Sabra Health Care REIT Acquires a 100-Unit Senior Housing Facility and a Former Senior Housing Facility to be Converted to an Addiction Treatment Center

Rhea-AI Summary

Sabra Health Care REIT (Nasdaq: SBRA) announced the acquisition of a 100-unit senior housing facility in Augusta, Georgia, and a vacant senior housing facility in Gulf Breeze, Florida, for $28.5 million. The Augusta facility, nearly 90% occupied, provides an initial cash yield of 8.0% with an earnout option. The Gulf Breeze facility will be transformed into a 60-bed addiction treatment center, with Sabra investing up to $3 million and generating a 9.0% initial cash yield under a 15-year lease. Sabra aims to enhance shareholder value through these strategic acquisitions.

Positive

• Acquisition of a nearly 90% occupied facility in Augusta, Georgia, providing a robust cash yield of 8.0%.
• Strategic conversion of the Gulf Breeze facility into a 60-bed addiction treatment center, diversifying revenue streams.
• Initial cash yield of 9.0% from the Gulf Breeze facility lease, escalating annually.
• Strengthened relationship with Claiborne Senior Living and continued partnership with Landmark Recovery.

Negative

• None.

Sabra Health Care REIT, Inc. (“Sabra”) (Nasdaq: SBRA) today announced the acquisition of a 100-unit senior housing facility in Augusta, Georgia and a former senior housing facility in Gulf Breeze, Florida for an aggregate purchase price of $28.5 million.

On March 5, 2021, Sabra completed the acquisition of a 100-unit assisted living and memory care facility, The Claiborne at West Lake, located in Augusta, Georgia. The community opened in late 2018 and was nearly 90% occupied at the time of the transaction. The transaction was underwritten with an initial cash yield of nearly 8.0%, and features an earnout opportunity for the seller after twelve months. Simultaneously with the acquisition, Sabra entered into a management agreement with Claiborne Senior Living, the incumbent manager, to continue managing the property.

On March 15, 2021, Sabra completed the acquisition of a vacant senior housing facility located in Gulf Breeze, Florida. Sabra will fund up to $3 million of construction cost to convert the facility into a 60-bed addiction treatment center. Simultaneously with the acquisition, Sabra added the facility to an existing triple net master lease with Landmark Recovery. The lease has an initial 15-year term and an initial cash yield of 9.0% escalating annually at the greater of CPI or 2.0%. Landmark Recovery currently leases 5 addiction treatment facilities from Sabra.

“These transactions show Sabra’s commitment and ability to creatively structure accretive investments for our shareholders. We are very excited to begin a new relationship with Claiborne Senior Living and to expand our already successful relationship with Landmark Recovery,” said Talya Nevo-Hacohen, Sabra’s Chief Investment Officer.

About Sabra

Sabra operates as a self-administered, self-managed real estate investment trust (a “REIT”) that, through its subsidiaries, owns and invests in real estate serving the healthcare industry throughout the United States and Canada.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210323005271/en/

FAQ

What is the recent acquisition by Sabra Health Care REIT?

Sabra Health Care REIT acquired a 100-unit senior housing facility in Augusta, Georgia, and a vacant facility in Gulf Breeze, Florida, for $28.5 million.

What is the cash yield from the new acquisitions by Sabra?

The Augusta facility offers an initial cash yield of 8.0%, while the Gulf Breeze facility has a cash yield of 9.0%.

What plans does Sabra have for the Gulf Breeze facility?

Sabra plans to invest up to $3 million to convert the Gulf Breeze facility into a 60-bed addiction treatment center.

How does Sabra structure its management agreements?

Sabra entered into a management agreement with Claiborne Senior Living for the Augusta facility to ensure effective property management.

What strategic benefits does Sabra expect from these acquisitions?

Sabra aims to creatively structure accretive investments, expand its market presence, and strengthen partnerships with existing operators.