Northstar Realty pays $4B for nontraded REIT

Putting months of speculation to rest, nontraded real estate investment trust Griffin-American Healthcare REIT II Inc. said this morning it had reached an agreement to merge with publicly traded real estate finance company NorthStar Realty Finance Corp. in a cash and stock transaction with a value of $4 billion, including debt. Griffin-American Healthcare REIT II shareholders will receive $11.50 per share, including $7.75 per share in cash and $3.75 worth of NorthStar Realty common stock. After a slow start to the year, liquidity events — meaning mergers and acquisitions — of nontraded REITs have picked up. In May, published reports indicated that Griffin-American Health REIT II's board was in exclusive talks to strike a deal with Nicholas Schorsch's American Realty Capital Healthcare Trust Inc. That never came to fruition. Weeks later, ARC Healthcare was sold to another publicly traded healthcare REIT, the giant Ventas Inc., for $2.6 billion in cash and stock. NorthStar has been adding healthcare real estate to its portfolio of properties. Griffin-American Health REIT II is the second such acquisition this year for the REIT, which was up 75 cents in early trading Tuesday morning to $16.89 per share. The transaction is expected to close by the end of the year. The Wall Street Journal had previously reported NorthStar Realty's interest in the Griffin-American REIT, which has $3 billion in total assets and was launched in 2009. Shares were sold by independent registered reps to clients in two offerings, for $10 per share and $10.22 per share. (Check out IN's REIT rankings.)