Texas 11 Skilled Nursing Portfolio

On July 30, 2015, GruenePointe Holdings, LLC, a Texas-based transitional medical facility investment company and owner of the Adora transitional care brand, acquired from a private seller for $130 Million and then closed on the sale and leaseback of ten Texas skilled nursing facilities (SNF) to MedEquities Realty Trust, Inc. In addition, GruenePointe has acquired another operating facility which it manages outside of the MedEquities transaction. Together, these facilities are the Texas 11 SNF Portfolio.

The facilities have been operational for 2-30 years and have all been approved for Government payments. Following the acquisition and over the remainder of 2015, OnPointe Health has been evaluating the current staff and implementing operational and process improvements. OnPointe believes the improvements will add 20% to the bottom line in 2016. The eleven facilities holds 1,142 state-licensed Medicaid beds and boast an annual revenue of $77,930,000.

The facilities are located in the following cities in Texas: San Antonio (two facilities), El Paso (two facilities), Graham, Brownwood, Mt. Pleasant, Kerens, Kemp. The facilities are leased on 15-year leases from MedEquities, with two 5-year extensions available to the Lessee. Financial performance has remained steady for the past five years, with 60% of the revenue coming from federal and state Government, 30% from private health insurance, and 10% fromprivate payors.