Ten months after refinancing a 43-unit assisted living/memory care community in Bellevue, Wisconsin, National Health Investors executed on a purchase option for the property. Opened in 2019, the community was operated by 41 Management through its affiliate Matthews Senior Living.
Not long after the community opened, NHI provided a $3.87 million mortgage with a one-year term and two six-month renewal options. It also came with an interest rate of 13%. In addition, NHI obtained a purchase option, which it is executing at $12.3 million, or $286,000 per unit.
The community was then leased back to 41 Management at an initial term of 15 years with two five-year renewal options. The initial cash lease yield was 7.5%, with 2.5% annual escalators. We imagine NHI would only commit to the purchase if the community was stabilized, which is impressive given the community had only a year to do so, half of which was marred by the current pandemic.