National Health Investors sold a couple of memory care communities in Texas that it acquired as part of a larger portfolio deal in March 2017. The divestment was part of the REIT’s strategy to optimize its portfolio by “pruning underperforming assets.” These properties were previously classified as held for sale and operated under net operating income-based leases from which NHI received no rental income in 2021 or in Q1:22.
Constructed in 2011, Revere Court of Rockwall consists of 44 memory care units, while Revere Court of Arlington, built in 2000, contains 34 memory care units. They were formerly Autumn Leaves properties before NHI acquired them from The LaSalle Group in a sale/leaseback of five communities in 2017. The deal included these two Texas communities and three Chicagoland locations. In 2019, Chancellor Health Care took over operations of the five communities when Autumn Leaves fell out of compliance with lease obligations.
The Texas communities faced further operational challenges in 2021 when its physical plant was adversely affected by “The Texas Freeze,” causing Texas’ electrical grid to go dark in places for an extended period of time. However, the communities completed physical plant restorations and made operational gains in the latter half of 2021 through closing.
Last summer, NHI engaged Blueprint Healthcare Real Estate Advisors to run a competitive marketing process on the properties. The process yielded four qualified offers with the ultimate buyer being a joint venture between Texas-based Voralto and Capital Senior Ventures. As a result of the transaction, NHI reported net proceeds of approximately $7.3 million. Brooks Blackmon of Blueprint handled the deal.
