National Health Investors, Inc. (
recently acquired Charleston House - an assisted living and
memory care facility - for $20.2 million. The move is in line
with the company's aim of enhancing its private-pay assisted
living portfolio through deals with skilled operators.
The 120-unit Charleston House is based in Beaver Dam in
Wisconsin. National Health Investors planned to lease the
property to Landmark Senior Living Communities at a rate of
7.75%, including an annual fixed increment. The initial lease
term will be of 15 years with renewal options.
Landmark Senior Living has been offering the senior citizen with
Alzheimer's care, dementia care, licensed assisted living and
respite care options since 15 years. The company has its
properties in four locations of Massachusetts - Boston, Beverly,
Fall River and Spring Field.
On a separate development, National Health Investors announced
the sale of its Edison, New Jersey-based senior living facility
for $23 million. The 148-bed campus was sold to the existing
tenant of the property -
Sunrise Senior Living Inc. (
- through a purchase-option agreement between the parties.
In addition, National Health Investors extended the master lease
with a fellow Murfreesboro-based company,
National HealthCare Corp.
, through 2026. The lease extension deal is for 38 skilled
nursing and 3 independent living facilities.
Subsequently, National Health Investors sold six skilled
healthcare facilities, comprising 650 beds, from the existing
portfolio to National HealthCare. The portfolio, which includes
four facilities in Tennessee and one each in Georgia and
Kentucky, has been occupied by National HealthCare since 1991.
The transaction is expected to close on December 31, 2013.
National Health Investors generated per year annual rent revenue
of $33.7 million from National HealthCare, as well as an
additional percentage of revenue increase over a base year.
However, considering the sale deal, National HealthCare's annual
base rent will drop by $2.95 million effective January, 2014.
With the lease expansion and sale agreement, National Health
Investors has strengthened its relationship with National
HealthCare, a premium long-term healthcare centers and home
healthcare programs operator with expertise of over 40 years. The
deals are a strategic fit and aimed at creating an efficient
portfolio through realignments which would lessen the company's
concentration risk as well as generate better returns.
Lately, National Health Investors has been very active on
portfolio restructuring activity. Accordingly, the company
recently penned a purchase and leaseback agreement worth $9
million with Washington-based Milestone Retirement Communities
National Health Investors, a real estate investment trust (REIT),
specializes in financing healthcare real estate through purchase
and leaseback transactions and mortgage loans. The company's
investments involve skilled nursing facilities, assisted living
facilities, independent living facilities, medical office
buildings and hospitals.
National Health Investors is expected to release its
fourth-quarter 2012 results on February 11, 2013. The Zacks
Consensus Estimate for fourth quarter FFO (fund from operations)
is currently pegged at 82 cents per share.
Further, the company currently has a Zacks #2 Rank (implying a
short-term Buy rating). We also maintain our long-term 'Neutral'
recommendation on the stock.
Note: FFO, a widely accepted and reported measure of the
performance of REITs is derived by adding depreciation,
amortization and other non-cash expenses to net income.
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