National Health Investors, Inc. entered into a joint venture with Discovery Senior Living to acquire six senior living communities in Pennsylvania, Maryland and Indiana from affiliates of Kayne Anderson Real Estate Advisors. The venture, of which NHI is a 97.5% owner, spent close to $126.850 million, or about $212,800 per unit, on the portfolio that totaled 145 independent living, 356 assisted living and 95 memory care units. Discovery, the existing operator, leased the portfolio under a 10-year agreement, with a 6.5% initial annual cash yield, a CPI-based escalator with a 2% floor and 3% cap beginning in year-two, and two five-year extension options. In addition to the base purchase price, the joint venture spent up to $1.5 million in estimated closing costs and expenses.
NHI also provided a $6 million senior mortgage loan at 7% annual interest to affiliates of Discovery for an additional property in Indiana. The JV also has the option to purchase the 74-unit assisted living/memory care community at stabilization.