National Health Investors on board for $25 million skilled nursing project
National Health Investors, Inc. (NYSE: NHI) entered into an agreement to finance the development of a 144-bed skilled nursing facility near Milwaukee, a $25.35 million commitment with a 9.5% initial yield.
Under NHI’s commitment, initial funding totaled $4.7 million. The yield earned during construction will be capitalized into NHI’s investment, according to a statement announcing the real estate investment trust’s (REIT) involvement in the project. Construction is in progress, with an expected completion date sometime in the second quarter of 2020, reports Skilled Nursing News.
The facility, called Ignite Medical Resort Oak Creek, will be operated by a tenant entity owned by affiliates of Villa Healthcare and Ignite Medical Resorts; the parties will enter into a 12-year lease term with two 10-year renewals and a 2% annual escalator.
It is the first time all three entities — NHI, Ignite, and Villa Healthcare — have worked together, Villa president Ben Israel told Skilled Nursing News, though executives with Ignite and Villa have long-standing relationships. The new SNF, which is located in Oak Creek, Wis., is the second facility on which Ignite and Villa have partnered.
Villa provides several back-office services for Ignite, according to Ignite CEO Tim Fields, and that arrangement will continue in the new venture — with Ignite dealing with day-to-day operations and Villa handling such functions as accounting and billing. But Villa is no stranger to SNF operations; the company has a portfolio of 35 facilities, primarily in Minnesota and Michigan, with three in the state of Wisconsin.
“This was a project that Villa had anticipated doing on its own,” Israel noted, adding that the bed licenses for the property came from Kindred Healthcare, which exited the SNF market last year. “We had initially purchased the beds from Kindred and then went to go identify some land to build the nicest and the newest facility in the state of Wisconsin.”
Read the full story at Skilled Nursing News.
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