OMAHA, NEB. — Sabra Health Care REIT Inc. (NASDAQ: SBRA) has acquired six Nebraska seniors housing facilities for $90 million. The transaction is a sale-leaseback with operator Nye Senior Services LLC, which has agreed to an initial 10-year term with four renewal options of five years each.
The properties, all located within a 100-mile radius of Omaha, total 213 independent living units, 168 assisted living units and 292 skilled nursing beds. With this purchase, Irvine, Calif.-based Sabra continues to expand its presence in the middle of the country, having invested $230 million in Texas seniors housing facilities last summer.
“This acquisition marks our first entry into Nebraska and aligns us with a terrific company that has had success in operating senior housing and skilled nursing facilities, a valuable skill set,” says Rick Matros, Sabra CEO and chairman. “The management team also has expansion plans on the docket for certain existing assets, which we anticipate financing.”
Nye’s triple-net lease agreement includes annual rent escalations of 3 percent, resulting in annual lease revenues of $8 million and an initial yield on cash rent of 7.78 percent for Sabra. The REIT will pay an “earn-out” based on incremental portfolio value created through expansion and conversion projects, the amount of which will be determined based on portfolio performance following the third anniversary of the master lease.
The assets include Nye Square, Nye Legacy and Nye Pointe in the Omaha suburb of Fremont; Gateway Senior Living in Lincoln; Regency Square in South Sioux City; and The Meadows in Norfolk.
Nye Senior Services was founded in 1989 by Russell Peterson, who began his career in corporate banking before taking over the original nursing facility owned by his family in Lyons, Neb. The company offers a full continuum of care, including rehabilitation and general wellness programs in addition to independent living, assisted living and skilled nursing.
With this transaction, Sabra’s national portfolio grows to 127 properties in 28 states totaling 13,414 licensed beds. The REIT’s stock price closed at $27.58 per share on Feb. 19, up from $26.57 per share one year ago.
— John McCurdy