National Health Investors, Inc. (NYSE:NHI) announced that it will acquire an entrance-fee continuing care retirement community ("CCRC"), in North Branford, Connecticut, Friday.
The community will be leased to NHI's current tenant, Senior Living Communities ("SLC"), headquartered in Charlotte, North Carolina. NHI's total investment, including acquisition of the facility and other costs, will be $74 million, and the lease term will be 13 years at a lease rate of 6.77% with a 4% annual escalator on January 1, 2017 and 2018 and a 3% annual escalator thereafter. The investment, planned for closing in mid-November 2016, will be funded with a draw on NHI's revolving credit facility.
The CCRC consists of 227 independent living units, 22 assisted living/memory care units and 50 skilled nursing units. This community will be the ninth leased by NHI to SLC.
"We are excited to have this opportunity to add another high-quality CCRC to our portfolio under the management of our experienced and well-respected tenant, Senior Living Communities." Eric Mendelsohn, NHI's President and CEO, stated.
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.
It has a feature of Mezzanine financing. A hybrid of debt and equity financing typically used to finance the expansion of existing companies. Mezzanine financing is debt capital that gives the lender the rights to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. It is generally subordinated to debt provided by senior lenders such as banks and venture capital companies.
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