Nationwide Health Signs $171M Sale-Leaseback

NEWPORT BEACH, CA-Nationwide Health Properties Inc. has agreed to buy 13 skilled nursing homes and one assisted living facility in Massachusetts and New York from Senior Residential Care and Wingate Healthcare for $171 million in a triple-net leaseback. Nationwide, a health care properties REIT, says the purchase price works out to an average of $92,000 per bed. Donald Bradley, chief investment officer for nationwide, calls the properties "the largest portfolio of high quality, class A, skilled nursing facilities in New England." In addition to the purchase deal, Nationwide says it has committed $20 million for improvements, upgrades and expansions to Wingate's facilities over next two years, plus $50 million dedicated to Wingate's acquisition of additional health care facilities. Acquiring the New England portfolio "substantially" upgrades Nationwide's overall investment portfolio and increase its funds from operations, Bradley added. He said Nationwide senior investment officer Steven Insoft identified the assets as good acquisition targets that have been developed and are operated by Wingate's principals, the father and son team of Gerry and Scott Schuster. Insoft adds that the Schusters, beginning in the mid-1980's, focused on developing and operating state-of-the-art skilled nursing facilities in Massachusetts and New York. Hence, most of the properties that Nationwide is acquiring are relatively new, are located in higher income communities and were built to standards that resemble those of high-end assisted living facilities rather than standard nursing home construction. Scott Schuster, Wingate's president, says the deal provides his company with a well financed capital partner and sets the stage for Wingate's continued expansion. The transaction is expected to close in December, subject to customary closing conditions and lender approvals. As part of the deal, NHP will assume about $100 million of secured debt at a 7% blended rate. The REIT says it plans to repay $43 million of the debt without penalty in 2006 and $26 million in 2007. UBS Investment Bank acted as exclusive financial advisor to Wingate.The properties that Nationwide is acquiring include the Wingate at Sudbury, the Wingate at Brighton, the Wingate at Duchess, the Wingate at Needham and other similarly branded facilities. Nationwide, which specializes in senior housing and long-term care properties, has investments in 425 facilities in 39 states.