After raising $175 million through a senior notes offering earlier this month, National Health Investors Inc. (NYSE: NHI) announced it will acquire four Prestige Senior Living properties for $42 million.
Through a sale-leaseback transaction, NHI will purchase the four properties from Vancouver, Wash.-based Prestige comprising one assisted living community in Idaho and three skilled nursing facilities in Oregon.
Under the agreement, Prestige will lease the communities for a 15-year term with renewal options at an initial lease rate of 8.4% plus fixed annual escalators.
NHI utilized its revolving credit facility to fund the purchase.
“I’m excited for NHI to start this relationship with Prestige Senior Living given their attractive track record operating for over twenty-five years,” said NHI President and CEO Justin Hutchens.
Included in the purchase price is $2 million for capital improvement projects for two of the Oregon communities. NHI has also agreed to fund an earn out up to $6.4 million upon Prestige performance results on given dates in 2014 and 2015, bringing the total potential investment to $48.4 million.
NHI has been active in the senior care market of late. Last year the company closed the acquisition of 25 Holiday Retirement properties for $491 million. Previously, NHI formed a joint venture with Bickford Senior Living that included the $135 million acquisition of 17 senior housing communities.
Written by Elizabeth Ecker