Sabra Acquires Transitional Care Portfolio for $41.0 Million; Exercises Purchase Option on Skilled Nursing Facility for $14.0 Million

IRVINE, Calif., Oct. 29, 2014 (GLOBE NEWSWIRE) -- Sabra Health Care REIT, Inc. ("Sabra," the "Company" or "we") (Nasdaq:SBRA) (Nasdaq:SBRAP) announced today two investments: the acquisition of a portfolio of three transitional care facilities in Oklahoma and the exercise of its purchase option on a skilled nursing facility in Austin, Texas. The transactions were funded with available cash and proceeds from our revolving credit facility. 

Oklahoma Portfolio

On October 29, 2014, we acquired three transitional care facilities with a total of 171 available beds (collectively, the "Oklahoma Portfolio") located in eastern and central Oklahoma for $41.0 million. Concurrently with the purchase, we entered into a triple-net master lease agreement with affiliates of the seller. The lease has an initial term of 10 years with two 5-year renewal options and provides for an annual rent escalator equal to 3.0%, resulting in annual lease revenues, determined in accordance with GAAP, of $4.0 million and an initial yield on cash rent of 8.5%.

Onion Creek

On October 21, 2014, we completed the purchase of a 125-bed skilled nursing facility ("Onion Creek") located in Austin, Texas, for $14.0 million. Sabra previously entered into an $11.0 million mortgage loan agreement (the "Onion Creek Mortgage Loan") secured by a first trust deed on Onion Creek with affiliates of Meridian Equity Investors, L.P. At closing, approximately $11.0 million of the sales proceeds were used to repay the Onion Creek Mortgage Loan, resulting in Sabra funding approximately an additional $3.0 million for the acquisition. The facility opened in 2011 and is operated by Senior Care Centers, LLC, which operates nursing facilities throughout Texas. The lease, which Sabra assumed at closing, has 10 years of initial term remaining with three 5-year renewal options and provides for an annual rent escalator equal to 2.75%. The lease results in annual lease revenues determined in accordance with GAAP of $1.4 million and an initial yield on cash rent of 9.0%.

Commenting on these investments, Rick Matros, CEO and Chairman, said, "The facilities in the Oklahoma Portfolio are transitional care skilled nursing facilities. In our view, they represent where the model is going with primarily private rooms servicing short stay post-surgical patients with revenues that are almost entirely Medicare and managed care. Onion Creek, a beautiful new skilled nursing facility, was one of our first transactions with Meridian and led us to partner with them on our development pipeline. We bring in two quality management teams with these investments as we continue to expand our tenant base."


Sabra Health Care REIT, Inc., a Maryland corporation, operates as a self-administered, self-managed real estate investment trust (a "REIT") that, through its subsidiaries, owns and invests in real estate serving the healthcare industry. Sabra leases properties to tenants and operators throughout the United States.


This release contains "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. These statements may be identified, without limitation, by the use of "expects," "believes," "intends," "should" or comparable terms or the negative thereof. Forward-looking statements in this release include all statements regarding our expectations concerning the Onion Creek and Oklahoma Portfolio acquisitions.

Our actual results may differ materially from those projected or contemplated by our forward-looking statements as a result of various factors, including, among others, the following: our dependence on Genesis HealthCare LLC ("Genesis"), the parent company of Sun Healthcare Group, Inc., until we are able to further diversify our portfolio; our dependence on the operating success of our tenants; the dependence of our tenants on reimbursement from governmental and other third-party payors; the significant amount of and our ability to service our indebtedness; covenants in our debt agreements that may restrict our ability to make investments, incur additional indebtedness and refinance indebtedness on favorable terms; increases in market interest rates; our ability to raise capital through equity and debt financings; the relatively illiquid nature of real estate investments; competitive conditions in our industry; the loss of key management personnel or other employees; the impact of litigation and rising insurance costs on the business of our tenants; uninsured or underinsured losses affecting our properties and the possibility of environmental compliance costs and liabilities; our ability to maintain our status as a REIT; compliance with REIT requirements and certain tax matters related to our status as a REIT; and other factors discussed from time to time in our news releases, public statements and/or filings with the Securities and Exchange Commission (the "SEC"), especially the "Risk Factors" sections of our Annual and Quarterly Reports on Forms 10-K and 10-Q. Forward-looking statements made in this press release are not guarantees of future performance, events or results, and you should not place undue reliance on these forward-looking statements, which speak only as of the date hereof. We assume no, and hereby disclaim any, obligation to update any of the foregoing or any other forward-looking statements as a result of new information or new or future developments, except as otherwise required by law.


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