NHP Arranges Possible $300M in Acquisitions

The agreement in principle with PMP calls for Nationwide to acquire three medical office buildings, the remaining 55% interest in two medical office buildings in which it now has a minority ownership interest, and majority ownership interests in two joint ventures that will each own one medical office building. A majority of the REIT's investment is expected to consist of the assumption of existing mortgage debt of approximately $160 million to $170 million with a weighted average interest rate of less than 6%. NHP estimates that the properties would contribute annual net operating income of approximately $21 million to $23 million initially, but those figures and other estimates connected with the deal are subject to uncertainties that could cause the actual outcomes to differ substantially, the company said.

The deal with PMB was reported in Nationwide public filings and its quarterly conference call, in which the company said that it has continued on its path of "preparing itself for capital markets under duress while simultaneously positioning itself for growth" through investments. NHP reported net income of $29.7 million and 27 cents a share for the third quarter ended Sept. 30 compared with $27.1 million and the same per-share figure for the third quarter last year; the company recorded FFO of $63.3 million and 56 cents per share against $58.4 million and 56 cents per share in the third quarter last year.

Douglas M. Pasquale, NHP's chairman and CEO, noted that the REIT "continued to enhance our already strong financial position by issuing $190 million of equity," and that the company has about $300 million of cash as well as the full capacity of its $700 million credit line.