NHI Venture Buys Senior Housing Portfolio for $128M

The REIT has teamed up with affiliates of its existing tenant, Discovery Senior Living, to acquire six communities across three states, totaling nearly 600 units of independent and assisted living and memory care facilities.

National Health Investors Inc. (NHI) has formed a joint venture with affiliates of its existing tenant Discovery Senior Living to acquire six properties across Pennsylvania, Maryland and Indiana for $128.4 million. The assets, comprising 145 independent living units, 356 assisted living units and 95 memory care units, will be leased to Discovery affiliates for a 10-year term with a 6.5 percent initial annual cash yield.

As part of the deal, NHI, an NYSE-listed real estate investment trust, will also extend a senior mortgage loan of $6 million to affiliates of Discovery for an additional facility in Indiana which the venture will have the option to purchase upon stabilization. The property has 52 assisted living units and 22 memory care units.

NHI will own 97.5 percent of the joint venture equity as the managing member, while Discovery will hold 2.5 percent. The purchase price includes up to $1.5 million in estimated closing costs.

Discovery, an operator of independent living, assisted living and memory care facilities, has a portfolio of more than 9,500 homes existing or under development. The company last month sold nine communities to HCP, a health care REIT, for $445 million in a joint venture transaction.

In April, Welltower Inc. acquired a pair of luxury senior living properties totaling 335 units in San Antonio, Texas, which have been rebranded together as Discovery Village at Dominion. Discovery Senior Living manages the combined community.