National Health Investors is acquiring a portfolio of 10 assisted living and memory care communities in North Carolina for $121.3 million in what the real estate investment trust says is its largest deal since 2020, the year the COVID-19 pandemic started.

The Murfreesboro, TN, REIT announced the transaction Thursday morning in a business update.

The properties, which have a combined 522 units, will continue to be managed by Spring Arbor. NHI says that the portfolio bears “no material impact” from Hurricane Helene.

The REIT said it funded the acquisition entirely from its revolving credit facility. The stated purchase price includes transaction costs. The initial cash yield is 8.23%.

The related 15-year master lease has two 5-year renewal options. There are annual fixed escalators of 2%.

The communities:

  • Spring Arbor of Albemarle, with 45 units
  • Spring Arbor of Apex, 41 units
  • Spring Arbor of Cary, 68 units
  • Spring Arbor of Greensboro, 74 units
  • Spring Arbor of Greenville, 42 units
  • Spring Arbor of Kinston, 44 units
  • Spring Arbor of Outer Banks, 69 units
  • Spring Arbor of Rocky Mount, 52 units
  • Spring Arbor of Wilmington, 42 units
  • Spring Arbor of Wilson, 45 units

$305 million pipeline 

NHI said that it has closed on a total of $205.6 million investments year to date, with an average initial yield of 8.4%. The investments include a $32.1 million lease with an existing tenant, funded partially by the satisfaction of a $22.2 million construction loan, and $52.2 million in mortgage and construction loans, all of which include an NHI purchase option.

The REIT put its investment pipeline at approximately $305 million, including “a mix of [senior housing operating portfolio], sale leaseback and loan opportunities, primarily in senior housing” and excluding “multiple larger portfolio opportunities.”

Senior Living Management communities transferred

NHI also reported that the operations of four properties leased by Senior Living Management, a cash basis accounting tenant, have been transitioned to other operators. One of the properties previously was classified as held for sale and is expected to be sold in the fourth quarter, according to the REIT.

SLM reportedly was current on its obligations for the six months ended June 30 but in late September informed NHI that ongoing liquidity constraints raised doubts about its ability to sustain operations and pay rent and interest obligations due to NHI beginning in September.  

Helene, Milton update

NHI also provided an update related to the hurricanes, indicating that the operators in its portfolio had reported “no material disruptions” due to Hurricane Helene.

Residents and patients at four skilled nursing facilities in Florida were evacuated in advance of Hurricane Milton’s landfall.