Sabra Health Care REIT announced a pair of acquisitions, totaling almost $85 million. First the REIT purchased four senior living communities, with 214 total units, in the Pacific Northwest for $65 million, or $303,700 per unit. Three of the properties are located in Oregon and one in Washington, with a total of 122 assisted living units, 74 memory care units and 18 independent living units. Built between 1989 and 1995, with various renovations between 2003 and 2011, the portfolio averaged 96.4% occupancy in 2014 and operated at a 33% margin on $13.9 million of revenues, resulting in a 7.1% cap rate. Sabra leased the properties to Radiant Senior Living, with an initial term of 10 years and two 5-year renewal options. The lease also provides for an annual rent escalator of 3.0%, resulting in annual lease revenues, determined in accordance with GAAP, of $5.0 million and an initial yield on cash rent of 6.75%. CBRE represented the seller in the transaction.
Second, Sabra acquired five seniors housing communities, dubbed the “Life’s Journey Senior Living Portfolio,” with 149 primarily memory care units for $19.7 million, or $132,200 per unit. Concurrently with the purchase, Sabra entered into a triple-net master lease agreement with Life’s Journey Senior Living for the portfolio. The lease has an initial term of 10 years with two 5-year renewal options and provides for an annual rent escalator equal to the greater of the Consumer Price Index and 3.0%, resulting in annual lease revenues, determined in accordance with GAAP, of $1.7 million and an initial yield on cash rent of 7.5%. Sabra funded both transactions with available cash proceeds from Sabra’s revolving credit facility. These are the ninth and tenth acquisitions announced by Sabra in the last 12 months, representing a total investment of over $1.1 billion.
