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Sabra Acquires Indiana Senior Housing Campus In $23.8 Million Sale/Leaseback Transaction; Funds Additional Preferred Equity Investment Of $1.7 Million

IRVINE, Calif., April 30, 2014 (GLOBE NEWSWIRE) -- Sabra Health Care REIT, Inc. ("Sabra," the "Company" or "we") (Nasdaq:SBRA) (Nasdaq:SBRAP) announced today the acquisition of a senior housing campus in Fort Wayne, Indiana ("Park Place") for $23.8 million and a preferred equity investment for the completion of a memory care facility located in Colorado Springs, Colorado of $1.7 million.

Park Place

Park Place is a senior housing campus with a total of 140 units (24 independent living units, 76 assisted living units and 40 memory care units) which opened in 2011 and is currently 100% occupied. Additionally, Park Place is encumbered by a HUD-insured mortgage with an outstanding principal balance of approximately $14.1 million and an annual interest rate of 4.84%. At closing, $1.1 million of the purchase price was used to repay an interim loan made by Sabra to affiliates of the Leo Brown Group, the operator of Park Place, and we assumed the $14.1 million HUD-insured mortgage, resulting in a cash investment of $8.6 million.

Concurrently with the purchase, we entered into a triple-net master lease agreement with affiliates of the Leo Brown Group. The lease has an initial term of 15 years with two renewal options of five years each and provides for an annual rent escalator of the greater of (i) the Consumer Price Index and (ii) 3.0%, but not to exceed 4.0%, resulting in annual lease revenues, determined in accordance with GAAP, of $2.2 million and an initial yield on cash rent of 7.38%. In addition to the sale/leaseback transaction, we are pursuing development opportunities with the Leo Brown Group.

Preferred Equity Investment

Sabra provided $1.7 million of preferred equity funding to affiliates of New Dawn Holding Company ("New Dawn") for the completion of a 48-bed memory care facility located in Colorado Springs, Colorado. The preferred equity investment provides for an annual 12.0% preferred return in addition to a right of first offer and "last look" upon the sale of the facility. This is the third development investment that Sabra has entered into with New Dawn.

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