National Health Investors Expands Senior Housing Portfolio with $74.3 Million Acquisition

NHI Acquires Four Senior Housing Properties for $74.3 Million

National Health Investors (NYSE:NHI) has announced a significant expansion of its Senior Housing Operating Portfolio (SHOP) with the acquisition of four senior housing properties. The transaction, totaling $74.3 million including transaction costs, encompasses 344 units across properties located in Oklahoma and Oregon.

Transaction Details and Financial Mechanics

The newly acquired communities are slated to be integrated into NHI's SHOP segment and will continue under the management of Compass Senior Living, an established operational partner. A notable aspect of the acquisition's funding mechanism involves the cancellation of a $9.5 million mortgage loan that carried an 8.5% interest rate. This strategic redeployment of capital from a higher-cost debt instrument into direct property ownership is designed to optimize portfolio returns.

These newly added assets are projected to generate an initial yield of approximately 7.5% after routine capital expenditures. This yield compares to NHI's reported Weighted Average Cost of Capital (WACC), which stood at 7.31% as of September 21, 2025, according to one source, while another indicated a WACC of 6.2%. NHI's Return on Invested Capital (ROIC) for the trailing twelve months is 7.26%.

Broader Investment Strategy and Financial Health

This acquisition contributes to NHI's robust year-to-date investment activity in 2025, which totals approximately $249.2 million at an impressive average initial yield of 8.0%. The company, a Real Estate Investment Trust (REIT) specializing in senior housing and medical investments, maintains a market capitalization of $3.79 billion.

NHI exhibits solid financial health, as evidenced by a Z-Score of 3.62 and a Piotroski F-Score of 7, both indicators of strong financial footing. For the trailing twelve months, the company reported revenues of $348.66 million, with a 3-year revenue growth rate of 5.2%. Operating margins remain strong at 53.34%, and net margins at 41%. Despite a slight year-over-year decline in operating cash flow growth of -0.9%, NHI's return on equity is healthy at 10.59%.

Its debt-to-equity ratio stands at 0.76, indicating a moderate level of leverage. NHI has a long history of consistent shareholder returns, having maintained dividend payments for 35 consecutive years, currently offering a 4.61% yield.

Analyst Perspectives and Future Outlook

Analyst firms have reacted positively to NHI's performance and strategic moves. Truist Securities recently raised its price target for NHI from $77 to $81, maintaining a Buy rating. Cantor Fitzgerald initiated coverage with an Overweight rating and a $90 price target. This positive sentiment is underscored by NHI's second-quarter 2025 earnings, which surpassed analysts' expectations with an EPS of $0.79 against a forecast of $0.7526, and revenue of $70.27 million exceeding the expected $67.73 million.

Looking ahead, NHI's investment pipeline remains active, with approximately $132.4 million under signed Letters of Intent (LOIs) at an average yield of about 8.1%. Additionally, the company is evaluating an incremental investment pipeline of approximately $278 million, excluding large portfolio deals. These ongoing investment efforts and strategic capital management position NHI for continued growth within the senior housing sector, driven by demographic trends and sustained demand for long-term care services.