National Health Investors expanded its relationship with Navion Senior Solutions, announcing an acquisition, funding of a community expansion project and funding of a corporate loan for the operator to put towards future development costs. The investments total approximately $13.2 million.
First, NHI acquired a 48-unit assisted living/memory care community in Manchester, Tennessee, adding it to an existing master lease with Navion which has a 12-year maturity, 2.5% annual escalators, and two five-year extensions. The community was purchased for $6.5 million, or $135,400 per unit, excluding about $100,000 of closing costs. That results in an initial yield of 7.5%.
NHI also provided approximately $3.0 million to Navion to fund a 10-unit expansion at its seniors housing community in Durham, North Carolina. The expansion financing is added to the lease basis and has an incremental lease rate of 8.0%. The REIT had acquired the 36-unit property from HHHunt in December 2017 for $7.55 million, or $237,500 per unit, and added the community to its master lease with Navion. It was built in 1993, and NHI planned to invest up to $650,000 to both renovate the building and add four extra units.
Finally, NHI provided a 10-year corporate loan to Navion totaling $3.6 million, with an interest rate of 8.0%. In connection with the loan, NHI has a right of first refusal to provide permanent development financing for a future project.
