National Health Investors (NYSE: NHI) made plenty of news this month, starting with the unexpected announcement that CEO Justin Hutchens was stepping down to become the CIO of HCP. The company also made three acquisitions this month, totaling $33.5 million.
First, in a sale/leaseback transaction, NHI acquired a 42-unit independent/assisted living community in Roscommon, Michigan for $6 million, or $142,900 per unit, with a 9.2% cap rate. Occupancy was 100% at the time of the sale, and in the past three years has never been below 90%. The seller, The Brook Retirement Communities, is leasing the property back from NHI for 10 years at an initial lease rate of 7.75%, representing an 8.6% yield. Evans Senior Investments represented the seller in the transaction.
The second acquisition was NHI’s purchase of a 30-unit/40-bed memory care community in Portland, Oregon, for $6.5 million, or $216,700 per unit, with a 10% cap rate. The community was built in 2010 and expanded in 2013, but there is an additional one acre of land for future expansion. NHI leased the property to existing partner Chancellor Health Care for 15 years with renewal options at an initial lease rate of 7.75% plus annual escalators, representing an 8.9% yield. Jason Punzel of Senior Living Investment Brokerage handled the transaction.
Finally, as part of its ever-growing joint venture with Bickford Senior Living, NHI acquired a 92-unit assisted living/memory care community in Lancaster, Ohio (Columbus MSA) for $21 million, or $228,300 per unit, in cash. NHI will lease the community to the JV (which now stands at 32 communities in six states) under a RIDEA structure, with Bickford managing. The transaction was valued at an 8.0% cap rate.
All three purchases were funded with cash on hand and borrowings on NHI’s revolving credit facility. For more information on these transaction, check out the September issue of The SeniorCare Investor.
