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U.S.-Based MBK Real Estate LLC to Acquire Senior Living Properties

May 23, 2018


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MBK Real Estate LLC ("MRE"), a U.S.-based wholly owned subsidiary of Mitsui & Co., Ltd. ("Mitsui", Head Office: Tokyo, President and CEO: Tatsuo Yasunaga), is pleased to announce that it has entered into a definitive agreement to acquire senior living properties and their operations from the current operators, West Living LLC ("West Living", Head Office: California, U.S., President: John Rimbach). The properties to be acquired ("the Properties") consist of a total of 9 assets located in the U.S. in the states of California, Washington, and Arizona, with an acquisition cost of US$382 million (equivalent to approx. 42.0 billion yen). The closing of this transaction is scheduled to occur in late June, 2018.

MRE commenced its senior living business in 1990. After acquisition, MRE will aim to utilize its longstanding experience and operational know-how to maintain properties, including 1) the quality of service, 2) property improvements through renovations, and 3) sales and marketing methods based on local demand. MRE currently owns and/or manages 25 senior living properties consisting of approximately 2,600 units in 6 states. By acquiring the Properties, the number of properties owned/managed by MRE will be 34, consisting of approximately 3,800 units. The Properties are geographically close to the locations of currently owned/managed properties, allowing MRE to execute an efficient operation.

In the United States, as in Japan, the elderly population is increasing. It is expected that the population of adults over 65 years old will increase to 98 million by 2060, accounting for 24% of the whole population, from 46 million people in 2014, the equivalent of 15% of the whole population (*).
The "healthcare" and "retail services" are defined as part of the strategic growth areas for Mitsui, as set forth in its Medium-term Management Plan announced in May, 2017. Acquiring the Properties is consistent with this strategic plan and addresses the increasing demands for U.S. senior housing.

(*) Data source: U.S. Census Bureau, 2014 National Projections

1. Project Overview

Property Locations California, Washington and Arizona
Properties 9 properties/approx. 1,200 units
Acquisition Cost US$ 382 million
NOI US$ 21 million (total of all 9 properties, forward 12 months)

2. Overview of MRE

Name of Company MBK Real Estate LLC
Head Office Irvine, California, U.S.A.
Establishment January, 1990
Representative Katsuo Yamanaka, President
Employees 1,539 as of March 2018
Shareholder Wholly owned by Mitsui & Co., Ltd.
Business Activities Real estate business:
Owning and managing senior living properties (25 facilities, approx.2,600 units in total), developing and leasing multi-family housing (6 projects, approx.1,600 units), developing and leasing industrial real estate properties (1 project)
Total Assets US$ 637 million as of March 2018

3. Overview of West Living LLC

Head Office Carlsbad, California, U.S.A.
Establishment 2007
Representative John Rimbach (President/CEO)
Business Activities Management and operation of senior living facilities
Key Shareholder West Partners, LLC

Locations of the Properties and MRE owned/managed Senior Living Properties

Locations of the Properties and MRE owned/managed Senior Living Properties

Images of MRE owned Senior Living Properties. "The Country Club of La Cholla" (Tucson, Arizona)

Images of MRE owned Senior Living Properties. "The Country Club of La Cholla" (Tucson, Arizona)

Images of MRE owned Senior Living Properties. "The Country Club of La Cholla" (Tucson, Arizona)

Information

For inquiries on this matter, please contact

Mitsui & Co., Ltd.
Investor Relations Division
Telephone: +81-3-3285-7910
Facsimile: +81-3-3285-9821
infoTKADZ@mitsui.com
Mitsui & Co., Ltd.
Corporate Communications Division
Telephone: +81-3-3285-6645
Facsimile: +81-3-3285-9819