NHI Continues to Defer Bickford Rent, Occupancy Decreases Marginal

National Health Investors’ (NYSE: NHI) deferred rent total from Bickford Senior Living continues to grow.

NHI announced on Thursday it agreed to defer up to $5 million in April and May rent due from Bickford, which operates 47 communities for the Murfreesboro, Tennessee-based health care real estate investment trust (REIT).

Previously, NHI deferred $5.85 million in rent from Bickford for the full calendar year 2020, and $3.75 million in the first quarter of 2021 — including $3 million last month.

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All deferred rents bear interest at 8% and are expected to be repaid over an 18-month period, starting October 1.

NHI collected 83.5% of its contractual rent due this month, through April 15. The Bickford deferrals account for 11% of the outstanding rents. The balance consists of 1.8% in deferrals related to two other tenants, and 0.5% related to lower forecasted revenue from transitioned properties prior to the start of the pandemic.

Olathe, Kansas-based Bickford, which accounts for 15% of NHI’s annualized cash revenue has battled operational pressures and occupancy declines for over a year, stemming from Covid-19.

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Occupancy across NHI’s communities operated by Bickford fell to 74.8% in March. While that marks a nearly 10% fall from the previous year, the pace of occupancy decline slowed. Occupancy fell only 20 basis points from February 2021 to March 2021, compared to 60 basis points from January 2021 to February 2021. 

NHI’s other major operating partners also reported steady paces of occupancy decline. Holiday Retirement, which operates 26 communities, reported a 10 basis point decrease in occupancy in March, to 73.5%. Senior Living Communities, which manages eight properties, saw its occupancy rate fall 30 basis points to 77.8% in March.

NHI CEO Eric Mendelsohn is optimistic that positive trends in sales, vaccination rates, and a substantial decrease in positive Covid-19 cases across its blended portfolio of 162 senior housing and 75 skilled nursing facilities will lay the foundation for a rebound in occupancy and net operating income, but improvement will not be immediate, he said during a recent SHN+ TALKS conversation.

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Mendelsohn believes that it could take the industry anywhere from 18 to 36 months to return to pre-pandemic levels in occupancy and NOI, because the circumstances are different from the 2009-2011 economic downturn.

“This recession was a health care recession. You had a recession caused by a viral pandemic that directly affected residents in our buildings,” he said.

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