NHI Joins Chorus of Senior Housing Organizations Eyeing Joint Ventures

Like some of its peers in the senior housing space, National Health Investors (NYSE: NHI) no longer wants its tenants to “just use [it] as a checkbook,” according to President and CEO Eric Mendelsohn.

Rather than triple-net, the Murfreesboro, Tennessee-based real estate investment trust (REIT) is currently looking out for RIDEA and joint venture opportunities, Mendelsohn told investors and analysts during a call on Tuesday. Fellow health care REIT Welltower, Inc. (NYSE: WELL) and senior housing operator Capital Senior Living (NYSE: CSU) have expressed a similar distaste for triple-net leases; Welltower recently converted its communities managed by Brandywine Living from triple-net leases to RIDEA, and Capital Senior Living is presently engaging in “constructive dialogue” with its REIT landlords about the potential of RIDEA ventures.

Still, joint ventures are “very labor intensive” for REITs, and NHI is only willing to enter into ventures that have some scale.


“The deals would need to be big enough to warrant the extra overhead and brain damage,” Mendelsohn explained.

NHI’s second-quarter 2018 revenue of $72.96 million, reported Tuesday, missed analysts’ expectations by $0.74 million. Its second-quarter earnings per share of $1.38, however, was in line with analysts’ expectations.

“We know it’s a tough environment in the senior housing space right now, [but] we continue to view these conditions as an opportunity,” Mendelsohn said.


In terms of acquisitions, NHI is keeping active.

“We’re as busy as we’ve ever been,” Mendelsohn said. “It’s an interesting environment out there. We’re seeing a lot of distressed stuff, which isn’t really our cup of tea. But we’re also seeing stabilized [assets] come to market.”

NHI is currently one of the largest senior housing owners in the country, with 149 communities in more than 30 states.

Recommended SHN+ Exclusives

As of market close on Tuesday, NHI’s share price had risen 2.24% to $78.01.

Written by Mary Kate Nelson

Companies featured in this article:

, , ,