Sabra Exercises Purchase Option and Acquires a Skilled Nursing and Assisted Living Portfolio in Texas; Acquires an Additional Skilled Nursing Facility in Minnesota
IRVINE, Calif., Dec. 3, 2012 (GLOBE NEWSWIRE) -- Sabra Health Care REIT, Inc. ("Sabra," the "Company" or "we") (Nasdaq:SBRA) announced two acquisitions: a portfolio of three skilled nursing facilities and one assisted living facility in Texas, and a skilled nursing facility in Minnesota. The transactions were funded with available cash and proceeds from our secured revolving credit facility.
On November 30, 2012, we exercised our option to purchase and completed the acquisition of three skilled nursing facilities and one assisted living facility (collectively, the "Meridian Portfolio") located in the Dallas-Fort Worth Metroplex and Rockport, Texas from Meridian Senior Properties Fund I, L.P. ("MSPF"). With a total of 394 beds, the three skilled nursing facilities were built in 2001 or later and the assisted living facility was constructed in 1996.
In March 2012, Sabra provided a $10.0 million mezzanine loan secured by the partnership interests of MSPF under which Sabra had an option to purchase these facilities for $43.0 million. At closing, the outstanding mortgage debt and Sabra's mezzanine loan were repaid, resulting in Sabra funding a net $33.0 million.
Concurrently with the purchase, we entered into a triple-net master lease agreement with affiliates of the seller. The lease has an initial term of 15 years with two 5-year renewal options and provides for annual rent escalators equal to 3.0% for the first two years and the greater of the change in the Consumer Price Index or 2.5% thereafter. The initial yield on cash rent is 9.0% with $4.7 million in annual lease revenues determined in accordance with GAAP.
Camden Care Center
On November 30, 2012, we purchased Camden Care Center, an 87-bed skilled nursing facility in Minneapolis, Minnesota ("Camden"), built in 1990, for $7.2 million. Concurrently with the purchase, we entered into a triple-net lease with Trinity Health Systems, LLC ("Trinity"). The lease has an initial term of 15 years with two 5-year renewal options and provides for annual rent escalators equal to the greater of the change in the Consumer Price Index or 3.0%, resulting in annual lease revenues determined in accordance with GAAP of $0.9 million and an initial yield on cash rent of 10.0%.
Commenting on these acquisitions, Rick Matros, CEO and Chairman, said, "Both of these acquisitions were expected to occur next year, but were accelerated to accommodate year end closing preferences. The Camden facility is the second deal that we have done with Trinity following the Ridgecrest deal completed earlier in the year. The four facility deal with Meridian is an early exercise of the purchase option related to the mezzanine loan announced earlier this year. These are very attractive assets and primarily recent vintage. We appreciate the opportunity to grow our partnership with both Trinity and Meridian and look forward to additional opportunities in the future."
Sabra Health Care REIT, Inc. (Nasdaq:SBRA), a Maryland corporation, 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. Sabra leases properties to tenants and operators throughout the United States. As of November 30, 2012, and after giving effect to the Meridian Portfolio and Camden acquisitions, Sabra's investment portfolio included 110 properties leased to operators/tenants under triple-net lease agreements (consisting of (i) 97 skilled nursing/post-acute facilities, (ii) 12 senior housing facilities, and (iii) one acute care hospital), and two mortgage loan investments. As of November 30, 2012, and after giving effect to the Meridian Portfolio and Camden acquisitions, Sabra's properties were located in 27 states and included 12,170 licensed beds/units.
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FORWARD-LOOKING STATEMENTS SAFE HARBOR
This release contains "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. These statements may be identified, without limitation, by the use of "expects," "believes," "intends," "should" or comparable terms or the negative thereof. Forward-looking statements in this release include all statements regarding our expectations concerning our acquisition of the Meridian Portfolio and Camden facilities and their future performance.
Our actual results may differ materially from those projected or contemplated by our forward-looking statements as a result of various factors, including, among others, the following: our dependence on Sun Healthcare Group, Inc. ("Sun") until we are able to further diversify our portfolio; our dependence on the operating success of our tenants; changes in general economic conditions and volatility in financial and credit markets; the dependence of our tenants on reimbursement from governmental and other third-party payors; the significant amount of and our ability to service our indebtedness; covenants in our debt agreements that may restrict our ability to make acquisitions, incur additional indebtedness and refinance indebtedness on favorable terms; increases in market interest rates; our ability to raise capital through equity financings; the relatively illiquid nature of real estate investments; competitive conditions in our industry; the loss of key management personnel or other employees; the impact of litigation and rising insurance costs on the business of our tenants; uninsured or underinsured losses affecting our properties and the possibility of environmental compliance costs and liabilities; our ability to maintain our status as a REIT; compliance with REIT requirements and certain tax matters related to our status as a REIT; and other factors discussed from time to time in our news releases, public statements and/or filings with the Securities and Exchange Commission (the "SEC"), especially the "Risk Factors" sections of our Annual and Quarterly Reports on Forms 10-K and 10-Q. We assume no, and hereby disclaim any, obligation to update any of the foregoing or any other forward-looking statements as a result of new information or new or future developments, except as otherwise required by law.
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Source: Sabra Health Care REIT, Inc. 2012 GlobeNewswire, Inc.