NHI Spends $476M on Senior Housing

MEMPHIS—National Health Investors (NHI) is getting ready to spend $476 million to acquire eight senior housing communities. The firm is expected to close on the Senior Living Communities Portfolio by the end of the year.

“NHI's agreement to acquire a portfolio that includes high-end communities strengthens our portfolio by further diversifying our sources of rental income by operator, geography, property type and payor source while significantly reducing our exposure to government reimbursement,” says Justin Hutchens, president and CEO of NHI. “This acquisition is consistent with our conservatively funded growth strategy including partnering with experienced senior housing operators and portfolio diversification.”

After the ink dries on the mega transaction, NHI will lease the eight senior housing communities to Senior Living Communities, LLC on a 15-year master lease. The lease equates to an initial gross cash yield of 6.51% of the purchase price and has annual escalators of 4% in years two through four and annual escalators thereafter of 3%. An affiliate of Senior Living Communities will manage the senior housing assets.

NHI plans to provide a $15 million working capital line of credit to Senior Living Communities in connection with the senior housing acquisition. The funding will be used to finance construction projects within the senior housing portfolio, including building more units at some of the communities.

This isn't the first mega acquisition NHI has completed on the senior housing front this year. In November, the firm snapped up a 25-asset seniors portfolio for $491 million. The firm also sold and acquired additional skilled nursing facilities as part of a $23.3 million court settlement agreement in September and earlier this year set out to build eight assisted living facilities.