National Health Investors, Inc. (NYSE: NHI) announced it has closed the previously announced acquisition of eight senior housing communities in the South Atlantic region for $476 million.
All eight communities are leased to Senior Living Communities, LLC (SLC) and will continue to be managed by an SLC affiliate.
The deal is part of a broader transaction involving Health Care REIT (NYSE: HCN), which had announced in early December the sale of seven entrance-fee communities and one rental community. An HCN spokesperson previously confirmed that these properties represented the same properties NHI agreed to acquire, noting that HCN sold the portfolio to its operator, SLC, which then sold the portfolio to NHI.
In total, the eight properties tally 1,671 units, have an average of 12 years and average occupancy rate of 85.4% for the three months ended Oct. 31, 2014. Geographically, four of the communities are located in South Carolina, while two are in North Carolina, one in Florida and one in Georgia.
The 15-year master lease equates to an initial gross cash yield of 6.51% of the purchase price and has annual escalators of 4% in years two through four and annual escalators of 3% thereafter.
In connection with the acquisition, NHI will provide SLC a $15 million working capital line of credit. Borrowings will be used to finance construction projects within the SLC-leased portfolio, including building additional units at several of the communities.
Communities within the portfolio include the South Carolina properties of Brightwater (Myrtle Beach); Lakes at Litchfield (Pawley’s Island); Cascades Verdae (Greenville); and Summit Hills (Spartanburg).
Others include Homestead Hills (Winston-Salem, N.C.); Ridgecrest (Mt. Airy, N.C.); Marsh’s Edge (Saint Simons Island, Ga.); and Osprey Village (Amelia Island, Fla.).
Written by Emily Study