NHI Completes $67 million Purchase of Six Florida Skilled Nursing Facilities and Closes on $100 Million Revolving Credit Facility

National Health Investors, Inc. (NYSE:NHI) recently announced that completed the purchase of six Florida skilled nursing facilities from Care Foundation of America, Inc. (CFA) for a total of $67 million and that it closed on a $100 million unsecured revolving credit facility to fund new healthcare real estate investments. 

The transaction, which was previously announced, is for facilities that are leased to affiliates of Health Services Management, Inc. for $6.2 million annually, plus a 3% escalator starting at the beginning of the third lease year. The lease expires in 2014 and the tenant has a 3 year optional renewal term. The facilities total 780 beds and have been part of NHI’s mortgage loan portfolio for 16 years. The purchase resulted in the dismissal of pending litigation between NHI and CFA. The earnings before interest, taxes, depreciation, amortization and rents (EBITDAR) for these facilities for the trailing twelve months ended November 30, 2009 totaled $10.6 million and provides a lease coverage ratio of 1.71. NHI will fund the purchase with the full satisfaction of the $23.3 million in principal and interest on a mortgage note due to NHI from CFA, $29.7 million in cash deposits and $14 million in advances from NHI’s revolving credit facility.


The new credit facility, which was provided by Regions Bank as agent and Pinnacle National Bank as a participating bank, bears interest at a margin of 250 basis points over LIBOR with a floor of 1% and matures in February 2011.

Justin Hutchens, NHI President and COO stated, “This new credit facility provides NHI the available capacity and flexibility to make additional high-quality real estate investments in 2010. Additionally, NHI will continue to review long term capital strategies for its new investments that will maximize returns to our shareholders.”