Item 1.01. Entry into Material Definitive Agreements.
Effective September 1, 2022, NHI entered into a 10th amendment (the "10th
Amendment") to the master lease dated October 17, 1991, as previously amended
(the "Master Lease") by and between NHI and NHC/OP, L.P., an affiliate of
National Healthcare Corporation ("NHC"). The 10th Amendment was entered into in
connection with the sale of seven skilled nursing facilities as described in
Item 8.01 below and increases the annual base rent due each year through the
expiration of the Master Lease on December 31, 2026. The annual base rent prior
to the 10th Amendment was $30.75 million and was increased to $34.25 million for
the year ended December 31, 2022, with credit given for rent paid under the 2013
Lease (as defined below) in 2022. In addition to the base rent, NHC will
continue to pay any additional rent and percentage rent as required by the
Master Lease which is estimated to be approximately $3.2 million for the year
ended December 31, 2022.
The foregoing description is qualified in its entirety by the full text of the
10th Amendment, a copy of which is filed as exhibit 10.1 to this report on Form
8-K and is incorporated herein by reference.
Item 8.01. Other Events.
Effective September 1, 2022, NHI sold seven skilled nursing facilities in New
Hampshire and Massachusetts to an unrelated third party for net cash proceeds of
approximately $43.7 million. These properties were leased to NHC pursuant to a
master lease agreement dated August 30, 2013 (the "2013 Lease") with an original
maturity date of August 31, 2028 that was terminated upon completion of the
sale. These properties were previously classified as assets held for sale with a
net book value of $30.1 million with rental income recognized totaling $1.8
million for the six months ended June 30, 2022.
Concurrently with the sale of these properties, NHI and NHC entered into the
10th Amendment to the Master Lease covering the remaining 35 properties leased
to NHC as described in Item 1.01 above and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
Exhibit Index
Number Exhibit
10.1 Amendment No. 10 To Master Agreement to Lease in HTML
104 Cover Page Interactive Data File (formatted as inline XBRL and contained in
Exhibit 101).
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