The publicly traded REITs seem to be some of the most obvious group of investors to take advantage of the attractive buying opportunity in seniors housing today, but so far, Welltower has hogged most of the spotlight. That is unsurprising, given Welltower’s size. And the smaller REITs saw few portfolio deals on the market in the last year, instead having to acquire properties in piecemeal.
However, National Health Investors has announced its largest deal since 2020, acquiring 10 assisted living/memory care communities in North Carolina for $121.3 million, or $232,400 per unit. Blueprint originally marketed two communities on behalf of the joint venture owner, but the deal eventually grew to include Spring Arbor Management’s entire North Carolina portfolio of 10 properties. We believe the properties were part of Foundry Commercial and Morgan Stanley Real Estate’s acquisition of 24 Spring Arbor/HHHunt communities across North Carolina, Virginia and Maryland.
Totaling 522 units, the 10-property portfolio was spread out across North Carolina, but no locations suffered any material impact from Hurricane Helene. Spring Arbor will stay on as operator under a 15-year master lease with two five-year renewal options and annual fixed escalators or 2.0%.
NHI paid $121.3 million, inclusive of transaction costs, at an initial cash yield of 8.23%, putting the cap rate at an estimated 9.0%. Blueprint’s Brooks Blackmon, Ben Firestone, Lauren Nagle and Kyle Hallion handled the transaction. NHI funded the acquisition entirely from its revolving credit facility and brought its year-to-date investments to $205.6 million, with an average initial yield of 8.4%. NHI also estimated its investment pipeline at approximately $305 million, including a mix of SHOP, sale/leaseback and loan opportunities, primarily in senior housing and excluding multiple larger portfolio opportunities. Interesting.
