Murfreesboro, TN-based National Health Investors will complete its portfolio optimization efforts within the next couple of quarters, CEO and President Eric Mendelsohn said on Wednesday’s earnings call.
“We believe that the most difficult quarters will soon be behind us. We know that the recovery will take time and require that NHI continue to provide more support for operators,” he said.
Less than a year ago, NHI announced that it would be pruning underperforming assets, transitioning properties to new tenants and restructuring leases to move into a stronger financial position, Mendelsohn said. The real estate investment trust has completed the sale of 23 properties through January, for net proceeds of approximately $244 million; this amount includes 19 underperforming senior housing properties that sold for a collective $195 million.
Net income per diluted common share for the fourth quarter of 2021 was $0.14, compared with $0.83 for the same period in 2020. For the full year, net income per diluted common share was $2.44, compared with $4.14 in 2020.
“The year-over-year 12-month decline in net income per diluted common share was due primarily to $51.8 million impairment charges, $28 million in rent concessions, $1.4 million five months of Holiday rental non-payments and $5.4 million increase in non-cash stock based compensation expense,” Executive Vice President and Chief Financial Officer John Spaid said.
The amounts, he added, were partially offset by $11.2 million of gains from NHI’s completed sales of real estate during the year.
As of the end of January, NHI has unfunded commitments totaling approximately $109 million, which have an average yield of approximately 8.5%. The REIT said it expects to fund the majority of those commitments during 2022.
The fourth-quarter dividend of $0.90 per share was paid Jan. 31. NHI said it represents normalized funds from operations and funds available for distribution total dollar payout ratios of 84.8% and 89.9%, respectively.
The REIT’s board declared a first-quarter dividend of $0.90 per share for shareholders of record on March 31, payable May 6.
Jan. 31, NHI had $10 million outstanding under a $550 million revolver and $16.4 million in cash. Spaid said that the REIT did not issue any equity for its at-the-market program during the fourth quarter of 2021 and does not expect to issue equity during the first quarter of 2022.
“We continue to have approximately $416 million available to us under our ATM program,” Spaid said. “Our $800 million revolver and term loan credit facility matures in August of this year. We’re in the syndication process for a new $700 million revolver, and we’re targeting closing the facility in March.”
Read more about the earnings call and NHI’s portfolio optimization at McKnight’s Senior Living.
