National Health Investors has deepened its relationship with a Kansas-based nursing home operator by setting up an entity that will house 10 properties owned by the two companies.
Murfreesboro-based NHI will contribute eight properties to the portfolio and has the exclusive right to finance future acquisitions and construction projects — including three under-construction homes with 60 beds each — that Bickford Senior Living will bring to the table. As of today, the 10 Midwest facilities in the JV comprise 488 beds and are 88 percent occupied.
“This investment is substantially accretive from day one,” said Justin Hutchens, NHI's president and CEO. “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.”
NHI is investing $22.5 million in the venture, which produces an annualized net operating income of $8 million. NHI officials said they expect to receive $6.8 million in lease and interest payments from the properties in the coming year.
NHI and Bickford first worked together in 2009, when the former bought five of the properties it is now putting into the JV. A year later, NHI acquired the other three. Early this year, the companies announced they had teamed up to build eight nursing homes over the next three years.
Shares of NHI (Ticker: NHI) closed Wednesday trading at $52.56, down slightly on the day. Year to date, they're up about 20 percent.