MURFREESBORO, Tenn.--(BUSINESS WIRE)--
National Health Investors, Inc. (NYSE:NHI) announced today that it has
signed a definitive agreement with an affiliate of Life Care Services
(“LCS”) to form a joint venture (“NHI-LCS JV”) to own and operate the
Timber Ridge at Talus (“Timber Ridge”) continuing care retirement
community (“CCRC”). NHI-LCS JV is acquiring Timber Ridge from a joint
venture between Westminster Capital and LCS for a purchase price of $133
million exclusive of closing costs which are estimated to be
approximately $2.0 million. Timber Ridge is a Type A CCRC in Issaquah,
WA and serves the greater Seattle area. The existing campus was
originally built in 2008 and an extensive expansion project was
completed in 2017 with financing provided by NHI. The community is over
95% occupied and has 401 units including 330 independent living
apartments, 14 assisted living apartments, 12 memory care apartments and
45 skilled nursing beds. NHI’s total investment in the NHI-LCS JV is
$125 million and will be partially funded with an $81 million first
mortgage from NHI representing approximately 60% of the cost. The timing
of the closing is contingent on finalizing transaction documents but is
expected to close on or around January 31, 2020.
Under the Agreement:
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The NHI-LCS JV has agreed to purchase Timber Ridge from the current
owner which is a joint venture between Westminster Capital and LCS.
The purchase price is $133 million which excludes $2.0 million in
estimated transaction costs;
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The NHI-LCS JV consists of two parts including a property company
(“PropCo”) and an operating company (“OpCo”). The OpCo will be
capitalized with $3.2 million initially;
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NHI will own an 80% ownership interest in PropCo and LCS will own a
20% ownership interest;
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NHI will own a 25% ownership interest in OpCo and LCS will own a 75%
ownership interest;
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NHI is contributing $43.2 million to PropCo and $800,000 to OpCo for
working capital. NHI has also agreed to provide financing to PropCo in
an amount equal to 60% of the purchase price, or $81 million, at an
interest rate of 5.75%. This financing includes the $60 million note
NHI originally funded in 2015;
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LCS is contributing $10.8 million to PropCo and $2.4 million to OpCo
for working capital;
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PropCo will lease the community to OpCo under a triple net lease with
an initial cash yield of 6.75%. The lease has a 7-year initial term
with two 5-year renewal options. The escalators will be CPI-based with
a floor of 1.75% and a ceiling of 2.25%;
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NHI is providing a $5 million line of credit to OpCo for working
capital needs.
NHI President and CEO Eric Mendelsohn stated, “I’m thrilled to announce
this joint venture with LCS, which is highly regarded as one of the
premier operators of CCRC properties in the country. Timber Ridge is a
first class community in a high barrier to entry market in the Pacific
Northwest and an excellent fit to the growing NHI portfolio.”
About LCS
LCS is the nation’s second largest senior living operator and a leading
provider of high-quality senior lifestyle products and services, serving
thousands of seniors across the nation. Committed to service, the LCS
Family of Companies focuses on development, operations management,
marketing and sales management, and strategic planning for Continuing
Care/Life Plan and rental communities, rental independent living,
assisted living, and memory care communities nationwide. Based in Des
Moines, Iowa, the LCS Family of Companies provides a full-service real
estate private equity enterprise, insurance, national purchasing
consulting services and in-home care. In the field of senior living,
Experience is Everything. For more information, visit LCSnet.com.
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.
About Westminster Capital
Westminster Capital manages real estate investment strategies on behalf
of private wealth capital through commercial property investments across
the United States in Industrial/Distribution, Apartments, Medical Office
and Senior Living properties. Founded in 1988, the firm is headquartered
in Lake Forest, Illinois. www.WestminsterCapitalllc.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 limitations and a breach of those covenants could
materially adversely affect our financial condition and results of
operations; 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: https://www.businesswire.com/news/home/20200107005307/en/
Dana Hambly
Director, Investor Relations
Phone: (615)
890-9100
Source: National Health Investors, Inc.