed Portfolio Sale”).

The Transactions offer distinct strategic benefits. The properties in the Leased Portfolio Sale have experienced significant occupancy and EBITDARM declines since acquisition, and the sale will eliminate the Company’s lowest covering triple net lease portfolio. In addition, the Leased Portfolio Sale, which includes four Continuing Care Retirement Communities (“CCRCs”), will substantially eliminate the Company’s exposure to skilled nursing and significantly reduce exposure to the competitive Dallas, Texas metropolitan area. The Managed Portfolio Sale will divest non-core, underperforming assisted living / memory care (“AL/MC”) assets with low net operating income (“NOI”) margins.

“The sales announced today significantly advance our stated objective of pursuing selective asset sales in order to enhance the overall quality of our portfolio. In addition, these sales are expected to generate significant dry powder for new investments and other initiatives,” New Senior Chief Executive Officer Susan Givens said.

Total consideration of $186.0 million for the Leased Portfolio Sale represents a 6.6% cap rate on 2Q 2017 annualized NOI generated by the underlying portfolio, and represents an 8.2% lease yield on 2Q 2017 annualized cash rent. Total consideration of $109.5 million for the Managed Portfolio Sale represents a 5.1% cap rate on 2Q 2017 annualized cash NOI.

In connection with the Transactions, the Company expects to repay approximately $178 million of existing debt with a weighted average interest rate of approximately 4.6%. After debt repayment, the net proceeds from the Transactions will be approximately $117.5 million (before fees and expenses). The Company intends to use the net proceeds for general corporate purposes, which may include new investments, debt prepayment and/or repurchases of common stock, depending on market conditions.

More detail about the benefits of the Transactions is set forth below:

• Improve Triple Net Lease Portfolio Coverage: The properties in the Leased Portfolio Sale have experienced significant occupancy and EBITDARM declines since acquisition, and the sale will eliminate the Company’s lowest covering triple net lease portfolio. For the second quarter of 2017, the properties in the Leased Portfolio Sale had EBITDARM coverage of 1.05x. For illustrative purposes, excluding these properties would increase EBITDARM coverage for the total triple net portfolio from 1.17x to 1.19x. EBITDARM coverage is presented one quarter in arrears on a trailing twelve month basis.

• Improve Managed Portfolio Quality: The Managed Portfolio Sale will improve the quality of New Senior’s managed portfolio on the basis of several metrics. For the second quarter of 2017, the properties in the Managed Portfolio Sale had an average occupancy of 82.3% and an NOI margin of 16.4%. For illustrative purposes, excluding these properties from second quarter 2017 results would improve same store RevPOR by 2.5% to $3,085, same store occupancy by 60 basis points to 86.8% and same store NOI margin by 190 basis points to 34.5%.

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• Increase Independent Living Exposure: The Leased Portfolio Sale is composed of four CCRCs, one AL/MC facility and one independent living (“IL”) facility, and the Managed Portfolio Sale is composed entirely of AL/MC facilities. For illustrative purposes, excluding these properties from second quarter 2017 results would improve the Company’s exposure to IL assets as a percentage of NOI from 72% to 80%.

• Improve Geographic Concentration: All of the properties being sold in the Transactions are located in Florida and Texas, which are the states that currently account for the greatest concentration of the Company’s NOI, followed by California. For illustrative purposes, excluding these properties from second quarter results would reduce the concentration of NOI from these three states from 39% to 32%.

The impact of the Transactions on various portfolio metrics is summarized below.

Metric	2Q’17		Illustrative - 2Q’17 Excl. Sale Assets
Total Number of Properties		148		133
Total Portfolio NOI—% Triple Net		51%		49%
Total Portfolio NOI—% Managed		49%		51%
Total Portfolio NOI—% IL		72%		80%
Total Portfolio NOI—% AL/MC		19%		17%
Total Portfolio NOI—% CCRC		9%		3%
Triple Net Portfolio—EBITDARM Coverage		1.17x		1.19x
Same Store Managed Portfolio—RevPOR		$3,009		$3,085
Same Store Managed Portfolio—Occupancy		86.2%		86.8%
Same Store Managed Portfolio—NOI Margin		32.6%		34.5%

The closings of the Transactions, which are independent of one another, are expected to occur by the end of 2017, subject to customary closing conditions. However, there can be no assurance that the Transactions will be completed on the terms and within the timeframe described herein, or at all. There can be no assurance that actual results would equal the illustrative information contained herein, and any differences could be material.

ABOUT NEW SENIOR

New Senior Investment Group (NYSE: SNR) is a publicly-traded real estate investment trust with a diversified portfolio of senior housing properties located across the United States. As of June 30, 2017, New Senior is one of the largest publicly-traded owners of senior housing properties, with 148 properties across 37 states. New Senior is managed by an affiliate of Fortress Investment Group LLC, a global investment management firm. More information about New Senior can be found at www.newseniorinv.com.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain items in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements regarding the expected completion of asset sales, the expected impact of those sales on the Company and the anticipated use of proceeds. These statements are not historical facts. They represent management’s current expectations regarding future events and are subject to a number of trends and uncertainties, many of which are beyond our control, that could cause actual results to differ materially from those described in the forward-looking statements. Accordingly, you should not place undue reliance on any forward-looking statements contained herein. For a discussion of some of the risks and important factors that could affect such forward-looking statements as well as the illustrative information contained herein, see the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s annual and quarterly reports filed with the Securities and Exchange Commission, which are available on the Company’s website (www.newseniorinv.com). New risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Any of these risks could impact the ability to complete the Transactions on the terms and within the timeframe described herein and the ability to deploy the net proceeds into new investments or other initiatives. Forward-looking statements contained herein speak only as of the date of this press release, and the Company expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.

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