Health Care REIT NHI Finding Value in Midwest
07/14/2016 | by Sarah Borchersen-Keto

Eric Mendelsohn, president and CEO of National Health Investors (NYSE: NHI), joined REIT.com for a CEO Spotlight video interview at REITWeek 2016: NAREIT’s Investor Forum at the Waldorf Astoria New York.

NHI’s portfolio includes independent, assisted and memory care communities, skilled nursing facilities, medical office buildings and specialty hospitals.

Mendelsohn described the senior housing cycle as “bifurcated.” Investors appear to be avoiding skilled nursing, he said, so cap rates are rising quickly in response.

The senior housing, assisted living, and memory care segments “are still stuck in the lower cap rate environment, especially in the coastal areas,” Mendelsohn added.

However, NHI is able to find “decent value” because of its focus on markets in the Midwest and the South, he said. Also, many of its deals originate from the company’s existing operators, he noted.

Meanwhile, Mendelsohn said NHI is seeing competition in Atlanta; Charleston, South Carolina; and outside of Chicago. He noted that NHI is taking measures to increase the curb appeal of its properties in those markets.

As part of its efforts to diversify its portfolio, NHI recently completed a deal with Acadia Healthcare Co., a national specialty hospital operator. “We’re hoping to do more business with them,” he said.

Medical office buildings are also on NHI’s radar.

“That’s a tough product to find right now. It seems to be priced to perfection, but we keep looking,” Mendelsohn said.