National Health Investors (NYSE: NHI) is accelerating its acquisition pipeline in an effort to grow its higher acuity memory care segment with new operator relationships.
To make the most of macroeconomic conditions favoring real estate investment trusts (REITs), NHI is seeking to acquire a range of properties as development remains muted, including high-acuity assisted living and memory care, according to NHI CEO Eric Mendelsohn.
NHI’s growth in memory care will continue to be “opportunistic” in nature, with the “right operators, in the right market with the right property and attractive pricing,” he added.
“High-acuity memory care is not for everybody,” Mendelsohn told Memory Care Business. “It has a high degree of staffing, liability and burnout.”
If you ask Mendelsohn, the industry is “entering a golden age of caring for people given the influx of baby boomer residents and rising acuity needs among older adults.”
This comes at a time in which Mendelsohn said it was a “perfect storm for real estate investment trusts,” echoing the aggressive acquisition and investment activity seen in recent years as ownership groups right-size portfolios and a bench of trusted operators.
The leader of the Murfreesboro, Tennessee-based REIT is confident in the company’s ability to find future investment opportunities and build new operator relationships. This follows what Mendelsohn said is a limited pool of buyers due to higher interest rates as private equity continues to use high leverage deals, compared to the “very low” leverage available to be offered by REITs.
“Sellers who were waiting to refinance have given up on refinancing, the refinancing rates are often the same or worse than our rates on a lease or other type of investment arrangement,” Mendelsohn said. “It’s a good market for us, and we’re taking advantage of that.”
As of May, NHI has invested $174.9 million with a flurry of acquisitions to start 2025, while evaluating a pipeline of roughly $264 million in future deals to its senior housing operating portfolio.
NHI builds bench strength with ‘next generation’ of operators
In 2025, NHI has started new relationships with senior living operators including Generations, Agemark Senior Living and Juniper Communities, all of which fit NHI’s criteria for operators in high acuity senior living. As Mendelsohn puts it, leaders with the company “drank a lot of coffee” to fuel many meetings with operators to find potential partnerships.
“This is a growth industry, but it’s one that you have to be careful with,” Mendelsohn said. “The next generation of operators is taking advantage of technology in a way that we could have only dreamed about a decade ago.”
NHI is actively converting existing properties in its portfolio from triple-net leases to RIDEA structures, while also evaluating acquisitions as RIDEA structures “right out of the gate” both with existing and new operating partners.
“Not everyone wants to sign up for a 10- or 15-year lease anymore,” Mendelsohn said. “SHOP opens up a whole new roster of operators and a whole new world of possibilities.”
Earlier this year, NHI acquired six memory care properties from Agemark Senior Living, retaining Agemark as the operator of those communities through a sale-lease back arrangement.
“There was alignment with NHI versus the private equity firms, generally speaking, which are more short-term minded and so that was an important piece for us—finding a long-term partner to continue to grow together with,” Agemark Co-CEO Forrest Westin said earlier this year.
The build-up of these three new operating relationships with Generations, Agemark and Juniper was years in the making, with Mendelsohn noting that NHI had been “courting them for many years,” before putting ink to paper.
“There are other factors that are less economic and more operational in nature that make them a good fit,” Mendelsohn said. “Is the market and real estate compelling, is the operator talented, and are they going to be able to manage properties that maximize resident care, happiness and a return on investment?”
Of the three new operating relationships, Mendelsohn said all firms were the ideal fit for NHI, being family-owned businesses with proven track records in high acuity senior living.
NHI prefers stand alone memory care or built-in memory care in assisted living, with many of the company’s existing senior living properties, those that are “right down the fairway” include assisted living buildings with 20 to 30 memory care units.
“You have to really pick your operators carefully and be as supportive as you can be,” Mendelsohn said. “As the population ages, we’re going to see more of that memory care demand.”
Supporting operators as staffing conditions evolve
Senior living providers in recent years have wrestled with various staffing challenges and are relying on new technology partners to help inform operations and drive strategic decision making in care delivery.
Due to the high-acuity needs of assisted living and memory care residents, Mendelsohn said NHI will continue to evaluate future operator partnerships based on a given operator’s ability to manage complex operations.
In NHI’s partnership with Bickford Senior Living, Mendelsohn noted the operator’s ability to track health care data points and create “more touch points” for residents at higher acuity for improving care and operations.
Looking ahead, Mendelsohn sees a clear need for both high acuity assisted living and memory care to meet new care demands of today’s senior living customers.
“My concern is: Do we have enough people to help with staffing, and do older adults have the ability to pay for that because it’s expensive and it isn’t often covered by Medicaid or health insurance,” Mendelsohn said.
To support operators, NHI is working directly with its bench to update technology and systems capable of handling complex acuity needs in assisted living and memory care. For example, a nurse call system, a once stationary pull-cord in a resident’s room is now integrated into applications viewable on a smartphone or tablet.
Operators have also adapted in-room ambient monitoring technology to alert care staff of resident falls, and this type of investment will be critical to the future of assisted living and memory care, Mendelsohn added, along with the integration of artificial intelligence-supported technology.
“It’s all very exciting and if operators can keep up with and maintain it, it’s going to be that golden age I spoke of,” Mendelsohn said.
