National Health Investors, Inc. (NYSE:NHI) announced Monday a purchase and lease transaction of four skilled nursing facilities in Texas for a purchase price of $49.8 million. The facilities have an average age of two years and 498 beds, and are operated by affiliates of Legend Healthcare.
NHI, a Murfreesboro, Tenn.-based healthcare real estate investment trust (REIT), funded the transaction with available cash and borrowings on its revolving credit facility.
“We are acquiring new, well-located properties while expanding our relationship with Legend Healthcare, an established and reputable private regional operator with a very strong credit history with NHI,” said Justin Hutchens, NHI president and CEO. “We continue to successfully execute our selective growth plan resulting in investment volume of over $100 million during the past year and over $300 million over the past couple of years.”
Legend, a San Antonio, Texas-based healthcare operator, is a current tenant of NHI and specializes in operation of transitional care and skilled nursing facilities. Under the current transaction, Legend is eligible for an additional payment of $5.5 million if it attains certain performance metrics over the next two years. The company is leasing the four facilities over 15 years at an initial lease rate of 9% on NHI’s invested amount plus annual escalators, with the option to purchase after seven years, according to NHI. NHI has an option to purchase and leaseback a fifth facility with similar terms.
NHI specializes in healthcare real estate financing by purchase and leaseback transactions and by mortgage loans. Its investments include skilled nursing facilities, assisted living, independent living and hospitals based on both acute and rehabilitative care.
Written by Elizabeth Ecker