MURFREESBORO, Tenn.--(BUSINESS WIRE)--
National Health Investors, Inc. (NYSE:NHI) announced today it has signed
a definitive agreement with its joint venture partner, an affiliate of
Bickford Senior Living (“Bickford”), headquartered in Olathe, Kansas, to
convert NHI’s RIDEA portfolio of 32 assisted living and memory care
assets to a triple-net lease structure. Key terms in the new agreement
between NHI and Bickford are as follows:
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NHI purchased Bickford’s 15% interest in the real estate for $25.1
million;
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Bickford purchased NHI’s 85% interest in the facilities’ operations
for $8.1 million;
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2016 base cash rent of $25.3 million on the 32 stabilized facilities
is unchanged based on NHI’s investment-to-date of approximately $298
million, of which NHI will now receive 100%;
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There are 5 additional facilities under development owned by NHI; one
opened in July, two are planned to open by the end of 2016, and two
are planned to open in 2017. Funded amounts will be added to the lease
basis during construction and up to the first six months after
opening; thereafter, base rent will be charged to Bickford at a 9%
annual rate. Once the facilities are stabilized, rent will be reset to
fair market value;
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Base rent on all leases will continue to escalate by 3% annually on
the anniversary date of the lease;
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Future development projects between the parties will be funded through
a construction loan at 9% annual interest and NHI will receive a
favorable purchase option at stabilization and rent will be set at
fair market value with a floor of 9.55% on NHI’s total investment; and
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On current and future development projects, Bickford as the operator
will be entitled to incentive payments based on the achievement of
predetermined operational milestones, the funding of which will
increase the investment on which the lease payment to NHI is
calculated.
The new agreement does not change the terms previously disclosed of the
15-year triple-net lease entered into between the parties for 5 assisted
living and memory care facilities not placed into the joint venture and
acquired by NHI pursuant to a purchase option with Bickford in May 2016.
On October 4, 2016, NHI filed a Form 8-K with the Securities and
Exchange Commission with exhibits containing pro forma financial
statements and disclosures to assist investors.
NHI’s President and CEO, Eric Mendelsohn, stated, “The relationship with
our valued operator, Bickford, has been very successful, beginning with
our purchase of 5 facilities in 2009 to a current total of 37 stabilized
facilities with more projects in the development pipeline. In financial
terms, this transaction is very accretive to NHI and locks in a stream
of predictable cash flows for our shareholders. Bickford emerges as a
stronger company with better credit by paying off certain of its legacy
debt to third parties and has the strong incentive to continue to drive
operating cash flow at each of the facilities in our lease.”
About NHI
Incorporated in 1991, National Health Investors, Inc. (NYSE: NHI) is a
real estate investment trust specializing in sale-leaseback,
joint-venture, mortgage and mezzanine financing of need-driven and
discretionary senior housing and medical investments. NHI’s portfolio
consists of independent, assisted and memory care communities,
entrance-fee retirement communities, skilled nursing facilities, medical
office buildings and specialty hospitals. For more information, visit www.nhireit.com.
This press release includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.All
statements regarding the Company’s, tenants’, operators’, borrowers’ or
managers’ expected future financial position, results of operations,
cash flows, funds from operations, dividend and dividend plans,
financing opportunities and plans, capital market transactions, business
strategy, budgets, projected costs, operating metrics, capital
expenditures, competitive positions, acquisitions, investment
opportunities, dispositions, acquisition integration, growth
opportunities, expected lease income, continued qualification as a real
estate investment trust (“REIT”), plans and objectives of management for
future operations, continued performance improvements, ability to
service and refinance our debt obligations, ability to finance growth
opportunities, and similar statements including, without limitation,
those containing words such as “may,” “will,” “believes,” “anticipates,”
“expects,” “intends,” “estimates,” “plans,” and other similar
expressions are forward-looking statements.Forward-looking
statements involve known and unknown risks and uncertainties that may
cause our actual results in future periods to differ materially from
those projected or contemplated in the forward-looking statements. Such
risks and uncertainties include, among other things; the operating
success of our tenants and borrowers for collection of our lease and
interest income; the success of property development and construction
activities, which may fail to achieve the operating results we expect;
the risk that our tenants and borrowers may become subject to bankruptcy
or insolvency proceedings; risks related to governmental regulations and
payors, principally Medicare and Medicaid, and the effect that lower
reimbursement rates would have on our tenants’ and borrowers’ business;
the risk that the cash flows of our tenants and borrowers would be
adversely affected by increased liability claims and liability insurance
costs; risks related to environmental laws and the costs associated with
liabilities related to hazardous substances; the risk that we may not be
fully indemnified by our lessees and borrowers against future
litigation; the success of our future acquisitions and investments; our
ability to reinvest cash in real estate investments in a timely manner
and on acceptable terms; the potential need to incur more debt in the
future, which may not be available on terms acceptable to us; our
ability to meet covenants related to our indebtedness which impose
certain operational; the risk that the illiquidity of real estate
investments could impede our ability to respond to adverse changes in
the performance of our properties; risks associated with our investments
in unconsolidated entities, including our lack of sole decision-making
authority and our reliance on the financial condition of other
interests; our dependence on revenues derived mainly from fixed rate
investments in real estate assets, while a portion of our debt bears
interest at variable rates; the risk that our assets may be subject to
impairment charges; and our dependence on the ability to continue to
qualify for taxation as a real estate investment trust. Many of these
factors are beyond the control of the Company and its management.The
Company assumes no obligation to update any of the foregoing or any
other forward looking statements, except as required by law, and these
statements speak only as of the date on which they are made.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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20161004006579/en/
National Health Investors, Inc.
Roger R. Hopkins, 615-890-9100
Chief
Accounting Officer
Source: National Health Investors, Inc.