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Sabra Health Care REIT, Inc. Originates $12.4 Million Mezzanine Loan With Option To Purchase Up To $50.0 Million In Skilled Nursing Facilities; Acquires Assisted Living Facility In Virginia For $6.2 Million

Stocks in this article: SBRA

IRVINE, Calif., July 1, 2013 (GLOBE NEWSWIRE) -- Sabra Health Care REIT, Inc. ("Sabra," the "Company" or "we") (Nasdaq:SBRA) (Nasdaq:SBRAP) announced the origination of a mezzanine loan investment for $12.4 million and the acquisition of a 32-unit assisted living facility located in Woodstock, Virginia for $6.2 million.

Chai Portfolio Mezzanine Loan

On June 28, 2013, we originated a $12.4 million mezzanine loan (the "Chai Mezzanine Loan") with an affiliate of Chai Facilities Acquisition Company, LLC (the "Borrower"), the indirect owner of twelve skilled nursing facilities having 1,689 licensed beds in seven states (the "Chai Portfolio"). The Chai Mezzanine Loan has a two-year term and bears interest at a fixed rate of 12.0% per annum. It is secured by the Borrowers' equity interests in the entities that own the Chai Portfolio. In addition, we have an option to purchase up to $50.0 million of properties within the Chai Portfolio. Should we exercise our option to purchase any properties in the Chai Portfolio, we would expect to enter into a new 15 year master lease with two five-year renewal options at an initial cash yield of 9.5% with annual rent increases equal to the greater of the change in the Consumer Price Index and 3.0%. The Chai Mezzanine Loan was funded with available cash.

Commenting on the Chai Mezzanine Loan, Rick Matros, CEO and Chairman, said, "The operating team for the Chai portfolio currently operates two of Sabra's Texas skilled nursing facilities. We appreciate having the opportunity to expand our relationship with SLC at the time we exercise our purchase option. The purchase option provides us with the opportunity to choose which facilities we bring into the Sabra portfolio."

Greenfield of Woodstock

On June 28, 2013, we purchased a 32-unit assisted living facility located in Woodstock, Virginia for $6.2 million ("Greenfield of Woodstock"). Concurrently with the purchase, we entered into a triple-net lease agreement with affiliates of Greenfield Senior Living, Inc. The lease has an initial term of 15 years with two ten-year renewal options and provides for annual rent escalators of 3.0%, resulting in annual lease revenues determined in accordance with GAAP of $0.6 million and an initial yield on cash rent of 7.75%. The purchase price was funded with available cash.

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