NHI Signs Agreement with Bickford to Convert RIDEA Joint Venture
- NHI purchased Bickford’s 15% interest in the real estate for
$25.1 million ; - Bickford purchased NHI’s 85% interest in the facilities’ operations for
$8.1 million ; - 2016 base cash rent of
$25.3 million on the 32 stabilized facilities is unchanged based on NHI’s investment-to-date of approximately$298 million , of which NHI will now receive 100%; - There are 5 additional facilities under development owned by NHI; one opened in July, two are planned to open by the end of 2016, and two are planned to open in 2017. Funded amounts will be added to the lease basis during construction and up to the first six months after opening; thereafter, base rent will be charged to Bickford at a 9% annual rate. Once the facilities are stabilized, rent will be reset to fair market value;
- Base rent on all leases will continue to escalate by 3% annually on the anniversary date of the lease;
- Future development projects between the parties will be funded through a construction loan at 9% annual interest and NHI will receive a favorable purchase option at stabilization and rent will be set at fair market value with a floor of 9.55% on NHI’s total investment; and
- On current and future development projects, Bickford as the operator will be entitled to incentive payments based on the achievement of predetermined operational milestones, the funding of which will increase the investment on which the lease payment to NHI is calculated.
The new agreement does not change the terms previously disclosed of the 15-year triple-net lease entered into between the parties for 5 assisted living and memory care facilities not placed into the joint venture and acquired by NHI pursuant to a purchase option with Bickford in
On
NHI’s President and CEO,
About NHI
Incorporated in 1991,
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 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
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