NHI, LCS Form Joint Venture to Acquire Timber Ridge Life Plan Community in Washington for $133M

ISSAQUAH, Wash. — National Health Investors (NHI) has formed a joint venture with an affiliate of Life Care Services (LCS) to acquire and operate Timber Ridge at Talus, a continuing care retirement community (CCRC) in Issaquah. The buyers will acquire Timber Ridge from a joint venture between Westminster Capital and LCS for $133 million, exclusive of closing costs that are estimated to be approximately $2 million.

Originally built in 2008 and expanded in 2017, the property features 401 units, including 330 independent living apartments, 14 assisted living apartments, 12 memory care apartments and 45 skilled nursing beds. At the time of sale, the property was more than 95 percent occupied.

The joint venture consists of two parts: the property company and an operating company. The operating company will be capitalized with $3.2 million initially. NHI will own an 80 percent ownership interest in the property company and LCS will own the remaining 20 percent; NHI will own a 25 percent interest in the operating company and LCS will own 75 percent.

Additionally, NHI is contributing $43.2 million to the property company and $800,000 to the operating company for working capital. NHI has also agreed to provide financing to the property company in an amount equal to 60 percent of the purchase price, or $81 million, at an interest rate 5.75 percent. The financing includes the $60 million note NHI originally funded in 2015.

LCS is contributing $10.8 million to the property company and $2.4 million to the operating company for working capital, and NHI is providing a $5 million line of credit to the operating company.

The property company will rent the community to the operating company under a triple-net lease with an initial cash yield of 6.75 percent. The lease has a seven-year initial term with two five-year renewal options.