Transactions: Sabra REIT moves into acute-care space with Texas deals

DALLAS  – For the most part, Irvine, Calif.-based Sabra Health Care REIT Inc. (Nasdaq: SBRA) looks to grow its portfolio primarily through the acquisition of senior housing and memory care facilities, with a secondary focus on skilled nursing facilities (SNFs).

However, it also continues to search for “opportunistic” acquisitions of other types of healthcare real estate, including acute care hospitals.

The REIT recently closed on three of those “opportunistic” deals, as it spent more than $230 million, and earmarked another $66 million, as an investment in three Texas facilities operated by Dallas-based Forest Park Medical Center, an acute-care hospital operating company owned by physician-investors.

First, the REIT recently acquired the 54-bed Forest Park Medical Center – Frisco, an acute-care hospital owned and operated by physicians in the Dallas suburbs, for $119.8 million. The company says $10.5 million of the purchase price is being held in escrow for up to 20 months. Sabra assumed the existing long-term triple net lease with Forest Park Medical Center at Frisco LLC, resulting in annual lease revenues of $13.3 million and an initial yield on cash rent of 8.75 percent.

Second, Sabra entered into a $110 million mortgage loan secured by the 84-bed Forest Park Medical Center – Dallas, the Forest Park operating company’s first hospital. The loan has a three-year term and bears interest at a fixed rate of 8 percent. Sabre also has an option to purchase the facility securing the loan for up to $168 million.

And third, the REIT agreed to provide up to $66.8 million of construction financing to FPMC Fort Worth Realty Partners LP for the construction of a new 54-bed acute-care hospital in Fort Worth. The hospital campus, which will include a parking structure and an adjacent MOB, is slated for completion in mid-2014. According to Sabra, the loan has a three-year term with a fixed annual rate of 7.25 percent, with an option for a fourth year at 8 percent. The REIT will have an option to purchase the hospital and the parking structure starting a year after the facility opens and ending at the maturity date of the loan.

In a statement from the company, Sabra’s CEO and Chairman Rick Matros said the transactions mark “an important shift in our company’s profile.”