According to a accompany statement, the master leaseback includes an 8.7% effective rent yield; up to 2% CPI-based annual rent escalators; and exclusive rights on $150 million of potential new investments. In addition, Hearthstone president and CEO Tim Hekker and partners will acquire 100% ownership of the company that will operate the Hearthstone facilities. Hearthstone's principal selling shareholders include Fremont Realty Capital, funds advised by Apax Partners, LP and Kosberg & Associates.
NHP has also agreed to finance $15 million of Hearthstone's future facility expansions at lease rates current at that time.
"We have continually reiterated our belief in both the short and long-term growth potential of the senior housing sector," says Donald D. Bradley, NHP's chief investment officer. "Given the quality of the assets we are acquiring--all of which were built by Hearthstone starting in 1996--the strength of the operating team, Hearthstone's financial condition and the structure of the transaction, this investment represents a significant opportunity for the company."
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John Salustri
John Salustri has covered the commercial real estate industry for nearly 25 years. He was the founding editor of GlobeSt.com, and is a four-time recipient of the Excellence in Journalism award from the National Association of Real Estate Editors.
