Subsequent Events Subsequent Events

6 Months Ended

Jun. 30, 2015

Subsequent Events [Abstract]

Subsequent Events

SUBSEQUENT EVENTS

Real Estate Investment

East Lake

On July 1, 2015, we acquired one senior living campus in Nashville and two assisted living/memory care facilities in Indianapolis and Charlotte for $66,900,000 in cash. In addition, NHI has committed to a lessee earn out of $8,000,000 contingent on reaching and maintaining certain metrics, a contingent earn out of $750,000 payable to the seller upon reaching certain metrics, and the funding of an additional $400,000 for specified capital improvements.

We leased the facilities to East Lake Capital Management (“East Lake”) for an initial term of 10 years, plus renewal options. The lease calls for an annual payment of $4,683,000 in the first year with fixed annual escalators of 3.5% through year four and 3.0% thereafter. In conjunction with the lease, East Lake acquired a purchase option on the properties as a whole, subject to escalation on a basis consistent with rental escalations and other funding in place. The option is exercisable beginning in year six of the lease for approximately $82,000,000.

Bickford

On July 31, 2015, our subsidiary, PropCo, acquired a 92 unit assisted living/memory care facility located in Lancaster, Ohio for $21,000,000 in cash.Valuation was based on an 8.0% capitalization rate on its trailing net operating income performance. The facility was leased under terms structured to comply with provisions of RIDEA, to the operating company, OpCo, of which we retain an 85/15 ownership interest with Bickford, as discussed in Note 2. Because the facility was owner-occupied by a third party, the acquisition was accounted for as an asset purchase.