Based in Toronto, Ontario with a concentration of properties in Chicagoland and Texas, Mainstreet Health Investments Inc. (MHI) is entering the California and Arizona markets with an acquisition from The Ensign Group. Featuring 381 units/beds, the portfolio includes two post-acute/skilled nursing facilities and a senior living community in the Los Angeles and Phoenix markets. Ensign, which we typically see as a buyer, will continue to operate the properties, now under an absolute net master lease with an initial 20-year term and CPI-based annual escalators.

In the past year, Ensign has expressed a desire to own the real estate of more properties of its portfolio, however this transaction will reduce that number to 48 of the 211 healthcare facilities it operates, but strengthen its balance sheet at the same time. MHI’s portfolio meanwhile grew to 38 properties and over 4,800 beds across nine states and one Canadian province. The purchase price came to approximately $38 million, or $99,737 per unit/bed. In addition to the sale/leaseback agreement with MHI, Ensign was released from future lease obligations on three transitional care facilities in Kansas and Texas under development by Mainstreet Property Group. The purpose-built facilities will be subsequently leased to one or more operators.