Well, it’s finally done. Welltower and National Health Investors entered into a settlement agreement over the unpaid rent from 17 legacy Holiday Retirement properties that Welltower had not made contractual rental payments on since its August 2021 takeover of the portfolio. It is still baffling why the issue ever arose, especially since Welltower had contractual obligations to the landlord, NHI. But we are glad they can put this matter behind them, although we will see how much the two parties will work with each other going forward. Regardless, NHI held firm, was in the right, and won.
The settlement agreement included a payment of $6.9 million, which is expected to be recognized in the second quarter of 2022, and NHI held a security deposit that was applied to outstanding rent and recognized in rental income in Q1. That adds up to $15.7 million, or close to the more than $16 million of unpaid rent NHI claimed earlier this year.
In addition, the operations of six communities were transitioned to a new relationship with Merrill Gardens, while nine were transferred to Discovery Senior Living, both under new RIDEA agreements. One other property was transitioned to an existing master lease with Discovery, and another was sold. With the new RIDEA agreements, NHI stands to benefit from significant upside after a difficult winter, occupancy-wise. And their operating partners will be more motivated too.
