National HealthInvestors Inc. purchased eight Texas skilled nursing facilities for$118.5 million and signed a new 15-year master lease on the properties, and others,with affiliates of The Ensign Group, the company said in an April 6 news release.
The purchased properties, which have a total of 931 beds, arecurrently operated by Legend Healthcare, National Health Investors' existing tenant.
Legend has elected to transition all of its current operationsto a new operator, and National Health Investors has agreed to enter into a new15-year master lease with affiliates of Ensign on 15 former Legend facilities foran initial annual amount of $17.8 million, plus an annual escalator based on inflation,the company said.
The lease has two five-year renewal options. Upon entering thenew lease, which is expected to close May 1 and will include a corporate guarantyfrom Ensign, National Health Investors will sell two of its existing facilitiesin Texas, totaling 245 beds, to affiliates of Ensign for $24.6 million. Purchaseoptions held by Legend will terminate when National Health Investors and Ensignenter the new lease.
The net acquisitions and dispositions bring the REIT's net investmentin the 15 facilities to roughly $211 million.
As part of the transaction, National Health Investors has committedto purchase four skilled nursing facilities in Texas from Legend for $56 millionand lease them to Ensign. The facilities are in various stages of development andthe purchase window for the first facility is expected to open in 2017.