NHI Enters Into $50 Million Mezzanine Loan with Montecito Medical Real Estate

Rhea-AI Summary

National Health Investors (NYSE: NHI) has entered into a $50 million mezzanine loan agreement with Montecito Medical Real Estate for the Montecito Two Rivers Fund. This fund aims to invest in medical real estate across the U.S., targeting up to $200 million in assets. NHI will earn a 9.5% interest rate on the loan, with an additional 2.5% accruing for future capital events. The loan term is five years, with the first investments expected by Q2 2021. This partnership underscores NHI's strategic focus on healthcare real estate.

Positive

• NHI enters a $50 million loan agreement, enhancing its investment portfolio.
• The partnership intends to leverage Montecito's expertise in healthcare real estate.
• Potential to acquire up to $200 million in medical assets, increasing revenue opportunities.

Negative

• None.

MURFREESBORO, TN / ACCESSWIRE / April 20, 2021 / National Health Investors, Inc. (NYSE:NHI) announced that it has entered into a $50 million mezzanine loan agreement with Montecito Medical Real Estate for a new medical office building fund named Montecito Two Rivers Fund, LLC (the "Fund"). The Fund will invest in medical real estate, including medical office buildings, throughout the United States and is expected to acquire up to $200 million of assets, including third-party secured financing and equity provided by Montecito. Montecito Medical Real Estate is a privately held company based in Nashville, TN, that specializes in healthcare-related acquisitions and has acquired more than $4 billion in medical real estate assets since its formation in 2006, including approximately $1.4 billion in the last 26 months.

NHI will earn interest on its loan with a current pay rate of 9.5% and accrue an additional 2.5% in interest to be paid upon certain future capital events, including asset sales and recapitalizations. Identifying and closing on the assets is expected to occur beginning in the second quarter of 2021 and continue until the fund is fully invested or two years. The term on the mezzanine loan will be for five years commencing on the earlier of full deployment of the mezzanine funds or two years, and includes two one-year extensions.

Eric Mendelsohn, President, and CEO stated, "We are excited to partner with one of the premier owners and operators of MOBs. I am also gratified to realize a long-term goal of doing more business in Nashville, the center of the healthcare economy in the United States."

Chip Conk, CEO of Montecito Medical, added, "We look forward to working closely with NHI and leveraging our expertise in acquiring and operating medical office buildings anchored by dominant physician groups and health systems throughout the country."

About Montecito Medical Real Estate

Montecito Medical is one of the nation's largest privately held companies specializing in healthcare-related real estate acquisitions and funding the development of medical real estate. Montecito is a leading resource for both medical real estate owners and healthcare providers seeking to monetize or expand their holdings. Since 2006, it has completed transactions across the United States involving more than $4 billion in medical real estate. Headquartered in Nashville, TN, Montecito has been named as a "key influencer in healthcare real estate" by GlobeSt.com and the editors of Healthcare Real Estate Insights.

About NHI

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.

CONTACT:
Contact: Dana Hambly, Vice President, Investor Relations
Phone: (615) 890-9100

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 website at https://www.sec.gov or on NHI's website at https://www.nhireit.com.

SOURCE: National Health Investors

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FAQ

What is the purpose of the $50 million mezzanine loan agreement by NHI?

The loan is for the Montecito Two Rivers Fund, aimed at investing in medical real estate across the U.S.

What interest rate will NHI earn on the mezzanine loan to Montecito Medical?

NHI will earn a 9.5% interest rate on the loan, with an additional 2.5% accruing for future capital events.

What is the expected investment amount for the Montecito Two Rivers Fund?

The fund is expected to acquire up to $200 million in medical real estate assets.

When will the investments from the Montecito Two Rivers Fund commence?

Investments are expected to begin in the second quarter of 2021.

How long is the term of the mezzanine loan agreement with Montecito Medical?

The term is five years, with options for two one-year extensions.