NHI Acquires SNF Portfolio in $37 Million Deal, Sells Six Others

| September 3, 2013

National Health Investors (NYSE:NHI) announced on Tuesday the acquisition of eight skilled nursing facilities in a $37 million transaction, along with the sale of six skilled nursing facilities and the resolution of a settlement agreement involving ElderTrust and SeniorTrust.

NHI completed the acquisition from ElderTrust of Florida, Inc. on August 30 for $23.3 million in cash and the cancellation of notes receivable from ElderTrust with a principal balance of $13.7 million. The deal involved eight skilled nursing facilities located in Massachusetts and New Hampshire. 

Effective Sept. 1, 2013, the facilities are under a new triple-net lease to their current manager, National Healthcare Corporation (NYSE:NHC) for an initial period of 15 years at a lease amount of $350,000 for the remainder of 2013. The base lease amount will increase to $3.4 million beginning in 2014 with an additional annual rent escalator calculated as 4% of the increase in each facility’s revenue over a 2014 base year, starting in 2015. 

The transaction caps a settlement agreement announced in April for NHI and NHC, its largest tenant, to resolve a long-standing dispute relating to accusations they overpriced assets sold to SeniorTrust and ElderTrust, two nonprofit senior care entities NHI helped establish. 

Earlier this year, NHI agreed to a full settlement of its notes receivable from SeniorTrust of Florida, Inc., for $15 million in cash, which the REIT received in June.

Following that settlement and the cancellation of ElderTrust’s notes, NHI has now completed the settlement agreement with SeniorTrust and ElderTrust and considers the previously disclosed investigation by the Office of the Tennessee Attorney General to be resolved in full.

The lawsuits regarding the two nonprofit corporations will be dismissed as part of the agreement, NHI announced.

A previously disclosed agreement for NHI to sell six skilled nursing facilities to NHC for $21 million in cash closed on August 29. NHI and NHC have also agreed to extend the master lease of 32 skilled nursing facilities and three independent living facilities through December 2026. 

Written by Alyssa Gerace 


Companies: ,

Category: Acquisitions, Management & Operations, REIT, Senior Housing, Skilled Nursing

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