Sabra Health Care REIT, Inc. Completes Previously Announced RCA Mortgage and Additional Investment; Transfers three qualified nursing establishments to subsidiaries of the Ensign group
IRVINE, California, October 18, 2021– (COMMERCIAL THREAD) – Sabra Health Care REIT, Inc. (âSabraâ, the âCompanyâ or âweâ) (Nasdaq: SBRA) today announced the closing of two investments and the transition of three facilities into subsidiaries of The Ensign Group.
On October 15, 2021, Sabra closed the first tranche of the previously announced $ 325 million mortgage, which, when fully funded, will be secured by eight inpatient drug treatment centers operated by Recovery Centers of America Holdings, LLC ( âRCAâ) located in the Northeast and Midwestern regions of the United States (the âRCA Mortgage Loanâ). The first installment, totaling $ 290 million, is guaranteed by six of the eight drug treatment centers. Funding for the second tranche of $ 35 million, which would be secured by mortgages against the two remaining centers, is conditional on the two remaining centers meeting certain minimum debt service coverage requirements. The remaining terms of the RCA Mortgage are in accordance with those previously disclosed. RCA is the leading national branded proximity provider of inpatient and outpatient drug treatment services for people with drug and alcohol addiction and concurrent behavioral health disorders in the United States.
Jasper Sale Leaseback
On October 1, 2021, Sabra completed the acquisition of a 113-unit senior citizen building for $ 26.3 million from Legacy Living and immediately entered into a long-term triple net lease with an affiliate of the seller. The state-of-the-art property in Jasper, Indiana opened in 2019 and spans the continuum of care encompassing 18 independent living cabins, 70 assisted living units and 25 memory care units. The lease has an initial term of 15 years with two options for an extension of 5 years. The initial rental rate is 6.93%, with annual indexations based on the CPI with a floor of 2.25% and a ceiling of 3.0%. The property is currently 94% occupied with initial lease coverage of 1.20x. Sabra will also have the option of purchasing 24 additional independent living cabins at cost, upon receipt of the certificate of occupancy, and will add the additional cabins to the lease at the then current rental rate.
On October 1, 2021, Sabra completed the transition from three qualified nursing facilities, previously leased to two separate operators, to subsidiaries of The Ensign Group, Inc. under a triple net head lease. The three properties have 348 beds and are located in Boise, Idaho and Desoto and Trinity, Texas. The main lease has an initial term of 20 years with two options for an extension of 5 years. The initial rent is $ 1.9 million with annual indexations based on the CPI with a cap of 2.5%. This marks Sabra’s initial investment in operations affiliated with the Ensign Group.
âEach of these transactions demonstrates the creativity Sabra brings to complex transactions, allowing unique solutions to be crafted to meet the needs of the parties. senior housing and behavioral health sectors, âsaid Talya Nevo-Hacohen, Sabra’s Chief Investment Officer.
Sabra Health Care REIT, Inc., a Maryland company, operates as a self-directed and self-directed real estate investment trust (a âREITâ) which, through its subsidiaries, owns and invests in real estate in the United States. service to the health sector throughout the United States and Canada.
SAFE HARBOR FORWARD-LOOKING STATEMENTS
This press release contains “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. These statements can be identified, without limitation, by the use of “expects”, “believes”, ” intends “,” should “or comparable terms or their negative.
Our actual results may differ materially from those projected or contemplated by our forward-looking statements due to various factors, including, but not limited to, the following: the ongoing COVID-19 pandemic, including the risk of additional outbreaks of infections at COVID-19 due to the rate of public acceptance and effectiveness of COVID-19 vaccines or new, more contagious and / or vaccine-resistant variants, and measures to prevent its spread, and the related impact on our tenants, operators and residences for the elderly – Managed communities; our dependence on the operational success of our tenants; the potential variability of our rental and related income reported following the adoption of the Accounting Standards Update (âASUâ) 2016-02, Leases, as amended by subsequent ASUs, on January 1, 2019; operational risks regarding our retirement homes – managed communities; the effect of our tenants going bankrupt or becoming insolvent; our ability to find replacement tenants and the impact of unforeseen costs associated with acquiring new properties; the impact of litigation and rising insurance costs on our tenants’ businesses; changes in healthcare regulations and political or economic conditions; the impact of regulatory approvals required for transfers of healthcare properties healthcare; competitive conditions in our industry; our concentration in the healthcare real estate sector, particularly in self-catering establishments ns skilled nurses / interim and senior residences, which makes our profitability more vulnerable to a downturn in a specific sector than if we were to invest in multiple industries; the large amount and our ability to service our debt; restrictive covenants in our debt agreements which may restrict our ability to pay dividends, make investments, incur additional debt and refinance debt on favorable terms; increases in market interest rates; the phasing out of the London Interbank Offered Rate (âLIBORâ) benchmark from 2021; our ability to raise capital through equity and debt financing; the risks associated with our investment in the Enlivant joint venture; changes in foreign currency exchange rates; the relatively illiquid nature of real estate investments; loss of key management personnel; uninsured or underinsured losses affecting our properties and the potential for costs and liabilities associated with environmental compliance; the impact of an information technology security failure or breach on our operations; our ability to maintain our status as a real estate investment trust (âREITâ) under federal income tax laws; changes in tax laws and regulations affecting REITs (including the potential effects of the Tax Cuts and Jobs Act); compliance with REIT requirements and certain tax and regulatory matters relating to our status as a REIT; and ownership limits and takeover defenses in our constating documents and under Maryland law, which may restrict opportunities for a change of control or business combination.
Additional information regarding the risks and uncertainties that could affect our business can be found in our filings with the Securities and Exchange Commission (the âSECâ), including in Part I, Item 1A of our annual report on the Form 10-K for the year ended December 31, 2020. We do not intend, and we do not assume any obligation, to update any forward-looking information to reflect events or circumstances after the date of this release or to reflect the occurrence of unforeseen events, except as required by law. .
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