MURFREESBORO, TN / ACCESSWIRE / October 27, 2021 / National Health Investors, Inc. (NYSE:NHI) today provided a business update regarding its monthly contractual cash collections, dispositions, and average occupancy from its three largest senior housing operators.
Eric Mendelsohn, NHI President and CEO, said, "Occupancy gains have continued across the senior housing portfolio, and we continue to be very optimistic about the long-term opportunities in the sector despite the near-term headwinds particularly on the labor front."
Mr. Mendelsohn continued, "Bickford's third quarter average occupancy of 80.2% increased by 520 basis points from the first quarter low which is more than double the industry growth rate of 210 basis points as reported by NIC for comparable assets in primary and secondary markets. Senior Living Communities is proving the strength of the entrance-fee model as their occupancy at 80.9% for September is above pre-pandemic levels. We are also encouraged by the recent improvement at our 17 legacy Holiday communities which have recovered 390 basis points of occupancy from February's low, 140 basis points of which just occurred in September."
Mr. Mendelsohn concluded, "While our results continue to be impacted by the difficult senior housing operating environment, we are making steady progress on optimizing our relationships with several of our partners and look forward to providing more details as terms are finalized this year. Fortunately, our balance sheet remains healthy and puts us in a position to pivot towards growth."
NHI agreed to defer $2.5 million in rent due for October from Bickford Senior Living ("Bickford"). Deferred rents related to Bickford total $16.3 million for 2021. NHI agreed to defer approximately $0.5 million in rent for two other tenants in October which is expected to be repaid with interest.
As previously announced, NHI's tenant for the legacy Holiday Retirement ("Holiday") portfolio of 17 properties was recently acquired by a public healthcare REIT and NHI did not receive any of its rental payments for August or September totaling $4.8 million. The tenant has not made any rental payment for October totaling $2.2 million. A default notice has been sent. NHI continues to hold $8.8 million in Holiday security deposits.
On September 30, 2021, NHI sold a 144-unit senior living campus in West Palm Beach, FL for $14.0 million in cash consideration which had annualized trailing 3-month cash rental income of approximately $1.4 million and an annualized trailing 3-month EBITDARM lease coverage of 0.64x. NHI also sold a 120-unit independent living community in Fort Wayne, IN formerly operated by Holiday for $5.8 million in cash consideration which had annualized trailing 3-month cash rental income of approximately $0.5 million and an annualized trailing 3-month EBITDARM lease coverage of 0.21x.
In 2021, NHI has completed the sale of 16 senior housing properties for approximately $187.8 million in cash consideration which represented an approximate 8.3% yield on annualized trailing 3-month cash rental income before deferrals and an annualized trailing 3-month EBITDARM lease coverage of 0.52x. The annualized trailing 3-month NOI yield on the year-to-date dispositions, assuming a 5.0% management fee and recurring capital expenditures, was approximately 2.9%. NHI also completed the disposition of two hospitals and one medical office building for approximately $44.5 million in cash consideration.
NHI has collected 78.3% of contractual cash due for October. The remaining balance for the month is comprised of the following: 9.6% in deferrals related to Bickford; 1.7% in deferrals agreed to with two tenants; 8.3% related to the legacy Holiday properties; 1.5% related to amounts expected to be collected; and 0.6% related to lower forecasted revenue from transitioned properties prior to the start of the pandemic. In 2021, NHI has collected approximately 88.0% of contractual cash due. Please see the Company's Form 10-Q for the quarter ended June 30, 2021, and prior press releases for more information regarding rent concessions.
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.
1 Holiday occupancy for 17 properties is restated retroactively to reflect the previously announced sale of the Fort Wayne, IN property. Occupancy for the Holiday 18 properties, inclusive of Fort Wayne, for September 2021 was 78.2%.
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.
Dana Hambly, Vice President, Investor Relations
Phone: (615) 890-9100
SOURCE: National Health Investors