Griffin-American Healthcare REIT IV, Inc. announced an agreement to buy a portfolio of eight skilled nursing facilities in Missouri for $88.2 million.
The portfolio includes facilities in Kansas City, Salisbury, Florissant, Sedalia, Milan, Trenton, Moberly, and St. Elizabeth, Mo., with a total of 1,112 licensed beds. The SNFs offer skilled nursing, residential care and other ancillary behavior services — and will be 100% occupied at the time of the acquisition, according to a Form 8-K filed with the Securities and Exchange Commission (SEC) on June 7.
If the deal closes, the portfolio will be 100% leased under a 15-year absolute net lease with two 10-year renewal options. The lease also features annual rent escalators, tied to the Consumer Price Index with a floor of 2% and a cap of 3%.
“This portfolio of skilled nursing facilities adds greater diversification to the Griffin-American Healthcare REIT IV portfolio in terms of geography, asset class, and revenue,” Stefan Oh, the real estate investment trust’s (REIT) executive vice president of acquisitions, said in a press release announcing the agreement. “This potential acquisition is especially attractive as the portfolio is comprised of well-performing skilled nursing facilities in desirable locations that are subject to a long-term absolute net lease.”
Griffin-American Healthcare, which is sponsored by American Healthcare Investors and Griffin Capital Company, is expected to finance the purchase of the portfolio through funds raised via initial public offering and debt financing, according to the filing.
Griffin-American expects to close the deal in the third quarter of 2018. A spokesperson for the REIT declined to comment beyond the release, because the transaction is not yet finalized.
Written by Maggie Flynn