Sabra to Expand its Relationship with Ensign and Avamere

About this update from Sabra Health Care Reit, Inc.

[{"type":"text","content":" IRVINE, Calif.--(BUSINESS WIRE)--\nSabra Health Care REIT, Inc. (“Sabra”) (Nasdaq: SBRA) announced that it will transition the 24-property portfolio previously leased to North American Health Care, Inc. (“North American”) to two of Sabra’s existing tenants, The Ensign Group (“Ensign”) (Nasdaq: ENSG) and the Avamere Family of Companies (“Avamere”).\n\nAfter giving effect to this transition, Ensign will become one of Sabra’s largest tenants, representing about 8% of Annualized Cash NOI, while Avamere will remain one of Sabra’s largest tenants, also accounting for roughly 8% of Annualized Cash NOI.\n\nSabra believes this transition represents a unique opportunity to improve the long-term value of this high-quality real estate portfolio, noting the enhanced credit profile that supports its rental income, highlighted by Ensign’s corporate guaranty and $5 billion equity market capitalization.\n\nThe transition of these facilities to Ensign operating companies and Avamere is expected to be completed by February 1, 2023 and remains subject to the completion of certain regulatory approvals and other closing conditions. Sabra expects to recognize a total of $14.7 million in revenue from these facilities during the fourth quarter through the end of the transition period, which approximates the rent Sabra would have received during this timeframe under the previous leases with North American.\n\nHighlights:\n\n\nEnsign will add 20 properties located in California to two master leases with Ensign operating companies with initial terms of 18 and 20 years, each with an accompanying corporate guarantee from The Ensign Group, Inc.\n\n\nThe initial annual rent attributable to the 20 properties will be $29.4 million, with CPI-based annual rent escalators not to exceed 2.5%\n\n\nAvamere will add 4 properties located in Washington to its existing master lease, which includes 9 other properties in Washington, with an initial term of 13 years\n\n\nThe initial annual rent attributable to the 4 additional properties leased to Avamere will be $5.1 million, with an annual rent escalator of 2.75%\n\n\nPro-forma for this transition, EBITDARM coverage for the trailing twelve months ended June 30, 2022 on the 24 properties is 1.68X\n\n\nCommenting on the news, Rick Matros, CEO and Chair of Sabra, said, \"This is an opportunity to expand our relationship with...

More updates from Sabra Health Care Reit, Inc.