Boston, MA 09/30/2014 (wallstreetpr) – According to reports, Sabra Health Care REIT Inc (NASDAQ:SBRA) announced on September 25, 2014 that it acquired portfolio of 21 independent living facilities. All of these 21 facilities are located in 15 different states. SBRA has acquired them from the affiliates of well-known Holiday Acquisition Holdings Corp. It had to pay $550.0 million to acquire all the facilities completely.
Management Call:
One of the spokespeople of Sabra Health Care REIT Inc (NASDAQ:SBRA) told the reporters that with the help of this transaction, SBRA entered into a triple-net master lease agreement with Holiday Tenant. One of the affiliates of Holiday will continually operate all the facilities, provided all the conditions of the agreement are fulfilled. As per the information, the initial term of the master lease is fifteen years followed by two five-year renewal options. These five-year renewal options are not mandatory to execute. The annual base rent of the facilities is $30.3 million with an annual rent increment rate of 4% for the second and third year. For the remaining period, it would be equivalent to CPI or 3.5% whichever is higher. The management of Sabra Health Care REIT Inc (NASDAQ:SBRA) expects the master lease to generate annual revenue of $39.3 million in accordance with GAAP. At the same time, the expected yield on cash rent is 5.50% as per the information.
According to Rick Matros, Chairman and CEO of the SBRA, the acquisition transaction is completely transformational for the company. The company has been looking forward to attaining its long term and short term goals for quite some time now, and the current acquisition is a part of that growth strategy. SBRA wants to explore private pay senior housing segment more and more over time, and that’s the main reason it has acquired these independent facilities. He expects that this investment will further strengthen Sabra Health Care REIT Inc (NASDAQ:SBRA)’s market position and help it achieving good investment grade ratings from top notched rating agencies.
