CHICAGO, Dec. 5, 2013 /PRNewswire/ -- Aviv REIT, Inc. ("Aviv" or the "Company") (AVIV) announced today it has acquired four properties in Ohio and Indiana for $44.9 million. The first three properties are located on a campus in Ohio which includes an assisted living facility ("ALF"), a post-acute and long-term care skilled nursing facility ("SNF") and a long-term acute care hospital ("LTACH"), plus the right to build a new LTACH. The fourth property is a specialty hospital ("Specialty Hospital") located in Indiana. The ALF is triple-net leased to existing Aviv operator Maplewood Senior Living ("Maplewood"), the SNF and LTACH are triple-net leased to new Aviv operator Cardinal Care Management ("Cardinal") and the Specialty Hospital is triple-net leased to existing Aviv operator Physician's Hospital ("Physician's"). These investments have a blended initial cash yield of 9.4%.
The Maplewood lease for the ALF has an initial cash yield of 8.0%, which increases to 9.0% in year 2, with 2% fixed annual escalators thereafter, and an initial lease term of 10 years. Maplewood is now an operator of seven ALFs in Connecticut and Ohio, all of which are leased from Aviv. Maplewood has been an Aviv operator relationship since 2010 and is now Aviv's fifth largest operator, with 7.0% of the Company's total rent. This transaction was brought to us by a long-standing Aviv relationship.
The Cardinal lease for the SNF and LTACH has an initial cash yield of 9.8%, 2% fixed annual escalators beginning in year 3 and an initial lease term of 10 years. Cardinal is now an operator of two properties in Ohio. The principals in the transaction have a 15 year relationship with Aviv and Aviv plans to pursue additional growth opportunities with Cardinal. This transaction was also brought to Aviv by a long-standing relationship.
The Physician's lease for the Specialty Hospital has an initial cash yield of 10.0%, annual escalators based on CPI and an initial lease term of 10 years. Physician's is now an operator of three specialty hospitals in Indiana, all of which are leased from Aviv. Aviv began its relationship with Physician's in 2012 and the Company expects to pursue additional growth opportunities with Physician's. The transaction was sourced by Physician's and brought exclusively to Aviv.
"As we expected, we have continued to close acquisitions throughout the fourth quarter and we still expect to close additional acquisitions before the end of the year. The substantial majority of our acquisitions this year have been SNFs, but we continue to make strategic investments in other complementary healthcare properties such as the Maplewood, Cardinal and Physician's acquisitions," said Craig M. Bernfield, Chairman and Chief Executive Officer of Aviv.
"Maplewood has become a key, strategic relationship for us, with best-in-class properties in strong wealth demographic markets, like Fairfield County, Connecticut, and now in targeted markets in eastern Ohio. The Maplewood investments have created substantial value for our portfolio. The decision to acquire the Ohio campus was strategically designed to diversify Maplewood into another strong geographic region which we hope to develop over the next few years," added Mr. Bernfield.
Mr. Bernfield continued, "With these acquisitions, we are pleased to have completed $204 million of investments in 2013. These transactions further diversify the portfolio and continue our focus of working with growth-oriented operators. We continue to see a strong pipeline of high-quality opportunities at attractive valuations and lease yields, with new and existing operator relationships. Our relationship-oriented strategy has provided us with consistent growth opportunities over a long period of time and we look forward to continuing this track record of disciplined growth."
Aviv REIT, Inc., based in Chicago, is a real estate investment trust that specializes in owning post-acute and long-term care skilled nursing facilities and other healthcare properties. Aviv is one of the largest owners of SNFs in the United States and has been in the business for over 30 years. The Company currently owns 278 properties that are triple-net leased to 38 operators in 29 states.
For more information about the Company, please visit our website at www.avivreit.com or contact: David J. Smith, Managing Director, Investor Relations & Capital Markets at 312-855-0930.
This press release may include forward-looking statements. Forward-looking statements can be identified by the use of words such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "intends," "continue" or similar terminology. These forward-looking statements are made based on our current expectations and beliefs concerning future events affecting us and are subject to uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed in or implied by these forward-looking statements. These uncertainties include, but are not limited to, uncertainties relating to the operations of our tenants, including those relating to reimbursement by government and other third-party payors, compliance with regulatory requirements and occupancy levels, regulatory, reimbursement and other changes in the healthcare industry, the performance and reputation of our tenants, our ability to successfully engage in strategic acquisitions and investments, the effect of general market, economic and political conditions, the availability and cost of capital, changes in tax laws and regulations affecting REITs and our ability to maintain our status as a REIT. Important factors that could cause actual results to differ materially from our expectations include those disclosed under "Risk Factors" and elsewhere in filings made by Aviv REIT, Inc. and Aviv Healthcare Properties Limited Partnership with the Securities and Exchange Commission.
- Health Care Industry