SNF Transactions: Omega, Diversicare Ink New Lease

Diversicare and Omega Negotiate New Master Lease

Omega Healthcare Investors (NYSE: OHI) entered into a new master lease with tenant Diversicare Healthcare Services, Inc. (Nasdaq: DVCR), locking in 35 properties for the next 12 years.

The move will consolidate two separate leases currently shared between the Brentwood, Tenn.-based Diversicare and the Hunt Valley, Md.-based Omega: 23 SNFs in Ohio, Kentucky, Texas, Alabama, Tennessee and Florida will join 12 additional properties in Missouri, Indiana, Ohio and Kentucky under a single master lease that takes effect October 1, 2018.

The 12-year lease has a fixed annual escalator of 2.15% and the option for a pair of 10-year extensions.

“Diversicare and Omega have enjoyed a long, successful relationship with one another,” Diversicare CEO Kelly Gill said in a statement announcing the deal. “We are appreciative of Omega’s cooperation throughout this process and are glad to have this renewal completed this far in advance of the effective date.”

County-Owned SNF Gets Needed Loan

The Butler County Care Facility, a government-operated SNF in Hamilton, Ohio, received its second loan from local authorities in the last year, helping it stave off potential payroll issues.

The Journal-News reported that the county agreed to lend the property $425,000 so it can meet payroll through the end of the year, about 10 months after the government floated it a $225,000 loan so it could pay its workers through the end of 2016.

Combined with the balance left on a $1 million loan the county gave the facility in 2014, the SNF owes $725,000. The paper blamed the SNF’s woes on new Medicare payment models and “a run-down” physical plant, though government officials have recently turned to outside consultants in order to slash expenses and increase reimbursements.

Ziegler Secures $67M for Non-Profit Vermont CCRC

The Chicago-based specialty investment bank Ziegler closed $67 million in Series 2017A-C financing for Wake Robin Corporation, a Vermont-based skilled nursing and senior housing provider.

Wake Robin developed the first continuing care retirement community (CCRC) in the state of Vermont, and today operates a 136-acre CCRC — also known as a “life plan community” — in Shelburne, Vt. with 212 independent living units, 51 skilled nursing units and 31 residential care units.

The provider will use the cash to refinance previous bonds and build new units of all types at its facility — including six new skilled units. Wake Robin also plans to renovate its existing SNF physical plant with the money.

M&T Bank purchased the Series 2017B&C bonds in the transaction, with Greenbrier Development serving as development consultant.

Written by Alex Spanko