National Health Investors president and CEO Eric Mendelsohn

MURFREESBORO, TN—National Health Investors Inc. reports it has entered into a property joint venture valued at approximately $128.4 million with current tenant Discovery Senior Living on six senior health care properties located in Pennsylvania, Maryland and Indiana.

The joint venture will acquire the six properties for $128.35 million, including up to $1.5 million in estimated closing costs and expenses. NHI, headquartered in Murfreesboro, TN is the managing member and will own 97.5% of the joint venture equity and Bonita Springs, FL-based Discovery will own 2.5%.

The properties consist of 145 independent units, 356 assisted living units and 95 memory care units and will be leased to affiliates of Discovery for a 10-year term with a 6.5% initial annual cash yield with a CPI-based escalator with a 2% floor and 3% cap beginning in year two. There are two five-year extension options in the joint venture property purchase deal.

Eric Mendelsohn, NHI President and CEO, says, “NHI has had a long-standing relationship with Discovery, which is a highly-regarded, sophisticated operator of independent, assisted and memory care communities. We are excited to further develop that relationship through a joint venture on these properties that provide an excellent fit into NHI's portfolio.”

NHI has committed to a senior mortgage loan of $6 million at a 7% annual interest rate extended to Discovery affiliates for an additional property in Indiana for which the joint venture will have the option to purchase at stabilization. The facility consists of 52 assisted living units and 22 memory care units. The loan is scheduled to close by June 30.

Last month, National Health Investors acquired a 73-unit assisted living/memory care facility in Brighton, MI for $13.5 million and will lease the facility to an affiliate of Comfort Care Senior Living. The 10-year lease will have a lease rate of 7.75% plus annual escalators starting in year three. The acquisition was funded by NHI's revolving credit facility.

Discovery Senior Living, which has a portfolio of more than 9,500 existing home or homes under development, was involved in a major deal last month. Irvine, CA-based HCP Inc. reported on May 1 it acquired a $445-million portfolio of nine recently-built, continuum of care, senior housing communities concentrated primarily in Florida and operated by Discovery Senior Living.