NHI Given Exclusive Rights to Bickford’s Growth Pipeline
MURFREESBORO, Tenn.--(BUSINESS WIRE)--
National
Health Investors, Inc. (NYSE:NHI) announced today an agreement with Bickford
Senior Living (“Bickford”) to combine their ownership in the real
estate and operating assets of 10 stabilized assisted living and memory
care facilities. Under the arrangement which is expected to close by
September 30, 2012, NHI will contribute eight properties and Bickford
will contribute two, with NHI owning an 85 percent interest and Bickford
owning the remaining 15 percent. Bickford will continue to manage the
facilities. Wells
Fargo Securities, LLC served as financial advisor to NHI on this
transaction.
“This investment is substantially accretive from day one,” said Justin
Hutchens, NHI’s President and Chief Executive Officer. “There is
inherent appeal in the solid initial cap-rate of 9% and in this
portfolio’s potential to outpace the growth of our typical triple-net
lease structure. Bickford Senior Living is a premier operator with
twenty years of operating experience.”
Mike Eby, Bickford’s President stated, “Our alliance with NHI ensures
our relationship with a strong capital partner who truly values the
quality of care we provide to our residents and who is committed to our
long-term growth plans for the company.”
NHI structured the transaction to be compliant with the provisions of
the REIT Investment Diversification and Empowerment Act of 2007 (RIDEA)
which permits NHI to receive rent payments through a triple-net lease
between the property company and operating company, and will give NHI
the opportunity to capture additional value on the improving performance
of the operating company through distributions to a Taxable REIT
Subsidiary (TRS).
NHI will have the exclusive right to finance and include all future
acquisitions and development projects by Bickford into the new business
structure. This includes up to eight previously disclosed projects of
which three are underway.
Key Transaction Highlights:
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The transaction is accretive to NHI’s normalized FFO by $0.02 per
diluted, common share for the remainder of 2012 and a minimum of $0.08
per diluted, common share in 2013
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The business structure is comprised of: 10 facilities, 488 units, 88%
occupancy and an average age of five years, plus current development
of three, 60-unit facilities
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Facility ownership: two properties contributed by Bickford and eight
properties contributed by NHI
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Locations: Illinois, Indiana, Iowa, Kansas and Michigan
The cash invested by NHI at the transaction closing is $22.5 million and
will be drawn on NHI’s revolving credit facility. NHI purchased from
Bickford for $36.7 million in 2009 and 2010 the eight facilities being
contributed by NHI to the new business structure. There is $19.3 million
of secured debt being assumed with an annual interest rate fixed at 4.5%
and maturing in November 2013. The 10 stabilized facilities comprising
the new business structure have 2012 annualized net operating income
(NOI) of $8.0 million after a 5% management fee to the operator and $500
per unit of capital expenditures.
In Year 1, NHI expects to receive $6.8 million, of which $5.9 million is
a guaranteed minimum lease payment. The lease is for an initial period
of five years, plus renewal options, with an annual lease escalator of
3%. NHI’s current cash flow from the eight facilities to be contributed
is $3.6 million.
About National Health Investors
National Health Investors, Inc. is a healthcare real estate investment
trust that specializes in the financing of healthcare real estate by
purchase and leaseback transactions and by mortgage loans. NHI’s
investments involve skilled nursing facilities, assisted living
facilities, senior living campuses, independent living facilities,
medical office buildings and hospitals. The common stock of the company
trades on the New York Stock Exchange with the symbol NHI. Additional
information about NHI, including its most recent press releases, may be
obtained on NHI’s web site at www.nhireit.com.
About Bickford Senior Living
Bickford Senior Living, founded in 1991, is headquartered in Olathe,
Kansas and operates over 45 assisted living, memory care and independent
living facilities in Kansas, Iowa, Illinois, Indiana, Missouri, Georgia,
Nebraska and Michigan and has experience in constructing over 150 of
these types of facilities for various owners.
Safe Harbor Statement
Statements in this press release that are not historical facts are
forward-looking statements. NHI cautions investors that any
forward-looking statements may involve risks and uncertainties and are
not guarantees of future performance. All forward-looking statements
represent NHI’s judgment as of the date of this release.Investors
are urged to carefully review and consider the various disclosures made
by NHI in its periodic reports filed with the Securities and Exchange
Commission, including the risk factors and other information disclosed
in NHI’s Annual Report on Form 10-K for the most recently ended fiscal
year. Copies of these filings are available at no cost on the SEC’s web
site at http://www.sec.gov
or on NHI’s web site at http://www.nhireit.com.
National Health Investors, Inc.
Roger R. Hopkins, Chief Accounting
Officer, 615-890-9100
Source: National Health Investors, Inc.