MURFREESBORO, TN / ACCESSWIRE / January 10, 2022 / National Health Investors, Inc. (NYSE:NHI) today provided a business update regarding recent portfolio activity, litigation related to the legacy Holiday Retirement ("Holiday"), monthly deferral and contractual cash collections, and average occupancy from its three largest senior housing operators through November 2021.
Portfolio Activity
In December 2021, NHI disposed of three senior living properties. NHI closed on the sale of one property in Marysville, OH consisting of 76 units for gross proceeds of approximately $12.0 million and received an additional $3.6 million for a lease termination fee. Annualized rental income, excluding the impact of any straight-line rents, for the three months prior to the disposition was approximately $1.4 million. The adjusted annualized NOI yield assuming a 5% management fee and recurring capex for this property was approximately 2.5% with EBITDARM coverage of approximately 0.36x.
NHI also closed on the sale of one property in Maitland, FL consisting of 98 units for gross proceeds of approximately $7.8 million. Annualized rental income, excluding the impact of any straight-line rents, for the three months prior to the disposition was approximately $0.7 million. The adjusted annualized NOI yield assuming a 5% management fee and recurring capex for this property was approximately (5.7)% with EBITDARM coverage of approximately (0.40)x.
Lastly, NHI closed on the sale of one property in Nampa, ID consisting of 180 units formerly leased to Genesis Healthcare, Inc. for gross proceeds of approximately $3.9 million. Annualized rental income, excluding the impact of any straight-line rents, for the three months prior to the disposition was approximately $0.9 million. The adjusted annualized NOI yield assuming a 4% management fee for this property was approximately (13.8)% with EBITDARM coverage of approximately (0.41)x.
In 2021, NHI announced dispositions of approximately $240.0 million including 19 senior housing properties consisting of 1,762 units for approximately $195.0 million. The senior housing dispositions had annualized rental income, excluding the impact of any straight-line rents, of approximately $19.3 million. The adjusted annualized NOI yield assuming a 5% management fee and recurring capex for these properties was approximately 2.5% with EBITDARM coverage of approximately 0.51x.
In January 2022, NHI transferred the operations of a skilled nursing facility located in Avondale, AZ from
Genesis Healthcare, Inc. to a subsidiary of The Ensign Group, Inc. (NASDAQ: ENSG). The property was added to NHI's existing master lease which expands the relationship to 20 properties and extends the lease maturity by five years.
Litigation Update Related to Legacy Holiday Properties
As previously announced in December 2021, NHI and certain subsidiaries filed suit against Welltower and certain of its subsidiaries in the Delaware Court of Chancery. For more information, please see NHI's press release dated December 27, 2021.
In January 2022, NHI exercised its rights under the Membership Pledge and Security Agreement between NHI and Welltower Victory II TRS, LLC (the "Pledgor") dated July 30, 2021 (the "Pledge Agreement") to vest in NHI as the landlord all Pledgor's voting and other consensual rights over Well Churchill Leasehold Owner, LLC (the "Tenant") during the continuance of Tenant's Event of Default. NHI subsequently filed a motion in the Delaware Court of Chancery to expedite NHI's claims to enforce its rights under the Pledge Agreement. NHI is seeking to expeditiously advance the transition of the remaining Holiday properties to new operators with as little disruption to residents as possible.
Tenant Lease Amendment
In December 2021, NHI agreed to a lease amendment with a senior housing operator. The lease amendment includes $2.5 million in rent deferral and $2.5 million in rent abatement in the first twelve months (effective November 1, 2021). The lease amendment also includes an additional $2.0 million in rent deferral and $2.0 million in rent abatement in the ensuing twelve months beginning November 1, 2022. After this 24-month period, the lease is to be reset to the greater of (i) a specified yield on NHI's original total investment and (ii) a specified lease coverage ratio.
Deferral Update
NHI agreed to defer $1.0 million in rent due for December from Bickford Senior Living ("Bickford"). NHI agreed to defer approximately $1.4 million in rent for six other tenants in December which is expected to be repaid with interest.
As previously disclosed, NHI has agreed with Bickford to defer $4.5 million in contractual rent due for the fourth quarter of 2021 and expects to defer up to $4.0 million in the first quarter of 2022.
Collections
NHI collected 79.4% of contractual cash due for December. The remaining balance for the month is comprised of the following: 1.8% in outstanding rent NHI expects to collect; 4.0% in deferrals related to Bickford; 5.5% in deferrals agreed to with six other tenants; 8.7% in unpaid rent related to the legacy Holiday properties; and 0.6% related to lower forecasted revenue from transitioned properties prior to the start of the pandemic.
For the fourth quarter, NHI collected 81.1% of contractual cash due. The remaining balance for the quarter is comprised of the following: 0.7% in outstanding rent NHI expects to collect; 5.9% in deferrals related to Bickford; 3.2% in deferrals agreed to with six other tenants; 8.5% in unpaid rent related to the legacy Holiday properties; and 0.6% related to lower forecasted revenue from transitioned properties prior to the start of the pandemic.
Please see the Company's Form 10-Q for the quarter ended September 30, 2021, and prior press releases for more information regarding rent concessions.
Occupancy
The following table summarizes the average monthly portfolio occupancy for Senior Living Communities ("SLC"), Bickford, and Holiday for the periods indicated, excluding development properties in operation less than 24 months, notes receivable, and properties disposed or transitioned to new operators.
Properties | Nov-21 | Oct-21 | Sep-21 | Aug-21 | Jul-21 | Jun-21 | May-21 | Apr-21 | |
SLC | 9 | 81.9% | 81.5% | 80.9% | 80.4% | 80.0% | 79.1% | 78.6% | 77.9% |
Bickford | 42 | 81.8% | 81.3% | 80.7% | 80.3% | 79.6% | 78.2% | 77.3% | 76.6% |
Holiday | 17 | 79.1% | 78.9% | 78.9% | 77.5% | 77.1% | 76.3% | 75.7% | 75.3% |
Properties | Mar-21 | Feb-21 | Jan-21 | Dec-20 | Nov-20 | Oct-20 | Sep-20 | Aug-20 | |
SLC | 9 | 77.8% | 78.1% | 77.3% | 76.2% | 77.1% | 78.6% | 78.9% | 78.8% |
Bickford | 42 | 74.6% | 74.9% | 75.5% | 77.1% | 79.7% | 80.5% | 81.6% | 81.1% |
Holiday | 17 | 75.1% | 75.0% | 76.7% | 78.1% | 78.6% | 79.5% | 80.5% | 81.6% |
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.
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 impact of COVID-19 on our tenants, borrowers, economy and the Company; 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 https://www.sec.gov or on NHI's web site at https://www.nhireit.com.
SOURCE: National Health Investors