NHI to Acquire 10 Spring Arbor Communities for $121M in Largest Deal Since 2020

In its largest transaction in four years, National Health Investors (NYSE: NHI) has acquired a portfolio of communities in North Carolina for $121 million.

The portfolio of communities includes 10 assisted living and memory care communities totaling 522 units. The communities are on a 15-year master lease with two five-year renewal options built in.

Current operator Spring Arbor Management will continue to manage the communities after they change hands. All told, Spring Arbor Senior Living operates 37 assisted living and memory care communities in 10 states, primarily in the Southeast and Midwest.

Advertisement

Although the communities are located in North Carolina, they incurred “no material impact” from the recent Hurricane Helene, which blew through the eastern coast of the U.S. and caused widespread damage.

NHI funded the acquisition using its revolving credit facility.

Looking ahead, the Murfreesboro, Tennessee-based real estate investment trust (REIT) has an approximately $305 million pipeline of potential deals consisting primarily of senior housing operating (SHOP), sale-leaseback and loan opportunities. The pipeline excludes larger portfolio opportunities.

Advertisement

“The investment landscape continues to be very attractive to NHI and should be meaningfully accretive to growth as long as our cost of capital remains competitive,” NHI Vice President of Finance and Investor Relations Dana Hambly told SHN via email.

The company’s investment pipeline is “as active now as any time in recent, or even distant, memory,” Hambly added.

The $121 million acquisition of the 10-community portfolio for NHI coincides with the REIT having $35 million signed letters of intent for further investment.

“We are currently evaluating a pipeline of actionable opportunities valued at more than $300 million. The deals are across the senior housing [and skilled nursing] continuum with a greater focus on need-driven senior housing assets,” Hambly said.

Between 2022 and this year, NHI invested $380.7 million, according to an Oct. 10 business update.

This active investment pipeline follows NHI CEO Eric Mendelsohn saying the company’s investment pipeline would spur years of “exceptional growth” in the future during a recent earnings call.

“We are convinced that we’re in the early days of exceptional growth for several years to come,” Mendelsohn said during an Aug. 7 earnings call with investors and analysts.

NHI’s stock price fell 3.49% on Thursday to rest at $78.64 per share.

Companies featured in this article: