Aviv REIT closes USD42m of acquisitions
Aviv REIT has acquired five post-acute and long-term care skilled nursing facilities (SNFs) located in Ohio and Arkansas in two separate transactions for USD42.2m.
Four of the properties are triple-net leased to new Aviv operator Peregrine Health Services and one property is triple-net leased to existing Aviv operator Concepts Management.
Concepts is an operator of SNFs with four facilities in Arkansas. The triple-net lease with Concepts has an initial cash yield of 11.0 per cent, an initial lease term of 10 years and annual compounded escalators based on CPI.
Aviv's business development team cultivated a relationship with Peregrine over the past two years which resulted in this sale leaseback transaction. The triple-net lease has an initial cash yield of 9.9 per cent, an initial lease term of 10 years and fixed annual escalators. Peregrine is an operator of SNFs with 16 facilities in Ohio, with over 25 years of experience operating SNFs. Aviv plans to pursue additional growth opportunities with Peregrine.
"We have already had an active fourth quarter closing over USD90 million of acquisitions, we expect to continue to close transactions through the balance of the fourth quarter and we have continued to grow with attractive and accretive acquisitions," says Craig M Bernfield, chairman and chief executive officer of Aviv.
"We are extremely pleased with the successful execution of our recent USD250m unsecured bond offering, which has positioned us to execute on the high-quality opportunities in our pipeline. We are confident that we will continue to execute our growth strategy by focusing on quality operators, real estate and markets. We still believe that there is a significant and attractive long-term consolidation opportunity with favourable industry dynamics including SNFs being the low-cost provider of long-term and post-acute care. We believe in our competitive advantage because our management team has demonstrated its capability of sourcing and executing attractive investments over a long period of time. Aviv is committed to investing in post-acute and long-term care SNFs and looks forward to a busy 2014 and beyond."