National Health Investors, Inc. (NYSE:NHI) announced today it has entered into a development and lease transaction with affiliates of Polaris Hospital Company to develop a 60-bed general acute care hospital in Murfreesboro, Tennessee that will provide acute psychiatric and in-patient rehabilitation services. NHI's total commitment to the project is $21.5 million.
Construction is expected to commence in October 2011, and the hospital is expected to open in the fourth quarter of 2012. During construction, the lease rate will be 10% on NHI's cumulative invested amount. Once the facility is open, the lease rate of 10% will be calculated on NHI's total invested amount with lease escalators beginning in the second year. The initial lease term is for 15 years.
Based in Brentwood, Tennessee, Polaris Hospital Company is backed by Hispania Private Equity II, L.P., a $112 million fund of HCP & Company, LLC a Chicago-based private equity firm. HCP & Company, LLC manages approximately $215 million on behalf of some of the country's largest public pension funds and has been an active and successful investor in growth companies since its founding in 2002.
Justin Hutchens, NHI CEO and President, noted, "We believe NHI has the potential to play a role filling the gap for available financing for experienced developers and operators. This investment further diversifies our healthcare real estate portfolio. The market demand and the solid backing of HCP & Company fit our criteria for select investments that offer the best combination of asset quality, credit and yield."
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