10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)
[ x ]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2014
[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________

Commission File Number 001-10822

National Health Investors, Inc.

(Exact name of registrant as specified in its charter)

Maryland	62-1470956
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
222 Robert Rose Drive, Murfreesboro, Tennessee	37129
(Address of principal executive offices)	(Zip Code)

(615) 890-9100

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each Class	Name of each exchange on which registered
Common stock, $.01 par value	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ x ] No [ ]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [ x ]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ x ] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files) Yes [ x ] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§292.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant's knowledge, in the definitive proxy or information statements incorporate by reference in Part III of this Form 10-K or any amendment to this Form 10-K [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer          [ x ]	Accelerated filer                      [ ]
Non-accelerated filer            [ ]	Smaller reporting company     [ ]
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ x ]

The aggregate market value of shares of common stock held by non-affiliates on June 30, 2014 (based on the closing price of these shares on the New York Stock Exchange) was approximately $1,970,533,000. There were 37,564,987 shares of the registrant’s common stock outstanding as of February 13, 2015.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s definitive proxy statement for its 2015 annual meeting of stockholders are incorporated by reference into Part III, Items 10, 11, 12, 13, and 14 of this Form 10-K.

Table of Contents

	Page
Part I.
Forward Looking Statements.	3
Item 1. Business.	4
Item 1A. Risk Factors.	13
Item 1B. Unresolved Staff Comments.	17
Item 2. Properties Owned or Associated with Mortgage Loan Investments.	18
Item 3. Legal Proceedings.	22
Item 4. Mine Safety Disclosures.	22
Part II.
Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities.	23
Item 6. Selected Financial Data.	25
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.	26
Item 8. Financial Statements and Supplementary Data.	52
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.	82
Item 9A. Controls and Procedures.	82
Item 9B. Other Information.	85
Part III.
Item 10. Directors, Executive Officers and Corporate Governance.	86
Item 11. Executive Compensation.	86
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	86
Item 13. Certain Relationships and Related Transactions.	86
Item 14. Principal Accountant Fees and Services.	86
Part IV.
Item 15. Exhibits and Financial Statement Schedules.	86
Signatures.	87
Exhibit Index.	88

2

PART I.

Forward Looking Statements

References throughout this document to NHI or the Company include National Health Investors, Inc., and its consolidated subsidiaries. In accordance with the Securities and Exchange Commission’s “Plain English” guidelines, this Annual Report on Form 10-K has been written in the first person. In this document, the words “we”, “our”, “ours” and “us” refer only to National Health Investors, Inc. and its consolidated subsidiaries and not any other person. Unless the context indicates otherwise, references herein to “the Company” include all of our consolidated subsidiaries.

This Annual Report on Form 10-K and other materials we have filed or may file with the Securities and Exchange Commission, as well as information included in oral statements made, or to be made, by our senior management contain certain “forward-looking” statements as that term is defined by the Private Securities Litigation Reform Act of 1995. All statements regarding our expected future financial position, results of operations, cash flows, funds from operations, continued performance improvements, ability to service and refinance our debt obligations, ability to finance growth opportunities, and similar statements including, without limitation, those containing words such as “may”, “will”, “believes”, “anticipates”, “expects”, “intends”, “estimates”, “plans”, and other similar expressions are forward-looking statements.

Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results in future periods to differ materially from those projected or contemplated in the forward-looking statements. Such risks and uncertainties include, among other things, the following risks described in more detail under the heading “Risk Factors” under Item 1A:

* We depend on the operating success of our tenants and borrowers for collection of our lease and interest income;

* We depend on the success of property development and construction activities, which may fail to achieve the operating results we expect;

* We are exposed to the risk that our tenants and borrowers may become subject to bankruptcy or insolvency proceedings;

* We are exposed to risks related to governmental regulations and payors, principally Medicare and Medicaid, and the effect that lower reimbursement rates would have on our tenants’ and borrowers’ business;

* We are exposed to the risk that the cash flows of our tenants and borrowers would be adversely affected by increased liability claims and liability insurance costs;

* We are exposed to risks related to environmental laws and the costs associated with liabilities related to hazardous substances;

* We are exposed to the risk that we may not be fully indemnified by our lessees and borrowers against future litigation;

* We depend on the success of our future acquisitions and investments;

* We depend on our ability to reinvest cash in real estate investments in a timely manner and on acceptable terms;

* We may need to incur more debt in the future, which may not be available on terms acceptable to us;

* We have covenants related to our indebtedness which impose certain operational limitations and a breach of those covenants could materially adversely affect our financial condition and results of operations;

* We are exposed to the risk that the illiquidity of real estate investments could impede our ability to respond to adverse changes in the performance of our properties;

* We are exposed to risks associated with our investments in unconsolidated entities, including our lack of sole decision-making authority and our reliance on the financial condition of other interests;

* We depend on revenues derived mainly from fixed rate investments in real estate assets, while a portion of our debt capital used to finance those investments bear interest at variable rates. This circumstance creates interest rate risk to the Company;

* We are exposed to the risk that our assets may be subject to impairment charges;

3

* We depend on the ability to continue to qualify for taxation as a real estate investment trust;

* We have ownership limits in our charter with respect to our common stock and other classes of capital stock which may delay, defer or prevent a transaction or a change of control that might involve a premium price for our common stock or might otherwise be in the best interests of our stockholders;

* We are subject to certain provisions of Maryland law and our charter and bylaws that could hinder, delay or prevent a change in control transaction, even if the transaction involves a premium price for our common stock or our stockholders believe such transaction to be otherwise in their best interests.

See the notes to the annual audited consolidated financial statements, and “Business” and “Risk Factors” under Item 1 and Item 1A therein for a further discussion of these and of various governmental regulations and other operating factors relating to the healthcare industry and the risk factors inherent in them. You should carefully consider these risks before making any investment decisions in the Company. These risks and uncertainties are not the only ones we face. There may be additional risks that we do not presently know of or that we currently deem immaterial. If any of the risks actually occur, our business, financial condition, results of operations, or cash flows could be materially adversely affected. In that case, the trading price of our shares of stock could decline and you may lose part or all of your investment. Given these risks and uncertainties, we can give no assurance that these forward-looking statements will, in fact, occur and, therefore, caution investors not to place undue reliance on them.

ITEM 1. BUSINESS

General

National Health Investors, Inc., is a self-managed real estate investment trust ("REIT") specializing in sale-leaseback, joint-venture, mortgage and mezzanine financing of need-driven and discretionary senior housing and medical investments. Our portfolio consists of real estate investments in independent, assisted and memory care communities, entrance-fee communities, senior living campuses, skilled nursing facilities, specialty hospitals and medical office buildings. Other investments include mortgages and notes, the preferred stock and marketable securities of other REITs, and a joint venture structured to comply with the provisions of the REIT Investment Diversification Empowerment Act of 2007 (“RIDEA”). Through this RIDEA joint venture, we invest in facility operations managed by independent third-parties. We fund our real estate investments primarily through: (1) cash flow, (2) debt offerings, including bank lines of credit and ordinary term debt, and (3) the sale of equity securities.

At December 31, 2014, our continuing operations consisted of investments in real estate and mortgage and other notes receivable involving 183 facilities located in 31 states. These investments involve 106 senior housing communities, 71 skilled nursing facilities, 4 hospitals, 2 medical office buildings and other notes receivable. These investments (excluding our corporate office of $900,000) consisted of properties with an original cost of approximately $1,987,949,000, rented under triple-net leases to 24 lessees, and $63,630,000 aggregate carrying value of mortgage and other notes receivable due from 15 borrowers.

All of our investments in real estate and mortgage loans secured by real estate are located within the United States. We are managed as one reporting unit, rather than multiple reporting units, for internal reporting purposes and for internal decision making. Therefore, we have concluded that we operate as a single segment. Information about revenues from our tenants and borrowers, a measure of our income, and total assets can be found in Item 8 of this Form 10-K.

Types of Facilities

Senior Housing Communities

As of December 31, 2014, our portfolio included 103 senior housing communities (“SHO”) leased to operators and mortgage loans secured by 3 SHOs. SHOs within our portfolio are either need-driven or discretionary for end users and consist of assisted living facilities, independent living facilities, entrance-fee communities and senior living campuses which are more fully described below.

Need-Driven Senior Housing

Assisted Living Facilities.As of December 31, 2014, our portfolio included 62 assisted living facilities (“ALF”) leased to operators and mortgage loans secured by 3 ALFs. ALFs are free-standing facilities that provide basic room and board functions for elderly residents. As residents typically receive assistance with activities of daily living such as bathing, grooming, memory care services and administering medication, we consider these facilities to be need-driven senior housing. On-site staff personnel are available to assist in minor medical needs on an as-needed basis. Operators of ALFs

4

are typically paid from private sources without assistance from government. ALFs may be licensed and regulated in some states, but do not require the issuance of a Certificate of Need (“CON”) as required for skilled nursing facilities.

Senior Living Campuses. As of December 31, 2014, our portfolio included 6 senior living campuses ("SLC") leased to operators. SLCs are either freestanding or multi-site campuses that include skilled nursing beds combined with an independent or assisted living facility that provides basic room and board functions for elderly residents. They may also provide assistance to residents with activities of daily living such as bathing, grooming and administering medication and as such are considered need-driven senior housing. On-site staff personnel are available to assist in minor medical needs on an as-needed basis. As the decision to transition to a senior living campus is typically more than a lifestyle choice and is usually driven by the need to receive some moderate level of care, we consider this facility type to be need-driven. Operators of SLCs are typically paid from private sources and from government programs such as Medicare and Medicaid for skilled nursing residents.

Discretionary Senior Housing

Entrance-Fee Communities. As of December 31, 2014, our portfolio included 7 entrance-fee communities ("EFC") leased to operators. Entrance-fee communities, frequently referred to as continuing care retirement communities or CCRCs, typically include a combination of detached homes, an independent living facility, an assisted living facility and a skilled nursing facility on one campus. These communities appeal to residents because there is no need to relocate when health and medical needs change. EFCs are classified as either Type A, B, or C depending upon the amount of healthcare benefits included in the entrance fee. “Type A” EFCs, or “Lifecare” communities include substantially all future healthcare costs. Communities providing a modified healthcare contract offering access to skilled nursing care but only paying for a maximum number of days are referred to as “Type B.” Finally, "Type C" EFCs, the type we recently added to our portfolio, are fee-for-service communities which do not provide any healthcare benefits and correspondingly have the lowest entrance fees. However, monthly fees may be higher to reflect the current healthcare components delivered to each resident. EFC licensure is state-specific, but generally the skilled nursing beds included in our EFC portfolio are subject to state licensure and regulation. As the decision to transition to an EFC is typically made as a lifestyle choice and not as the result of a pressing medical concern, we consider the decision to transition to a EFC to be discretionary.

Independent Living Facilities.As of December 31, 2014, our portfolio included 28 independent living facilities (“ILF”) leased to operators. ILFs offer specially designed residential units for the active and ambulatory elderly and provide various ancillary services for their residents including restaurants, activity rooms and social areas. Services provided by ILF operators are generally paid from private sources without assistance from government programs. ILFs may be licensed and regulated in some states, but do not require the issuance of a CON as required for skilled nursing facilities. As ILFs typically do not provide assistance with activities of daily living, we consider the decision to transition to an ILF facility to be discretionary.

Medical Facilities

As of December 31, 2014, our portfolio included 69 medical facilities leased to operators and mortgage loans secured by 8 medical facilities. The medical facilities within our portfolio consist of skilled nursing facilities, hospitals and medical office buildings, which are more fully described below.

Skilled Nursing Facilities.As of December 31, 2014, our portfolio included 64 skilled nursing facilities (“SNF”) leased to operators and mortgage loans secured by 7 SNFs. SNFs provide some combination of skilled and intermediate nursing and rehabilitative care, including speech, physical and occupational therapy. As the decision to utilize the services of a SNF is typically made as a the result of a pressing medical concern, we consider this to be a need driven medical facility. The operators of the SNFs receive payment from a combination of private pay sources and government programs such as Medicaid and Medicare. SNFs are required to obtain state licenses and are highly regulated at the federal, state and local level. Most SNFs must obtain a CON from the state before opening or expanding such facilities. Some SNFs also include assisted living beds.

Hospitals.As of December 31, 2014, our portfolio included 3 hospitals (“HOSP”) leased to operators and a mortgage loan secured by 1 hospital. Hospitals provide a wide range of inpatient and outpatient services, including acute psychiatric and rehabilitation services, and are subject to extensive federal, state and local legislation and regulation. Hospitals undergo periodic inspections regarding standards of medical care, equipment and hygiene as a condition of licensure. Services provided by hospitals are generally paid for by a combination of private pay sources and government programs. As the decision to utilize the services of a hospital is typically made as a the result of a pressing medical concern, we consider this to be a need driven medical facility.

5

Medical Office Buildings.As of December 31, 2014, our portfolio included 2 medical office buildings (“MOB”) leased to operators. MOBs are specifically configured office buildings whose tenants are primarily physicians and other medical practitioners. As the decision to utilize the services of an MOB is typically made as a the result of a pressing medical concern, we consider this to be a need driven medical facility. MOBs differ from conventional office buildings due to the special requirements of the tenants. Each of our MOBs is leased to one lessee, and is either physically attached to or located on an acute care hospital campus. The lessee sub-leases individual office space to the physicians or other medical practitioners. The lessee is responsible to us for the lease obligations of the entire building, regardless of their ability to sub-lease the individual office space.

Nature of Investments

Our investments are typically structured as acquisitions of properties through purchase-leaseback transactions, acquisitions of properties from other real estate investors, mortgage loans or, in operations through structures allowed by RIDEA. We have also provided construction loans for facilities for which we were already committed to provide long-term financing or for which the operator agreed to enter into a purchase option and lease with us upon completion of construction or after the facility is stabilized. The annual lease rates on our leases and the annual interest rates on our mortgage and construction loans ranged between 6.5% and 14% during 2014. We believe our lease and loan terms are competitive within our peer group. Typical characteristics of these transactions are as follows:

Leases. Our leases generally have an initial leasehold term of 10 to 15 years with one or more 5-year renewal options. The leases are "triple net leases" under which the tenant is responsible for the payment of all taxes, utilities, insurance premium costs, repairs and other charges relating to the ownership and operation of the properties, including required levels of capital expenditure each year. The tenant is obligated at its expense to keep all improvements, fixtures and other components of the properties covered by "all risk" insurance in an amount equal to at least the full replacement cost thereof, and to maintain specified minimal personal injury and property damage insurance, protecting us as well as the tenant. The leases also require the tenant to indemnify and hold us harmless from all claims resulting from the use and occupancy of each facility by the tenant and related activities, and to indemnify us against all costs related to any release, discovery, clean-up and removal of hazardous substances or materials on, or other environmental responsibility with respect to each facility.

Most of our existing leases contain annual escalators in rent payments. For financial statement purposes, rental income is recognized on a straight-line basis over the term of the lease. The acute care hospital and MOBs which we own and lease give the lessee an option to purchase the underlying property at the greater of i) our acquisition costs; ii) the then fair market value as established by independent appraisers or iii) the sum of the land costs, construction costs and any additional capital improvements made to the property by us. In addition, the acute care hospital and MOB leases contain a right of first refusal for the lessee if we receive an offer to buy the underlying leased property.

Some of the obligations under the leases are guaranteed by the parent corporation of the lessee, if any, or affiliates or individual principals of the lessee. In some leases, the third party operator will also guarantee some portion of the lease obligations. Some obligations are backed further by other collateral such as security deposits, machinery, equipment, furnishings and other personal property.

We monitor our triple-net lessee tenant credit quality and identify any material changes by performing the following activities:

• Obtaining financial statements on a monthly, quarterly and/or annual basis to assess the operational trends of our tenants and the financial position and capability of those tenants

• Calculating the operating cash flow for each of our tenants

• Calculating the lease service coverage ratio and other ratios pertinent to our tenants

• Obtaining property-level occupancy rates for our tenants

• Verifying the payment of taxes by our tenants

• Obtaining certificates of insurance for each tenant

• Obtaining financial statements of our lessee guarantors on an annual basis

• Conducting a periodic inspection of our properties to ascertain proper maintenance, repair and upkeep

• Monitoring those tenants with indications of continuing and material deteriorating credit quality through discussions with our executive management and Board of Directors

RIDEA Transactions. Our arrangement with Bickford Senior Living ("Bickford") is structured to be compliant with the provisions of RIDEA which permits NHI to receive rent payments through a triple-net lease between a property company and an operating company and gives NHI the opportunity to capture additional value on the improving performance of the operating

6

company through distributions to a Taxable REIT Subsidiary ("TRS"). Accordingly, the TRS holds our 85% equity interest in an unconsolidated operating company, which we do not control, and provides an organizational structure that will allow the TRS to engage in a broad range of activities and share in revenues that would otherwise be non-qualifying income under the REIT gross income tests.

Construction loans. From time to time, we also provide construction loans that by their terms convert to mortgage loans upon the completion of the construction of the facility. We may also obtain a purchase option to acquire the facility at a future date and lease the facility back to the operator. The terms of such construction loans are for a period which commences upon the closing of such loans and terminates upon the earlier of (a) the completion of the construction of the applicable facility or (b) a specific date. During the term of the construction loan, funds are usually advanced pursuant to draw requests made by the borrower in accordance with the terms and conditions of the loan. Interest is typically assessed on these loans at rates equivalent to the eventual mortgage rate upon conversion. In addition to the security of the lien against the property, we will generally require additional security and collateral in the form of either payment and performance completion bonds or completion guarantees by the borrower's parent, affiliates of the borrower or one or more of the individuals who control the borrower.

Mortgage loans. We have first mortgage loans with maturities of at least 5 years from inception with varying amortization schedules from interest only to fully amortizing. Most of the loans are at a fixed interest rate; however, some interest rates increase based on scheduled fixed rate increases. In most cases, the owner of the facility is committed to make minimum annual capital expenditures for the purpose of maintaining or upgrading their respective facility. Additionally, most of our loans are collateralized by first mortgage liens and corporate or personal guarantees.

We have made mortgage loans to borrowers secured by a second deed-of-trust where there is a process in place for the borrower to obtain long-term financing, primarily with a U.S. government agency, and where the historical financial performance of the underlying facility meets our loan underwriting criteria. The interest rates on our second mortgage loans currently range from 12% to 14% per annum.

Other notes receivable. We have provided a revolving credit facility to a borrower whose business is to provide bridge loans to owner-operators who are qualifying for long-term HUD financing secured by real estate. Our interest rate on the credit facility is 13.5%. We have provided loans to borrowers involved in the skilled nursing and senior housing industries who have pledged personal and business guarantees as security for the loans. The interest rates on these loans currently range from 8% to13.5%.

Investment in preferred stock and marketable securities of other healthcare REITs. We invest a portion of our funds in the preferred and common shares of other publicly-held REITs to ensure the substantial portion of our assets is invested for real estate purposes.

Competition and Market Conditions

We compete with other REITs, private equity funds and other investors (including, but not limited to, banks, insurance companies, and investment banks who market securities in mortgage funds) in the acquisition, leasing and financing of health care real estate.

Operators of our facilities compete on a local and regional basis with operators of facilities that provide comparable services. Operators compete for residents and/or patients and staff based on quality of care, reputation, physical appearance of facilities, services offered, family preference, physicians, staff and price. Competition is with independent operators as well as companies managing multiple facilities, some of which are substantially larger and have greater resources than the operators of our facilities. Some of these facilities are operated for profit while others are owned by governmental agencies or tax exempt not-for-profit organizations.

The SNFs which either secure our mortgage loans or we lease to operators receive the majority of their revenues from Medicare, Medicaid and other government programs. From time to time, these facilities have experienced Medicare and Medicaid revenue reductions brought about by the enactment of legislation to reduce government costs. In particular, the establishment of a Medicare Prospective Payment System (“PPS”) for SNF services to replace the cost-based reimbursement system significantly reduced Medicare reimbursement to SNF providers. While Congress subsequently took steps to mitigate the impact of PPS on SNFs, other federal legislative policies have been adopted and continue to be proposed that would reduce the growth rate of Medicare and/or Medicaid payments to SNFs. State Medicaid funding is not expected to keep pace with inflation according to industry studies. Any changes in government reimbursement methodology that reduce reimbursement to levels that are insufficient to cover the operating costs of our borrowers and lessees could adversely impact us.

7

Senior housing communities generally rely on private-pay residents who may be negatively impacted in an economic downturn. The success of these facilities is often impacted by the existence of comparable, competing facilities in a local market.

Operator Diversification

For the year ended December 31, 2014, approximately 26% of our portfolio revenue was from publicly-owned operators, 40% was from regional operators, 5% was from smaller operators and 29% from national chains which are privately owned. We consider the operator to be an important factor in determining the creditworthiness of the investment, and we generally have the right to approve any changes in operators.

For the year ended December 31, 2014, operators of facilities which provided more than 3% of our total revenues were (in alphabetical order): Bickford Senior Living; Brookdale Senior Living; Fundamental; Health Services Management; Holiday Retirement; Legend Healthcare; and National HealthCare Corp.

Major Customers

We have three operators, an affiliate of Holiday Retirement ("Holiday"), National HealthCare Corporation (“NHC”) and Bickford Senior Living ("Bickford"), from whom we individually derive at least 10% of our income from operations. Beginning in December 2014, a fourth major operator, Senior Living Communities, LLC (“Senior Living”), leased eight retirement communities from us which contractually obligates Senior Living in 2015 to make lease payments which aggregate to more than 17% of our total revenues for 2014.

Holiday

In December 2013 we acquired 25 independent living facilities from Holiday, an affiliate of Holiday Retirement. We have leased this portfolio to NH Master Tenant, LLC, a subsidiary of Holiday. Our tenant continues to operate the facilities pursuant to a management agreement with a Holiday-affiliated manager. The master lease term of 17 years began in December 2013 and provides for initial base rent of $31,915,000 plus annual escalators of 4.5% in the first 3 years and a minimum of 3.5% each year thereafter.

Of our total revenue from continuing operations, $43,817,000 (25%) was recorded as rental income from Holiday for the year endedDecember 31, 2014.

NHC

NHC is a publicly-held company and the lessee of our legacy properties. We lease 42 facilities to NHC comprised of 3 independent living facilities and 39 skilled nursing facilities (4 of which are subleased to other parties for whom the lease payments are guaranteed to us by NHC). These facilities are leased to NHC under the terms of an amended Master Lease Agreement dated October 17, 1991 ("the 1991 lease") which includes our 35 remaining legacy properties and a Master Lease Agreement dated August 30, 2013 ("the 2013 lease") which includes seven skilled nursing facilities acquired from ElderTrust of Florida, Inc. on August 31, 2013. Under the terms of the 1991 lease, base annual rental of $30,750,000 escalates by 4% of the increase, if any, in each facility’s revenue over a 2007 base year. Similarly, the 2013 lease provides for base annual rental of $3,450,000 plus percentage rent equal to 4% of the increase, if any, in each facility's annual revenue over a 2014 base year.

Of our total revenue from continuing operations, $36,446,000 (21%), $34,756,000 (29%) and $33,056,000 (35%) in 2014, 2013 and 2012, respectively, were derived from the two lease agreements with NHC.

NHC owned 1,630,462 shares of our common stock at December 31, 2014. The chairman of our board of directors is also a director on NHC’s board.

Bickford

As of December 31, 2014, we owned an 85% equity interest and an affiliate of Bickford, Sycamore Street, LLC, owned a 15% equity interest in our consolidated subsidiary ("PropCo") which owns 31 assisted living/memory care facilities. The facilities are leased to an operating company, ("OpCo"), in which we retain a non-controlling 85% ownership interest. Our joint venture is structured to comply with the provisions of RIDEA.

The current annual contractual rent from OpCo to PropCo is $22,595,000, plus fixed annual escalators. During the quarter ended December 31, 2014, PropCo completed construction and received certificates of occupancy on one assisted living facility

8

which had been under development. Under the terms of the current development lease agreement, PropCo receives rent of 9% on the total amount of development costs, including land, which totaled $7,811,000 at December 31, 2014.

Of our total revenue from continuing operations, $21,421,000 (12%), $14,586,000 (12%) and $5,164,000 (6%) were recorded as rental income from Bickford for the years ended December 31, 2014, 2013, and 2012, respectively.

Senior Living Communities

On December 17, 2014, we acquired a portfolio of eight retirement communities (the “Senior Living Portfolio”) with a total of 1,671 units from Health Care REIT, Inc. and certain of its affiliates for a cash purchase price of $476,000,000. The Senior Living Portfolio includes 7 entrance-fee communities and 1 senior living campus.

We have leased the Senior Living Portfolio under a triple-net master lease with an affiliate of Senior Living which will continue to manage the facilities. The 15-year master lease contains two 5-year renewal options and provides for year one cash rent of $31,000,000, subject to annual escalators of 4% in years two through four and 3% thereafter.

In connection with the Senior Living acquisition, we provided a $15,000,000 revolving line of credit to Senior Living, the maturity of which mirrors the term of the master lease. Borrowings will be used primarily to finance construction projects within the Senior Living Portfolio, including building additional units. Amounts outstanding under the facility, $2,816,000 at December 31, 2014, bear interest at an annual rate equal to the 10-year U.S. Treasury rate, 2.17% at December 31, 2014, plus 6%.

Commitments and Contingencies

The following table summarizes information as of December 31, 2014 related to our outstanding commitments and contingencies which are more fully described in the notes to the consolidated financial statements, included herein.

	Asset Class	Type	Total		Funded			Remaining
Commitments:
Senior Living Communities	SHO	Revolving Credit	$	15,000,000	$	(2,816,000	)	$	12,184,000
Capital Funding Group	Mezz. Note	Revolving Credit	$	15,000,000	$	(15,000,000	)	$	—
Bickford Senior Living	SHO	Construction	$	9,000,000	$	(7,811,000	)	$	1,189,000
Chancellor Health Care	SHO	Construction	$	8,000,000	$	(4,584,000	)	$	3,416,000
Kentucky River Medical Center	Hospital	Renovation	$	8,000,000	$	(7,583,000	)	$	417,000
Santé Partners	SHO	Renovation	$	3,500,000	$	(2,621,000	)	$	879,000
Prestige Senior Living	SHO	Renovation	$	2,000,000	$	(1,555,000	)	$	445,000
Holiday Retirement	SHO	Renovation	$	1,500,000	$	(1,126,000	)	$	374,000
Senior Living Management	SHO	Renovation	$	700,000	$	(13,000	)	$	687,000
Sycamore Street (Bickford affiliate)	SHO	Revolving Credit	$	500,000	$	(500,000	)	$	—
Contingencies:
Prestige Senior Living	SHO	Lease Inducement	$	6,390,000	$	—		$	6,390,000
Sycamore Street (Bickford affiliate)	SHO	Letter-of-credit	$	3,550,000	$	—		$	3,550,000
Discovery Senior Living	SHO	Lease Inducement	$	2,500,000	$	—		$	2,500,000
Santé Partners	Hospital	Loan	$	2,000,000	$	—		$	2,000,000
Santé Partners	SHO	Lease Inducement	$	2,000,000	$	—		$	2,000,000

Sources of Revenues

General. Our revenues are derived primarily from rental income, mortgage and other note interest income and income from our other investments, substantially all of which are in the securities of other healthcare REITs. During 2014, rental income was $166,279,000 (94%), interest income from mortgages and other notes was $7,013,000 (4%) and income from our other investments was $4,217,000 (2%) of total revenue from continuing operations of $177,509,000. Our revenues depend on the operating success of our facility operators whose source and amount of revenues are determined by (i) the licensed beds or other capacity of the facility, (ii) the occupancy rate of the facility, (iii) the extent to which the services provided at each facility are utilized by the patients, (iv) the mix of private pay, Medicare and Medicaid patients at the facility, and (v) the rates paid by private paying patients and by the Medicare and Medicaid programs.

9

Governmental and other concerns regarding health care costs have and may continue to result in significant downward pressure on payments to health care facilities, and there can be no assurance that future payment rates for either governmental or private health care plans will be sufficient to cover cost increases in providing services to patients. Any changes in reimbursement policies which reduce reimbursement to levels that are insufficient to cover the cost of providing patient care have had and could continue to have an adverse effect on revenues of our lessees and borrowers and thereby adversely affect those lessees' and borrowers' abilities to make their lease or debt payments to us. Failure of the lessees or borrowers to make their lease or debt payments would have a direct and material adverse impact on us.

Medicare and Medicaid. A significant portion of the revenue of our SNF lessees and borrowers is derived from government funded reimbursement programs, such as Medicare and Medicaid. Reimbursement under these programs is subject to periodic payment review and other audits by federal and state authorities. Medicare is uniform nationwide and reimburses skilled nursing centers under a Prospective Payment System (“PPS”) which is based on a predetermined, fixed amount. PPS was instituted as mandated by the Balanced Budget Act of 1997 and became effective July 1, 1998. PPS is an acuity based classification system that uses nursing and therapy indexes adjusted by geographical wage indexes to calculate per diem rates for each Medicare patient. Payment rates are updated annually and are generally adjusted each October when the federal fiscal year begins. The current acuity classification system is named Resource Utilization Groups IV (“RUGs IV”) and was effective October 1, 2010. PPS as implemented in 1998 had an adverse impact on the healthcare industry and our lessees’ and borrowers’ business by decreasing payments materially, which adversely impacted our business. Refinements in the form of temporary add-ons provided some relief until October 1, 2002. Since then, annual market basket (inflationary) increases have continued to improve payments; however, other federal legislative policies have been adopted and continue to be proposed that could reduce Medicare payments to nursing facilities. For example, the Centers for Medicare and Medicaid Services ("CMS") announced the Skilled Nursing Facilities – PPS final rule for fiscal year 2012 which cut Medicare payments to SNF operators by a net 11.1% beginning October 1, 2011. CMS announced the final rule for fiscal 2013 that increased Medicare payments to SNF operators by a net 1.8% for the fiscal year beginning October 1, 2012. CMS announced a final rule outlining a 1.4% increase in their Medicare reimbursement for fiscal 2014 beginning on October 1, 2013. CMS announced a final rule that increased Medicare payment to SNF operators by a net 2% for the fiscal year beginning October 1, 2014. The failure of Congress to agree on spending reductions to meet long-term deficit goals would trigger automatic spending cuts of 2% to Medicare.

RUGs IV incorporates changes to PPS that significantly altered how SNFs are paid for rendering care. Some examples are as follows:

• A shift to 66 payment categories from 53 payment categories;

• Changes related to assessment reference dates and qualifiers that will significantly reduce utilization of rehabilitation and extensive service categories;

• Modification to therapy services related to estimating treatments and utilization of concurrent therapy that will likely result in RUG classifications at much lower levels of therapy than previous results; and

• Adjustments related to assistance with activities of daily living (ADLs) and an increased emphasis on ADL scores in the nursing case mix indices and related RUG payment rates.

Medicaid is a joint federal and state program designed to provide medical assistance to “eligible needy persons.” Medicaid programs are operated by state agencies that adopt their own medical reimbursement methodology and standards. Payment rates and covered services vary from state to state. In many instances, revenues from Medicaid programs are insufficient to cover the actual costs incurred in providing care to those patients. State Medicaid plans subject to budget constraints are of particular concern to us given the repeal of the Boren Amendment by the Balanced Budget Act of 1997. The Boren Amendment provided fair reimbursement protection to nursing facilities. Changes in federal funding coupled with state budget problems have produced an uncertain environment. Industry studies predict the Medicaid crisis will continue with states’ required contribution to Medicare Part D and anticipated budget deficits. States will more than likely be unable to keep pace with nursing center inflation. States are under pressure to pursue other alternatives to long term care such as community and home-based services. Furthermore, several of the states in which we have investments have actively sought to reduce or slow the increase of Medicaid spending for nursing home care.

Medicare and Medicaid programs are highly regulated and subject to frequent and substantial changes resulting from legislation, adoption of rules and regulations and administrative and judicial interpretations of existing law. Moreover, as health care facilities have experienced increasing pressure from private payors attempting to control health care costs, reimbursement from private payors has in many cases effectively been reduced to levels approaching those of government payors. Healthcare reimbursement will likely continue to be of significant importance to federal and state authorities. We cannot make any assessment as to the

10

ultimate timing or the effect that any future legislative reforms may have on our lessees’ and borrowers’ costs of doing business and on the amount of reimbursement by government and other third-party payors. There can be no assurance that future payment rates for either government or private payors will be sufficient to cover cost increases in providing services to patients. Any changes in reimbursement policies which reduce reimbursement to levels that are insufficient to cover the cost of providing patient care could adversely affect the operating revenues of our SNF and hospital lessees and borrowers, and thereby adversely affect their ability to make their lease or debt payments to us. Failure of our lessees and borrowers to make their scheduled lease and loan payments to us would have a direct and material adverse impact on us.

Government Regulation

Licensure and Certification. The health care industry is highly regulated by federal, state and local law and is directly affected by state and local licensing requirements, facility inspections, state and federal reimbursement policies, regulations concerning capital and other expenditures, certification requirements and other such laws, regulations and rules. Sanctions for failure to comply with these regulations and laws include (but are not limited to) loss of licensure, fines and loss of certification to participate in the Medicare and Medicaid programs, as well as potential criminal penalties. The failure of any lessee or borrower to comply with such laws, requirements and regulations could affect their ability to operate the facility or facilities and could adversely affect such lessee's or borrower's ability to make lease or debt payments to us.

In the past several years, due to rising health care costs, there has been an increased emphasis on detecting and eliminating fraud and abuse in the Medicare and Medicaid programs. Payment of any consideration in exchange for referral of Medicare and Medicaid patients is generally prohibited by federal statute, which subjects violators to severe penalties, including exclusion from the Medicare and Medicaid programs, fines and even prison sentences. In recent years, both federal and state governments have significantly increased investigation and enforcement activity to detect and punish wrongdoers. In addition, legislation has been adopted at both state and federal levels which severely restrict the ability of physicians to refer patients to entities in which they have a financial interest.

It is anticipated that the trend toward increased investigation and enforcement activity in the area of fraud and abuse, as well as self-referral, will continue in future years. Certain of our investments are with lessees or borrowers which are partially or wholly owned by physicians. In the event that any lessee or borrower were to be found in violation of laws regarding fraud and abuse or self-referral, that lessee's or borrower's ability to operate the facility could be jeopardized, which could adversely affect the lessee's or borrower's ability to make lease or debt payments to us and thereby adversely affect us.

Certificates of Need. The SNFs and hospitals in which we invest are also generally subject to state statutes which may require regulatory approval in the form of a CON prior to the construction or expansion of facilities to accommodate new beds (or addition of new beds to existing facilities), the addition of services or certain capital expenditures. CON requirements are not uniform throughout the United States and are subject to change. We cannot predict the impact of regulatory changes with respect to CONs on the operations of our lessees and borrowers; however, in our primary market areas, a significant reduction in new construction of long-term care beds has occurred.

Investment Policies

Our investment objectives are (i) to provide consistent and growing current income for distribution to our stockholders through investments primarily in health care related facilities or in the operations thereof through independent third-party management, (ii) to provide the opportunity to realize capital growth resulting from appreciation, if any, in the residual value of our portfolio properties, and (iii) to preserve and protect stockholders' capital through a balance of diversity, flexibility and liquidity. There can be no assurance that these objectives will be realized. Our investment policies include making investments in real estate, mortgage and other notes receivable, the securities of other publicly-held REITs, and joint ventures structured to comply with the provisions of RIDEA.

As described in Item 7 and in the notes to the consolidated financial statements, included herein, we have funded or made commitments to fund new investments in real estate and loans since January 1, 2014 totaling $780,453,000, and we anticipate making additional investments in 2015 that meet our underwriting criteria. In making new investments, we consider such factors as (i) the geographic area and type of property, (ii) the location, construction quality, condition and design of the property, (iii) the current and anticipated cash flow and its adequacy to meet operational needs, and lease or mortgage obligations to provide a competitive income return to our investors, (iv) the growth, tax and regulatory environments of the communities in which the properties are located, (v) occupancy and demand for similar facilities in the same or nearby communities, (vi) the quality, experience and creditworthiness of the management operating the facilities located on the property and (vii) the mix of private and government-sponsored residents. There can be no assurances that investments meeting our standards regarding these attributes will be found or closed.

11

We will not, without the approval of a majority of the Board of Directors, enter into any joint venture relationships with or acquire from or sell to any director, officer or employee of NHI, or any affiliate thereof, as the case may be, any of our assets or other property.

The Board of Directors, without the approval of the stockholders, may alter our investment policies if it determines that such a change is in our best interests and our stockholders’ best interests. The methods of implementing our investment policies may vary as new investment and financing techniques are developed or for other reasons.

Future investments in health care related facilities or businesses may utilize borrowed funds or issuance of equity when it is advisable in the opinion of the Board of Directors. We may negotiate lines of credit or arrange for other short or long-term borrowings from lenders. We may arrange for long-term borrowings from institutional investors or through public offerings. We have previously invested and may in the future invest in properties subject to existing loans or secured by mortgages, deeds of trust or similar liens with favorable terms or in mortgage investment pools.

Executive Officers of the Company

The table below sets forth the name, position and age of each of our executive officers. Each executive officer is appointed by the Board of Directors, serves at its pleasure and holds office for a term of one year. There is no “family relationship” among any of the named executive officers or with any director. All information is given as of February 13, 2015:

Name	Position	Age
J. Justin Hutchens	President and Chief Executive Officer	40
Roger R. Hopkins	Chief Accounting Officer	53
Kristin S. Gaines	Chief Credit Officer	43
Kevin Pascoe	Executive Vice President Investments	34
Eric Mendelsohn	Executive Vice President Corporate Finance	53

J. Justin Hutchens joined NHI in February 2009 as President and COO. Pursuant to a succession plan, in March 2011 he was appointed CEO. Prior to joining NHI, Mr. Hutchens acquired 15 years of senior care operations experience. His background includes multi-site management with assisted living and skilled nursing facilities (1997 - 2003). He has national operating experience (2003 -2009) as the Senior Vice-President and COO of Summerville Senior Living and Executive Vice-President and COO of Emeritus Senior Living (NYSE: ESC). Mr. Hutchens holds a Master of Science in Management from Regis University and a Bachelor of Science in Human Services from the University of Northern Colorado. He was awarded Executive Certificates in Measurement and Control of Organizational Performance from the University of Michigan, and Strategy and Innovation from the MIT Sloan School of Management.

Roger R. Hopkins joined NHI in 2006 when he was named Chief Accounting Officer in December 2006. He has over 30 years of public accounting and financial management experience. Until 2006, he was a partner in the Tennessee regional accounting firm of Rodefer Moss & Co, PLLC and, previously, was a senior manager in the Nashville, Tennessee office of Deloitte & Touche. Mr. Hopkins received a Bachelor of Science in Accounting from Tennessee Technological University in 1982 and is a Certified Public Accountant.

Kristin S. Gaines was appointed NHI’s Chief Credit Officer in February 2010. She joined NHI in 1998 as a Credit Analyst. During her tenure with NHI, Ms. Gaines has had a progressive career in the areas of finance and operations. Her experience has resulted in a breadth of expertise in underwriting, portfolio oversight and real estate finance. Ms. Gaines holds a MBA and a Bachelor of Business Administration in Accounting from Middle Tennessee State University.

Kevin Pascoe joined National Health Investors in June 2010. Mr. Pascoe oversees NHI’s portfolio of assets, relationship management with existing tenants and conducts operational due diligence on NHI’s new investment opportunities.He has over 10 years of health care real estate background including his experience with General Electric - Healthcare Financial Services (2006 – 2010) where he most recently served as a Vice-President. With GE HFS he moved up through the organization while working on various assignments including relationship management, deal restructuring, and special assets. He also was awarded an assignment in the GE Capital Global Risk Rotation Program. Mr. Pascoe holds a Master of Business Administration and a Bachelor of Business Administration in Economics from Middle Tennessee State University.

Eric Mendelsohn joined NHI in January 2015. He has over 15 years of healthcare real estate and financing experience. Previously, Mr. Mendelsohn was with Emeritus Senior Living for 9 years, most recently as a Senior Vice President of Corporate

12

Development where he was responsible for the financing and acquisition of assisted living properties, home health care companies, administration of joint venture relationships  and executing corporate finance strategies. Prior to Emeritus, Mr. Mendelsohn was with the University of Washington as a Transaction Officer where he worked on the development, acquisition and financing of research, clinic and medical properties. Prior to that, Mr. Mendelsohn was a practicing transaction attorney, representing lenders and landlords. Mr. Mendelsohn has a BS from American University in International Relations, a Law Degree from Pepperdine University, and a Masters (LLM) in Banking and Finance from Boston University. Mr. Mendelsohn is a member of the Florida and Washington State Bar Associations.

We have a staff of 12, all serving in our corporate office in Murfreesboro, TN. Essential services such as internal auditing, tax compliance, information technology and legal services are outsourced to third-party professional firms.

Investor Information

We publish our annual report on Form 10-K, quarterly reports on Form 10-Q, quarterly Supplemental Information, current reports on Form 8-K, and press releases to our website at www.nhireit.com. We have a policy of publishing these on the website within two (2) business days after public release or filing with the SEC.

We also maintain the following documents on our web site:

▪ The NHI Code of Ethics and Standards of Conduct. This has been adopted for all employees, officers and directors of the Company. The website will also disclose whether there have been any amendments or waivers to the Code of Ethics and Standards of Conduct. To date there have been none.

▪ Information on our “NHI Valuesline” which allows all interested parties to communicate with NHI executive officers and directors. The toll free number is 877-880-2974 and the communications may be made anonymously, if desired.

▪ The NHI Restated Audit Committee Charter.

▪ The NHI Compensation Committee Charter.

▪ The NHI Nomination and Corporate Governance Committee Charter.

We will furnish, free of charge, a copy of any of the above documents to any interested investor upon receipt of a written request.

Our transfer agent is Computershare. Computershare will assist registered owners with the NHI Dividend Reinvestment plan, change of address, transfer of ownership, payment of dividends, replacement of lost checks or stock certificates. Computershare’s contact information is: Computershare Trust Company, N.A., P.O. Box 43078, Providence, RI 02940-3078. The toll free number is 800-942-5909 and the website is www.computershare.com.

The Annual Stockholders’ meeting will be held at 8:00 a.m. local time on Thursday, May 7, 2015 at Stones River Country Club, 1830 NW Broad Street, Murfreesboro, TN.

ITEM 1A. RISK FACTORS

We depend on the operating success of our tenants and borrowers for collection of our lease and interest income.

Revenues to operators of our facilities are primarily driven by occupancy, Medicare and Medicaid reimbursement and private pay rates. Revenues from government reimbursement have, and may continue to, come under pressure due to reimbursement cuts and from widely-publicized federal and state budget shortfalls and constraints. Periods of weak economic growth in the U.S. which affect housing sales, investment returns and personal incomes may adversely affect senior housing occupancy rates. Expenses for the facilities are driven by the costs of labor, food, utilities, taxes, insurance and rent or debt service. Liability insurance and staffing costs continue to increase for our operators. To the extent any decrease in revenues and/or any increase in operating expenses results in a facility not generating enough cash to make scheduled payments to us, our revenues, net income and funds from operations would be adversely affected. Such events and circumstances would cause us to evaluate whether there was an impairment of the real estate or mortgage loan that should be charged to earnings. Such impairment would be measured as the amount by which the carrying amount of the asset exceeded its fair value. Consequently, we might be unable to maintain or increase our current dividend and the market price of our stock may decline.

13

We depend on the success of property development and construction activities, which may fail to achieve the operating results we expect.

When we decide to invest in the renovation of an existing property or in the development of a new property, we make assumptions about the future potential cash flows of that property. We estimate our return based on expected occupancy, rental rates and future capital costs. If our projections prove to be inaccurate due to increased capital costs, lower occupancy or other factors, our investment in that property may not generate the cash flow we expected.

We are exposed to the risk that our tenants and borrowers may not be able to meet the rent, principal and interest or other payments due us, which may result in an operator bankruptcy or insolvency, or that an operator might become subject to bankruptcy or insolvency proceedings for other reasons.

Although our operating lease agreements provide us the right to evict an operator, demand immediate payment of rent and exercise other remedies, and our mortgage loans provide us the right to terminate any funding obligations, demand immediate repayment of principal and unpaid interest, foreclose on the collateral and exercise other remedies, the bankruptcy laws afford certain rights to a party that has filed for bankruptcy or reorganization. An operator in bankruptcy may be able to limit or delay our ability to collect unpaid rent in the case of a lease or to receive unpaid principal and/or interest in the case of a mortgage loan and to exercise other rights and remedies. We may be required to fund certain expenses (e.g. real estate taxes, maintenance and capital improvements) to preserve the value of a facility, avoid the imposition of liens on a facility and/or transition a facility to a new operator. In some instances, we have terminated our lease with an operator and leased the facility to another operator. In some of those situations, we provided working capital loans to, and limited indemnification of, the new operator. If we cannot transition a leased facility to a new operator, we may take possession of that facility, which may expose us to certain successor liabilities. Should such events occur, our revenue and operating cash flow may be adversely affected.

We are exposed to risks related to governmental regulations and payors, principally Medicare and Medicaid, and the effect that lower reimbursement rates would have on our tenants’ and borrowers’ business.

Our operators’ businesses are affected by government reimbursement and private payor rates. To the extent that any of our facilities receive a significant portion of their revenues from governmental payors, primarily Medicare and Medicaid, such revenues may be subject to statutory and regulatory changes, retroactive rate adjustments, recovery of program overpayments or set-offs, administrative rulings, policy interpretations, payment or other delays by fiscal intermediaries, government funding restrictions (at a program level or with respect to specific facilities) and interruption or delays in payments due to any ongoing governmental investigations and audits at such facilities. In recent years, governmental payors have frozen or reduced payments to health care providers due to budgetary pressures. Such reductions in Medicare reimbursement will have an adverse effect on the financial operations of our borrowers and lessees who operate SNFs. Changes in health care reimbursement will likely continue to be of paramount importance to federal and state authorities. We cannot make any assessment as to the ultimate timing or effect any future legislative reforms may have on the financial condition of the health care industry. There can be no assurance that adequate reimbursement levels will continue to be available for services provided by any facility operator, whether the facility receives reimbursement from Medicare, Medicaid or private payors. Significant limits on the scope of services reimbursed and on reimbursement rates and fees could have a material adverse effect on an operator’s liquidity, financial condition and results of operations, which could adversely affect the ability of an operator to meet its obligations to us. In addition, the replacement of an operator that has defaulted on its lease or loan could be delayed by the approval process of any federal, state or local agency necessary for the transfer of the facility or the replacement of the operator licensed to manage the facility.

We are exposed to the risk that the cash flows of our tenants and borrowers would be adversely affected by increased liability claims and liability insurance costs.

ALF and SNF operators have experienced substantial increases in both the number and size of patient care liability claims in recent years, particularly in the states of Texas and Florida. As a result, general and professional liability costs have increased and may continue to increase. Nationwide, long-term care liability insurance rates are increasing because of large jury awards in states like Texas and Florida. Both Texas and Florida have now adopted SNF liability laws that modify or limit tort damages. Despite some of these reforms, the long-term care industry overall continues to experience very high general and professional liability costs. Insurance companies have responded to this claims crisis by severely restricting their capacity to write long-term care general and professional liability policies. No assurance can be given that the climate for long-term care general and professional liability insurance will improve in any of the foregoing states or any other states where the facility operators conduct business. Insurance companies may continue to reduce or stop writing general and professional liability policies for ALFs and SNFs. Thus, general and professional liability insurance coverage may be restricted, very costly or not available, which may adversely affect the facility operators’ future operations, cash flows and financial condition and may have a material adverse effect on the facility operators’ ability to meet their obligations to us.

14

We are exposed to risks related to environmental laws and the costs associated with liabilities related to hazardous substances.

Under various federal and state laws, owners or operators of real property may be required to respond to the release of hazardous substances on the property and may be held liable for property damage, personal injuries or penalties that result from environmental contamination. These laws also expose us to the possibility that we may become liable to reimburse the government for damages and costs it incurs in connection with the contamination. Generally, such liability attaches to a person based on the person’s relationship to the property. Our tenants or borrowers are primarily responsible for the condition of the property and since we are a passive landlord, we do not “participate in the management” of any property in which we have an interest. Moreover, we review environmental site assessment of the properties that we own or encumber prior to taking an interest in them. Those assessments are designed to meet the “all appropriate inquiry” standard, which qualifies us for the innocent purchaser defense if environmental liabilities arise. Based upon such assessments, we do not believe that any of our properties are subject to material environmental contamination. However, environmental liabilities, including mold, may be present in our properties and we may incur costs to remediate contamination, which could have a material adverse effect on our business or financial condition.

We are exposed to the risk that we may not be fully indemnified by our lessees and borrowers against future litigation.

Our leases require that the lessee name us as an additional insured party on the tenant’s insurance policy in regard to claims made for professional liability or personal injury. The leases also require the tenant to indemnify and hold us harmless for all claims resulting from the occupancy and use of each facility. We cannot give any assurance that these protective measures will completely eliminate any risk to us related to future litigation, the costs of which could have a material adverse impact on us.

We depend on the success of our future acquisitions and investments.

We are exposed to the risk that our future acquisitions may not prove to be successful. We could encounter unanticipated difficulties and expenditures relating to any acquired properties, including contingent liabilities, and newly acquired properties might require significant management attention that would otherwise be devoted to our existing business. If we agree to provide construction funding to an operator and the project is not completed, we may need to take steps to ensure completion of the project or we could lose the property. Moreover, if we issue equity securities or incur additional debt, or both, to finance future acquisitions, it may reduce our per share financial results. These costs may negatively affect our results of operations.

We depend on our ability to reinvest cash in real estate investments in a timely manner and on acceptable terms.

From time to time, we will have cash available from (1) the proceeds of sales of our securities, (2) principal payments on our notes receivable and (3) the sale of properties, including non-elective dispositions, under the terms of master leases or similar financial support arrangements. We must reinvest these proceeds, on a timely basis, in health care investments or in qualified short-term investments. We compete for real estate investments with a broad variety of potential investors. This competition for attractive investments may negatively affect our ability to make timely investments on terms acceptable to us. Delays in acquiring properties may negatively impact revenues and the amount of distributions to stockholders.

We may need to incur more debt in the future, which may not be available on terms acceptable to us.

We operate with a policy of incurring debt when, in the opinion of our Board of Directors, it is advisable. Currently, we believe that our current liquidity, availability under our unsecured credit facility, and our capacity to service additional debt will enable us to meet our obligations, including dividends, and continue to make investments in healthcare real estate. While we currently have a very low debt ratio, in the future, we may increase our borrowings. We may incur additional debt by borrowing under our unsecured credit facility, mortgaging properties we own and/or issuing debt securities in a public offering or in a private transaction. We believe we will be able to raise additional debt and equity capital at reasonable costs to refinance our credit facility at or prior to its maturity. Our ability to raise reasonably priced capital is not guaranteed; we may be unable to raise reasonably priced capital because of reasons related to our business or for reasons beyond our control, such as market conditions. If our access to capital becomes limited, it could have an impact on our ability to refinance our debt obligations, fund dividend payments, acquire properties and fund acquisition activities.

We have covenants related to our indebtedness which impose certain operational limitations and a breach of those covenants could materially adversely affect our financial condition and results of operations.

The terms of our current indebtedness as well as debt instruments that the Company may enter into in the future are subject to customary financial and operational covenants. Among other things, these provisions require us to maintain certain financial ratios and minimum net worth and impose certain limits on our ability to incur indebtedness, create liens and make investments or

15

acquisitions. Our continued ability to incur debt and operate our business is subject to compliance with these covenants, which limit operational flexibility. Breaches of these covenants could result in a default under applicable debt instruments, even if payment obligations are satisfied. Financial and other covenants that limit our operational flexibility, as well as defaults resulting from a breach of any of these covenants in our debt instruments, could have a material adverse effect on our financial condition and results of operations.

We are exposed to the risk that the illiquidity of real estate investments could impede our ability to respond to adverse changes in the performance of our properties.

Real estate investments are relatively illiquid and, therefore, our ability to quickly sell or exchange any of our properties in response to changes in economic and other conditions may be limited. All of our properties are "special purpose" properties that cannot be readily converted to general residential, retail or office use. Facilities that participate in Medicare or Medicaid must meet extensive program requirements, including physical plant and operational requirements, which are revised from time to time. Transfers of operations of facilities are subject to regulatory approvals not required for transfers of other types of commercial operations and other types of real estate. Thus, if the operation of any of our properties becomes unprofitable due to competition, age of improvements or other factors such that our lessee or borrower becomes unable to meet its obligations on the lease or mortgage loan, the liquidation value of the property may be less than the net book value or the amount owed on any related mortgage loan, because the property may not be readily adaptable to other uses. The sale of the property or the replacement of an operator that has defaulted on its lease or loan could also be delayed by the approval process of any federal, state or local agency necessary for the transfer of the property or the replacement of the operator with a new operator licensed to manage the facility. No assurances can be given that we will recognize full value for any property that we are required to sell for liquidity reasons. Should such events occur, our results of operations and cash flows could be adversely affected.

We are exposed to risks associated with our investments in unconsolidated entities, including our lack of sole decision-making authority and our reliance on the financial condition of other interests.

Our investments in unconsolidated entities could be adversely affected by our lack of sole decision-making authority regarding major decisions, our reliance on the financial condition of other interests, any disputes that may arise between us and other partners, and our exposure to potential losses from the actions of partners. Risks of dealing with parties outside NHI include limitations on unilateral major decisions opposed by other interests, the prospect of divergent goals of ownership including the likelihood of disputes regarding management, ownership or disposition of a property, or limitations on the transfer of our interests without the consent of our partners. Risks of the unconsolidated entity extend to areas in which the financial health of our partners may impact our plans. Our partners might become bankrupt or fail to fund their share of required capital contributions, which may hinder significant action in the entity. We may disagree with our partners about decisions affecting a property or the entity itself, which could result in litigation or arbitration that increases our expenses, distracts our officers and directors and disrupts the day-to-day operations of the property, including by delaying important decisions until the dispute is resolved; and finally, we may suffer losses as a result of actions taken by our partners with respect to our investments.

We depend on revenues derived mainly from fixed rate investments in real estate assets, while a portion of our debt capital used to finance those investments bear interest at variable rates. This circumstance creates interest rate risk to the Company.

Our business model assumes that we can earn a spread between the returns earned from our investments in real estate as compared to our cost of capital, including debt and/or equity. Current interest rates on our debt are at historically low levels, and, as a result, the spread and our profitability on our investments have been at high levels. We are exposed to interest rate risk in the potential for a narrowing of our spread and profitability if interest rates increase in the future. Certain of our debt obligations are floating rate obligations with interest rates that vary with the movement of LIBOR or other indexes. Our revenues are derived mainly from fixed rate investments in real estate assets. Although our leases generally contain escalating rent clauses that provide a partial hedge against interest rate fluctuations, if interest rates rise, our interest costs for our existing floating rate debt and any new debt we incur would also increase. This increasing cost of debt could reduce our profitability by increasing the cost of financing our existing portfolio and our investment activity. Rising interest rates could limit our ability to refinance existing debt upon maturity or cause us to pay higher rates upon refinancing. We manage a portion of our exposure to interest rate risk by accessing debt with staggered maturities and through the use of derivative instruments, primarily interest rate swap agreements with major financial institutions. Increased interest rates may also negatively affect the market price of our common stock and increase the cost of new equity capital.

We are exposed to the risk that our assets may be subject to impairment charges.

We periodically, but not less than quarterly, evaluate our real estate investments and other assets for impairment indicators. The judgment regarding the existence of impairment indicators is based on factors such as market conditions, operator performance

16

and legal structure. If we determine that a significant impairment has occurred, we would be required to make an adjustment to the net carrying value of the asset, which could have a material adverse effect on our reported results of operations in the period in which the impairment charge occurs.

We depend on the ability to continue to qualify for taxation as a REIT.

We intend to operate as a REIT under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”) and believe we have and will continue to operate in such a manner. Since REIT qualification requires us to meet a number of complex requirements, it is possible that we may fail to fulfill them, and if we do, our earnings will be reduced by the amount of federal taxes owed. A reduction in our earnings would affect the amount we could distribute to our stockholders.

We have ownership limits in our charter with respect to our common stock and other classes of capital stock which may delay, defer or prevent a transaction or a change of control that might involve a premium price for our common stock or might otherwise be in the best interests of our stockholders.

Our charter, subject to certain exceptions, contains restrictions on the ownership and transfer of our common stock and preferred stock that are intended to assist us in preserving our qualification as a REIT. Our charter, provides that any transfer that would cause NHI to be beneficially owned by fewer than 100 persons or would cause NHI to be “closely held” under the Internal Revenue Code would be void, which, subject to certain exceptions, results in no person or entity being allowed to own, actually or constructively, more than 9.9% of the outstanding shares of our stock. Our Board of Directors, in its sole discretion, may exempt a proposed transferee from the ownership limit and such an exemption has been granted through Excepted Holder Agreements to members of the Carl E. Adams family. Based on the Excepted Holder Agreements currently outstanding, the individual ownership limit for all other stockholders is approximately 7.5%. Our charter gives our Board of Directors broad powers to prohibit and rescind any attempted transfer in violation of the ownership limits. These ownership limits may delay, defer or prevent a transaction or a change of control that might involve a premium price for our common stock or might otherwise be in the best interests of our stockholders.

We are subject to certain provisions of Maryland law and our charter and bylaws that could hinder, delay or prevent a change in control transaction, even if the transaction involves a premium price for our common stock or our stockholders believe such transaction to be otherwise in their best interests.

The Maryland Business Combination Act provides that, unless exempted, a Maryland corporation may not engage in business combinations, including mergers, dispositions of 10% or more of its assets, issuances of shares of stock and other specified transactions with an "interested stockholder" or an affiliate of an interested stockholder for five years after the most recent date on which the interested stockholder became an interested stockholder, and thereafter, unless specified criteria are met. An interested stockholder is generally a person owning or controlling, directly or indirectly, 10% or more of the voting power of the outstanding stock of a Maryland corporation. Unless our Board of Directors takes action to exempt us, generally or with respect to certain transactions, from this statute in the future, the Maryland Business Combination Act will be applicable to business combinations between us and other persons. The Company’s Charter and Bylaws also contain certain provisions that could have the effect of making it more difficult for a third party to acquire, or discouraging a third party from attempting to acquire, control of the Company. Such provisions could limit the price that certain investors might be willing to pay in the future for the common stock. These provisions include a staggered board of directors, blank check preferred stock, and the application of Maryland corporate law provisions on business combinations and control shares. The foregoing matters may, together or separately, have the effect of discouraging or making more difficult an acquisition or change of control of the Company.

Other risks.

See the notes to the consolidated financial statements, “Business” under Item 1 and “Legal Proceedings” under Item 3 herein for a discussion of various governmental regulations and operating factors relating to the health care industry and other factors and the risks inherent in them. You should carefully consider each of the foregoing risks before making any investment decisions in the Company. These risks and uncertainties are not the only ones facing us. There may be additional risks that we do not presently know of or that we currently deem immaterial. If any of the risks actually occur, our business, financial condition or results of operations could be materially adversely affected. In that case, the trading price of our shares of stock could decline, and you may lose all or part of your investment. Given these risks and uncertainties, we can give no assurance that these forward-looking statements will, in fact, occur and, therefore, caution investors not to place undue reliance on them.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None.

17

ITEM 2. PROPERTIES OWNED OR ASSOCIATED WITH MORTGAGE LOAN INVESTMENTS AS OF DECEMBER 31, 2014

			Lease (L)/	Licensed
Center	City	State	Mortgage (M)	Beds
SKILLED NURSING
NHC HealthCare, Anniston	Anniston	AL	L	151
NHC HealthCare, Moulton	Moulton	AL	L	136
Sunbridge Estrella Care & Rehabilitation	Avondale	AZ	L	161
Ayers Health & Rehabilitation Center	Trenton	FL	L	120
Bayonet Point Health & Rehabilitation Center	Hudson	FL	L	180
Bear Creek Nursing Center	Hudson	FL	L	120
Brooksville Healthcare Center	Brooksville	FL	L	180
Cypress Cove Care Center	Crystal River	FL	L	120
Heather Hill Healthcare Center	New Port Richey	FL	L	120
Parkway Health & Rehabilitation Center	Stuart	FL	L	177
Royal Oak Nursing Center	Dade City	FL	L	120
The Health Center of Merritt Island	Merritt Island	FL	L	180
The Health Center of Plant City	Plant City	FL	L	180
Grangeville Health and Rehabilitation Center	Grangeville	ID	L	60
NHC HealthCare, Glasgow	Glasgow	KY	L	206
Buckley HealthCare Center	Greenfield	MA	L	120
Holyoke Health Care Center	Holyoke	MA	L	102
John Adams HealthCare Center	Quincy	MA	L	71
Longmeadow of Taunton	Taunton	MA	L	100
NHC Healthcare, Desloge	Desloge	MO	L	120
NHC Healthcare, Joplin	Joplin	MO	L	126
NHC Healthcare, Kennett	Kennett	MO	L	170
NHC Healthcare, Maryland Heights	Maryland Heights	MO	L	220
NHC HealthCare, St. Charles	St. Charles	MO	L	120
Maple Leaf HealthCare Center	Manchester	NH	L	114
Villa Crest HealthCare Center	Manchester	NH	L	165
Epsom Manor HealthCare Center	Epsom	NH	L	108
Timberview Care Center	Albany	OR	L	62
Creswell Health and Rehabilitation Center	Creswell	OR	L	53
Forest Grove Rehabilitation and Care Center	Forest Grove	OR	L	81
NHC Healthcare, Anderson	Anderson	SC	L	290
NHC Healthcare, Greenwood	Greenwood	SC	L	152
NHC HealthCare, Laurens	Laurens	SC	L	176
UniHealth Post-Acute Care-Orangeburg	Orangeburg	SC	L	88
NHC Healthcare, Athens	Athens	TN	L	98
NHC Healthcare, Chattanooga	Chattanooga	TN	L	207
NHC HealthCare, Dickson	Dickson	TN	L	211
NHC HealthCare, Franklin	Franklin	TN	L	80
NHC Healthcare, Hendersonville	Hendersonville	TN	L	122
NHC Healthcare, Johnson City	Johnson City	TN	L	160
NHC Healthcare, Lewisburg	Lewisburg	TN	L	102
NHC HealthCare, McMinnville	McMinnville	TN	L	150
NHC HealthCare, Milan	Milan	TN	L	122
NHC Healthcare, Oakwood	Lewisburg	TN	L	60
NHC HealthCare, Pulaski	Pulaski	TN	L	102
NHC Healthcare, Scott	Lawrenceburg	TN	L	62
NHC HealthCare, Sequatchie	Dunlap	TN	L	120

18

			Lease (L)/	Licensed
Center	City	State	Mortgage (M)	Beds
SKILLED NURSING
NHC HealthCare, Smithville	Smithville	TN	L	120
NHC Healthcare, Somerville	Somerville	TN	L	84
NHC Healthcare, Sparta	Sparta	TN	L	120
Canton Oaks	Canton	TX	L	120
Corinth Rehabilitation Suites	Corinth	TX	L	134
Heritage Place	Mesquite	TX	L	149
Legend Healthcare & Rehabilitation	Paris	TX	L	120
Legend Oaks Healthcare & Rehabilitation Center (East)	Houston	TX	L	125
Legend Oaks Healthcare & Rehabilitation Center (Northwest)	Houston	TX	L	125
Legend Oaks Healthcare & Rehabilitation Center	San Antonio	TX	L	125
Legend Oaks Healthcare & Rehabilitation Center - Ennis	Ennis	TX	L	124
Legend Healthcare & Rehabilitation	Greenville	TX	L	125
Legend Oaks Healthcare & Rehabilitation Center	Houston	TX	L	124
Legend Oaks Healthcare & Rehabilitation Center	Houston	TX	L	125
Legend Oaks Healthcare & Rehabilitation Center	Kyle	TX	L	126
Park Place Care Center	Georgetown	TX	M	164
Winterhaven Healthcare Center	Houston	TX	L	160
Heritage Hall - Brookneal	Brookneal	VA	M	60
Heritage Hall - Grundy	Grundy	VA	M	120
Heritage Hall - Laurel Meadows	Laurel Fork	VA	M	60
Heritage Hall - Virginia Beach	Virginia Beach	VA	M	90
Heritage Hall - Front Royal	Front Royal	VA	M	60
Heritage Hall - Lexington	East Lexington	VA	M	60
NHC HealthCare, Bristol	Bristol	VA	L	120
ASSISTED LIVING
Regency Pointe Retirement Community	Rainbow City	AL	L	120
The Place at Gilbert	Gilbert	AZ	L	40
The Place at Glendale	Glendale	AZ	L	38
The Place at Tanque Verde	Tucson	AZ	L	42
The Place at Tucson	Tucson	AZ	L	60
Revere Court Memory Care	Sacramento	CA	L	56
Savannah Court of Bartow	Bartow	FL	L	30
Savannah Court of Lakeland	Lakeland	FL	L	30
Indigo Palms at Maitland	Maitland	FL	L	116
Discovery Village at Naples	Naples	FL	M	120
Brentwood at Fore Ranch	Ocala	FL	M	120
Savannah Court of St. Cloud	St. Cloud	FL	L	30
Savannah Court at Lake Oconee	Greensboro	GA	L	64
Bickford of Ames	Ames	IA	L	37
Bickford of Burlington	Burlington	IA	L	44
Bickford of Cedar Falls	Cedar Falls	IA	L	42
Bickford of Clinton	Clinton	IA	L	37
Bickford of Ft. Dodge	Ft. Dodge	IA	L	38
Bickford of Iowa City	Iowa City	IA	L	37
Bickford of Marshalltown	Marshalltown	IA	L	38
Bickford of Muscatine	Muscatine	IA	L	45
Bickford of Urbandale	Urbandale	IA	L	61
Prestige Assisted Living at Autumn Wind	Caldwell	ID	L	105
Indianhead Estates	Weiser	ID	L	25
Bickford of Bourbonnais	Bourbonnais	IL	L	65

19

			Lease (L)/	Licensed
Center	City	State	Mortgage (M)	Beds
ASSISTED LIVING
Bickford of Moline	Moline	IL	L	28
Bickford of Peoria	Peoria	IL	L	32
Bickford of Quincy	Quincy	IL	L	46
Bickford of Rockford	Rockford	IL	L	65
Bickford of Springfield	Springfield	IL	L	67
Bickford of Carmel	Carmel	IN	L	60
Bickford of Crawfordsville	Crawfordsville	IN	L	28
Bickford of Crown Point	Crown Point	IN	L	60
Bickford of Greenwood	Greenwood	IN	L	60
Bickford of Lafayette	LaFayette	IN	L	28
Bickford of Wabash	Wabash	IN	L	28
Bickford of Mission Springs	Mission	KS	L	91
Bickford of Overland Park	Overland Park	KS	L	79
West Monroe Arbors	West Monroe	LA	L	59
Bossier Arbors	Bossier City	LA	L	60
Bastrop Arbors	Bastrop	LA	L	38
Minden Arbors	Minden	LA	L	26
The Woodlands Assisted Living	Baltimore	MD	L	70
Bickford of Battle Creek	Battle Creek	MI	L	46
Bickford of Lansing	Lansing	MI	L	46
Bickford of Midland	Midland	MI	L	46
Bickford of Saginaw	Saginaw	MI	L	46
Traditions	Owatonna	MN	M	70
Gracewood Champlin	Champlin	MN	L	30
Gracewood Hugo	Hugo	MN	L	24
Gracewood Maplewood	Maplewood	MN	L	42
Gracewood North Branch	North Branch	MN	L	30
Bickford of Grand Island	Grand Island	NE	L	37
Bickford of Lincoln	Lincoln	NE	L	44
Bickford of Omaha Hickory	Omaha	NE	L	37
Halcyon Village	Marysville	OH	L	76
Bickford of Middletown	Middletown	OH	L	101
Clackamas View	Milwaukie	OR	L	25
Dorian Place	Ontario	OR	L	44
Wellsprings	Ontario	OR	L	32
The Place at Conway	Conway	SC	L	52
The Place at Gallatin	Gallatin	TN	L	49
The Place at Kingsport	Kingsport	TN	L	49
The Place at Tullahoma	Tullahoma	TN	L	49
Charleston House	Beaver Dam	WI	L	120
INDEPENDENT LIVING
Apple Blossom Independent Senior Living Community	Rogers	AR	L	119
Butterfield Place Independent Senior Living Community	Fort Smith	AR	L	117
Bay Park Independent Senior Living Community	Pinole	CA	L	98
Bridgecreek Independent Senior Living Community	West Covina	CA	L	108
Camelot Independent Senior Living Community	Hemet	CA	L	136
Fig Garden Independent Senior Living Community	Fresno	CA	L	103
Hampshire Independent Senior Living Community	Merced	CA	L	115
Mistywood Independent Senior Living Community	Roseville	CA	L	117
Standiford Place Independent Senior Living Community	Modesto	CA	L	121

20

			Lease (L)/	Licensed
Center	City	State	Mortgage (M)	Beds
INDEPENDENT LIVING
Iris Place Independent Senior Living Community	Athens	GA	L	142
Riverplace Independent Senior Living Community	Columbus	GA	L	114
River's Edge Independent Senior Living Community	Savannah	GA	L	121
Chateau De Boise Independent Senior Living Community	Boise	ID	L	97
Arbor Glen Independent Senior Living Community	Fort Wayne	IN	L	120
Nouveau Marc Independent Senior Living Community	Kenner	LA	L	113
Lake St. Charles Retirement Center	St. Charles	MO	L	180
Yardley Commons Independent Senior Living Community	Voorhees	NJ	L	107
Worthington Independent Senior Living Community	Gahanna	OH	L	117
Silver Arrow Estates Independent Senior Living Community	Broken Arrow	OK	L	126
Astor House Independent Senior Living Community	Newberg	OR	L	121
Eagle Crest Independent Senior Living Community	Myrtle Beach	SC	L	120
Westminster Independent Senior Living Community	Greenville	SC	L	117
Colonial Hill Retirement Center	Johnson City	TN	L	63
Parkwood Retirement Apartments	Chattanooga	TN	L	30
Bedford Independent Senior Living Community	Vancouver	WA	L	103
Garden Club Independent Senior Living Community	Bellevue	WA	L	105
Kamlu Retirement Inn Independent Senior Living Community	Vancouver	WA	L	83
Orchard Park Independent Senior Living Community	Yakima	WA	L	101
SENIOR LIVING CAMPUS
Linda Valley Care Center	Loma Linda	CA	L	181
Osprey Village at Amelia Island Plantation	Fernandina	FL	L	170
Savannah Court of Maitland	Maitland	FL	L	151
Savannah Court of Palm Beaches	W. Palm Beach	FL	L	144
Sunbridge Retirement & Rehab for Nampa	Nampa	ID	L	183
Ridgecrest	Mt. Airy	NC	L	84
Homestead Hills	Winston-Salem	NC	L	248
Sante Silverdale	Silverdale	WA	L	138
HOSPITALS
Santé Mesa	Mesa	AZ	M	70
Alvarado Parkway Institute	La Mesa	CA	L	66
Kentucky River Hospital	Jackson	KY	L	55
TrustPoint Hospital (Polaris)	Murfreesboro	TN	L	60
MEDICAL OFFICE				Sq. Ft.
North Okaloosa	Crestview	FL	L	27,017
Pasadena Bayshore	Pasadena	TX	L	61,500
Corporate Office	Murfreesboro	TN	N/A	7,000

21

10-YEAR LEASE EXPIRATIONS

The following table provides additional information on our leases which are scheduled to expire based on the maturity date contained in the most recent lease agreement or extension. We expect that, prior to maturity, we will negotiate new terms of a lease to either the current tenant or another qualified operator.

				Annualized		Percentage of
	Leases	Rentable	Number	Gross Rent**		Annualized
Year	Expiring	Square Feet*	of Units/Beds	(in thousands)		Gross Rent
2015	1	—	60	$	313	.2	%
2016	4	—	604	5,365		2.9	%
2017	7	—	896	7,262		3.9	%
2018	2	61,500	88	1,080		.6	%
2019	—	—	—	—		—	%
2020	6	27,017	224	2,777		1.5	%
2021	2	—	344	1,904		1.0	%
2022	4	—	156	4,055		2.2	%
2023	2	—	254	2,763		1.5	%
2024	8	—	379	4,240		2.3	%
Thereafter	105	—	12,759	154,668		83.9	%

*Rentable Square Feet represents total square footage in two MOB investments.

**Annualized Gross Rent refers to the amount of lease revenue that our portfolio would generate if all leases were in effect for the twelve-month calendar year, regardless of the commencement date, maturity date, or renewals.

ITEM 3. LEGAL PROCEEDINGS

Our facilities are subject to claims and suits in the ordinary course of business. Our lessees and borrowers have indemnified, and are obligated to continue to indemnify us, against all liabilities arising from the operation of the facilities, and are further obligated to indemnify us against environmental or title problems affecting the real estate underlying such facilities. While there may be lawsuits pending against certain of the owners and/or lessees of the facilities, management believes that the ultimate resolution of all such pending proceedings will have no material adverse effect on our financial condition, results of operations or cash flows.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable

22

PART II.

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

The Company’s charter contains certain provisions which are designed to ensure that the Company’s status as a REIT is protected for federal income tax purposes. One of these provisions provides that any transfer that would cause NHI to be beneficially owned by fewer than 100 persons or would cause NHI to be “closely held” under the IRS Code would be void, which, subject to certain exceptions, results in no stockholder being allowed to own, either directly or indirectly pursuant to certain tax attribution rules, more than 9.9% of the Company’s stock. In 1991, the Board created an exception to this ownership limitation for Dr. Carl E. Adams, his spouse, Jennie Mae Adams, and their lineal descendants. Effective May 12, 2008, we entered into Excepted Holder Agreements with W. Andrew Adams and certain members of his family. These written agreements are intended to restate and replace the parties’ prior verbal agreement. Based on the Excepted Holder Agreements currently outstanding, the individual ownership limit for all other stockholders is approximately 7.5%. Our charter gives our Board of Directors broad powers to prohibit and rescind any attempted transfer in violation of the ownership limits. These agreements were entered into in connection with the Company’s announcement in 2008 of a stock purchase program pursuant to which the Company subsequently purchased 194,100 shares of its common stock in the public market from its stockholders.

A separate agreement was entered into with each of the spouse and children of Dr. Carl E. Adams and others within Mr. W. Andrew Adams’ family. We needed to enter into such an agreement with each family member because of the complicated ownership attribution rules under the Internal Revenue Code. The agreement permits the Excepted Holders to own stock in excess of 9.9% up to the limit specifically provided in the individual agreement and not lose rights with respect to such shares. However, if the stockholder’s stock ownership exceeds the limit, then such shares in excess of the limit become “Excess Stock” and lose voting rights and entitlement to receive dividends. The Excess Stock classification remains in place until the stockholder no longer exceeds the threshold limit specified in the Agreement. The purpose of these agreements is to ensure that the Company does not violate the prohibition against a REIT being closely held.

W. Andrew Adams’ Excess Holder Agreement also provides that he will not own shares of stock in any tenant of the Company if such ownership would cause the Company to constructively own more than a 9.9% interest in such tenant. Again, this prohibition is designed to protect the Company’s status as a REIT for tax purposes.

In order to qualify for the beneficial tax treatment accorded to a REIT, we must make distributions to holders of our common stock equal on an annual basis to at least 90% of our REIT taxable income (excluding net capital gains), as defined in the Internal Revenue Code. Cash available for distribution to our stockholders is primarily derived from interest payments received on our notes and from rental payments received under our leases. All distributions will be made by us at the discretion of the Board of Directors and will depend on our cash flow and earnings, our financial condition, bank covenants contained in our financing documents and such other factors as the Board of Directors deems relevant. Our REIT taxable income is calculated without reference to our cash flow. Therefore, under certain circumstances, we may not have received cash sufficient to pay our required distributions.

Our common stock is traded on the New York Stock Exchange under the symbol “NHI”. As of February 13, 2015, there were approximately 810 holders of record of shares and approximately 27,800 beneficial owners of shares.

High and low stock prices of our common stock on the New York Stock Exchange and dividends declared for the last two years were:

	2014					2013
	Sales Price				Cash Dividends Declared	Sales Price				Cash Dividends Declared
Quarter Ended	High		Low			High		Low
March 31	$	63.53	$	54.75	$.77	$	67.18	$	57.24	$.70
June 30	64.84		58.85		.77	72.99		56.20		.735
September 30	65.29		57.00		.77	65.94		53.01		.735
December 31	71.75		56.53		.77	64.00		56.00		.735

The closing price of our stock on February 13, 2015 was $71.74.

23

We currently maintain two equity compensation plans: the 2005 Stock Option, Restricted Stock and Stock Appreciation Rights Plan (“the 2005 Plan”) and the 2012 Stock Incentive Plan ("the 2012 Plan"). These plans have been approved by our stockholders. The following table provides information as of December 31, 2014 about our common stock that may be issued upon grants of restricted stock and the exercise of options under our existing equity compensation plans.

	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column)
Equity compensation plans approved
by security holders	871,671	$60.43	775,6351

¹These shares remain available for grant under the 2005 Plan and the 2012 Plan.

The following graph demonstrates the performance of the cumulative total return to the stockholders of our common stock during the previous five years in comparison to the cumulative total return on the MSCI US REIT Index and the Standard & Poor’s 500 Stock Index. The MSCI US REIT Index is a free float-adjusted market capitalization weighted index that is comprised of Equity REIT securities. The MSCI US REIT Index includes securities with exposure to core real estate (e.g.residential and retail properties) as well as securities with exposure to other types of real estate (e.g.casinos, theaters).

	2009	2010	2011	2012	2013	2014
NHI	$100.00	$129.22	$162.68	$181.38	$188.71	$244.01
MSCI	$100.00	$128.48	$168.12	$164.46	$168.52	$219.71
S&P 500	$100.00	$115.06	$134.38	$136.29	$180.44	$205.14

24

ITEM 6. SELECTED FINANCIAL DATA.

The following table represents our financial information for the five years ended December 31, 2014. This financial information has been derived from our historical financial statements including those for the most recent three years included elsewhere in this Annual Report on Form 10-K and should be read in conjunction with those consolidated financial statements, accompanying footnotes and Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7. Prior period financial information has been reclassified for presentation of operations discontinued in 2013 as described in the notes to the consolidated financial statements. These reclassifications had no impact on previously reported net income.

(in thousands, except share and per share amounts)
	Years Ended December 31,
STATEMENT OF INCOME DATA:	2014			2013			2012			2011		2010
Revenues	$	177,509		$	117,828		$	93,317		$	83,739	$	79,423
Income from continuing operations	103,052			79,498			72,834			69,817		58,729
Discontinued operations:
Income from operations - discontinued	—			5,426			6,098			7,967		8,688
Gain on sales of real estate	—			22,258			11,966			3,348		2,004
Net income	103,052			107,182			90,898			81,132		69,421
Net income attributable to noncontrolling interest	(1,443		)	(999		)	(167		)	—		—
Net income attributable to common stockholders	$	101,609		$	106,183		$	90,731		$	81,132	$	69,421
PER SHARE DATA:
Basic earnings per common share:
Income from continuing operations	$	3.04		$	2.77		$	2.61		$	2.52	$	2.12
Discontinued operations	—			.97			.65			.41		.39
Net income attributable to common stockholders	$	3.04		$	3.74		$	3.26		$	2.93	$	2.51
Diluted earnings per common share:
Income from continuing operations	$	3.04		$	2.77		$	2.61		$	2.51	$	2.12
Discontinued operations	—			.97			.65			.41		.38
Net income attributable to common stockholders	$	3.04		$	3.74		$	3.26		$	2.92	$	2.50
OTHER DATA:
Common shares outstanding, end of year	37,485,902			33,051,176			27,857,217			27,751,208		27,689,392
Weighted average common shares:
Basic	33,375,966			28,362,398			27,811,813			27,719,096		27,664,482
Diluted	33,416,014			28,397,702			27,838,720			27,792,592		27,732,959
Regular dividends declared per common share	$	3.08		$	2.90		$	2.64		$	2.495	$	2.36
Special dividends declared per common share	$	—		$	—		$	.22		$	.22	$	—
BALANCE SHEET DATA: (at year end)
Mortgages and other notes receivable, net	$	63,630		$	60,639		$	84,250		$	78,672	$	75,465
Real estate properties, net	$	1,776,549		$	1,247,740		$	535,390		$	394,795	$	327,654
Preferred stock and marketable securities	$	53,635		$	50,782		$	51,016		$	49,496	$	60,608
Assets held for sale, net	$	—		$	—		$	1,611		$	29,381	$	36,853
Total assets	$	1,982,960		$	1,455,820		$	705,981		$	579,563	$	509,341
Debt	$	862,726		$	617,080		$	203,250		$	97,300	$	37,765
Total equity	$	1,049,933		$	777,160		$	468,047		$	443,485	$	442,500

25

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis is based primarily on the consolidated financial statements of National Health Investors, Inc. for the periods presented and should be read together with the notes thereto contained in this Annual Report on Form 10-K. Other important factors are identified in “Item 1. Business” and “Item 1A. Risk Factors” above.

Executive Overview

National Health Investors, Inc., is a self-managed real estate investment trust ("REIT") specializing in sale-leaseback, joint-venture, mortgage and mezzanine financing of need-driven and discretionary senior housing and medical investments. Our portfolio consists of real estate investments in independent, assisted and memory care communities, entrance-fee communities, senior living campuses, skilled nursing facilities, specialty hospitals and medical office buildings. Other investments include mortgages and notes, the preferred stock and marketable securities of other REITs, and a joint venture structured to comply with the provisions of the REIT Investment Diversification Empowerment Act of 2007 (“RIDEA”). Through this RIDEA joint venture, we invest in facility operations managed by independent third-parties. We fund our real estate investments primarily through: (1) cash flow, (2) debt offerings, including bank lines of credit and ordinary term debt, and (3) the sale of equity securities.

Portfolio

At December 31, 2014, our continuing operations consisted of investments in real estate and mortgage and other notes receivable involving 183 facilities located in 31 states. These investments involve 106 senior housing communities, 71 skilled nursing facilities, 4 hospitals, 2 medical office buildings and other notes receivable. These investments (excluding our corporate office of $900,000) consisted of properties with an original cost of approximately $1,987,949,000, rented under triple-net leases to 24 lessees, and $63,630,000 aggregate carrying value of mortgage and other notes receivable due from 15 borrowers.

We classify all of the properties in our portfolio as either senior housing or medical properties. We further classify our senior housing communities as either need-driven (assisted and memory care communities and senior living campuses) or discretionary (independent living and entrance-fee communities.) Medical properties within our portfolio include skilled nursing facilities, medical office buildings and specialty hospitals.

26

The following tables summarize our investments in real estate and mortgage and other notes receivable as of December 31, 2014 (dollars in thousands):

Real Estate Properties			Properties	Beds/Sq. Ft.*		Revenue		%
	Need-Driven Senior Housing
		Assisted Living	62	3,144		$	38,939	22.5	%
		Senior Living Campus	6	881		7,068		4.1	%
		Total Need-Driven Senior Housing	68	4,025		46,007		26.5	%
	Discretionary Senior Housing
		Entrance-Fee Communities	7	1,587		1,505		0.9	%
		Independent Living	28	3,114		45,120		26.0	%
		Total Discretionary Senior Housing	35	4,701		46,625		26.9	%
		Total Senior Housing	103	8,726		92,632		53.5	%
	Medical Facilities
		Skilled Nursing Facilities	64	8,370		65,095		37.6	%
		Hospitals	3	181		7,566		4.4	%
		Medical Office Buildings	2	88,517	*	986		0.6	%
		Total Medical Facilities	69			73,647		42.5	%
		Total Real Estate Properties	172			$	166,279	96.0	%
Mortgage and Other Notes Receivable
	Need-Driven Senior Housing		3	310		$	1,022	0.6	%
	Medical Facilities		8	664		2,589		1.5	%
	Other Notes Receivable		—	—		3,402		2.0	%
		Total Mortgage and Other Notes Receivable	11			7,013		4.0	%
		Total Portfolio	183			$	173,292	100.0	%

Portfolio Summary			Properties	Beds/Sq. Ft.*		Revenue		%
	Real Estate Properties		172			$	166,279	96.0	%
	Mortgage and Other Notes Receivable		11			7,013		4.0	%
		Total Portfolio	183			$	173,292	100.0	%
Summary of Facilities by Type
	Need-Driven Senior Housing
		Assisted Living	65	3,454		$	39,962	23.0	%
		Senior Living Campus	6	881		7,068		4.1	%
		Total Need-Driven Senior Housing	71	4,335		47,030		27.1	%
	Discretionary Senior Housing
		Entrance-Fee Communities	7	1,587		1,505		0.9	%
		Independent Living	28	3,114		45,120		26.0	%
		Total Discretionary Senior Housing	35	4,701		46,625		26.9	%
		Total Senior Housing	106	9,036		93,655		54.0	%
	Medical Facilities
		Skilled Nursing Facilities	71	8,964		66,480		38.4	%
		Hospitals	4	251		8,769		5.0	%
		Medical Office Buildings	2	88,517	*	986		0.6	%
		Total Medical	77			76,235		44.0	%
		Other	—			3,402		2.0	%
		Total Portfolio	183			$	173,292	100.0	%
Portfolio by Operator Type
	Public		53			$	45,696	26.4	%
	National Chain (Privately-Owned)		29			49,545		28.5	%
	Regional		91			69,455		40.1	%
	Small		10			8,596		5.0	%
		Total Portfolio	183			$	173,292	100.0	%

27

For the year ended December 31, 2014, operators of facilities which provided more than 3% of our total revenues were (in alphabetical order): Bickford Senior Living; Brookdale Senior Living; Fundamental; Health Services Management; Holiday Retirement; Legend Healthcare; and National HealthCare Corp.

As of December 31, 2014, our average effective annualized rental income was $7,870 per bed for SNFs, $13,057 per unit for ALFs, $14,489 per unit for ILFs, $24,383 per unit for EFCs, $41,798 per bed for hospitals, and $11 per square foot for MOBs.

We invest a portion of our funds in the preferred and common shares of other publicly held healthcare REITs to ensure a substantial portion of our assets are invested for real estate purposes. At December 31, 2014, such investments had a carrying value of $53,635,000.

Areas of Focus

We are evaluating and will potentially make additional investments during 2015 while we continue to monitor and improve our existing properties. We seek tenants who will become mission-oriented partners in relationships where our business goals are aligned. This approach fuels steady, and thus, enduring growth for those partners and for NHI.

Following the recent Federal Reserve policy statement assuring near-zero interest rates for a “considerable time,” we expect debt costs to remain attractive in the near term and, as a result, increased competition for healthcare assets should continue. Within our industry, demand for healthcare real estate has been intensified by the availability of senior unsecured debt at historically low rates. As a result of the availability of debt and equity capital, a multitude of buyers seeking investment opportunities, including unlisted REITs and private equity funds, threaten to result in an oversold market and have led NHI to more value-based investment judgments.

As capitalization rates have fallen for existing healthcare facilities, there has been increased interest in constructing new facilities in hopes of generating better returns on invested capital. Using our relationship-driven model, we look for opportunities to support new and existing tenants and borrowers, with the capital needed to expand existing facilities and to initiate ground-up development of new facilities in markets where there is demonstrated demand for a particular product type. The projects we agree to finance have attractive upside potential and are expected to provide above-average returns to our shareholders to mitigate the risks inherent with property development and construction.

For the year endedDecember 31, 2014, approximately 37% of our revenue from continuing operations has come from operators of our skilled nursing facilities that receive a significant portion of their revenue from governmental payors, primarily Medicare and Medicaid. Such revenues are subject annually to statutory and regulatory changes, and in recent years, have been reduced due to federal and state budgetary pressures. In 2009, we began to diversify our portfolio by directing a significant portion of our investments into properties which do not rely primarily on Medicare and Medicaid reimbursement, but rather on private pay sources. While we will occasionally acquire skilled nursing facilities in good physical condition with a proven operator and strong local market fundamentals, our recent investment focus has been on acquiring need-driven and senior housing assets (including assisted living and memory care facilities, senior living campuses, independent living facilities and entrance-fee communities).

As a result of the Holiday investment we made in December 2013, our revenue from skilled nursing facilities, as a percentage of continuing operations revenue, has continued to decline. Our December 2014 acquisition of eight Senior Living communities further broadens the private payor model within our portfolio and reduces our exposure to the Government single-payor model. These acquisitions represent continued diversification across asset types and further exemplify our strategy of focusing on well-established tenants who are recognized leaders in their industries. Considering individual tenant lease revenue as a percentage of total revenue, Bickford Senior Living is our largest assisted living/memory care tenant, an affiliate of Holiday Retirement is our largest independent living tenant, National HealthCare Corporation is our largest skilled nursing tenant and for 2015 Senior Living Communities is expected to be our largest entrance-fee community tenant.

Our shift toward private payor facilities, as well as our recent expansion into the discretionary senior housing market, has resulted in a portfolio that is relatively balanced between medical facilities, need-driven senior housing and discretionary senior housing. The following table illustrates this shift by comparing our total lease revenue for 2013 compared to a full year of lease revenue for leases in place as of December 31, 2014 (in thousands):

28

	Year Ended December 31,
	2013	%	2014*	%
Medical Facilities	67,314	64%	74,427	36%
Need-Driven Senior Housing	36,386	34%	48,824	24%
Discretionary Senior Housing	2,329	2%	83,815	40%
	106,029	100%	207,066	100%

* This is the lease revenue our portfolio would generate if all lease contracts were in effect for the twelve-month calendar year, regardless of the commencement date, maturity date, or renewals. Therefore, this amount is used for financial analysis purposes, and is not indicative of actual or expected results.

If longer term borrowing rates increase as we expect, there will be pressure on the spread between our cost of capital and the returns we earn. We expect that pressure to be partially mitigated by market forces that have led to an increase in asset prices and likely will lead to increased lease rates, as well. Our cost of capital has increased as we execute our plan to transition some of our short term revolving borrowings into debt instruments with longer maturities and fixed interest rates. Managing risk involves trade-offs with the competing goal of maximizing short-term profitability. Our intention is to strike an appropriate balance between these competing interests within the context of our investor profile.

In 2015, we plan to announce our participation in an at-the market ("ATM") equity program whereby we may sell our common shares on as as-needed basis. ATMs are a type of shelf-based offering which provide issuers the ability to sell publicly traded shares at the prevailing market price at the time and amount of their choosing. An ATM program offers an effective way to match-fund our smaller acquisitions by exercising control over the timing and size of transactions at a more favorable cost of capital as compared to larger follow-on offerings. By raising funds through the ATM along with borrowings from our credit facility, we expect to continue to maintain our leverage ratio as one of the lowest in our peer group. We continue to explore other various funding sources including bank term loans, convertible debt, traditional equity placement, unsecured bonds and senior notes, debt private placement and secured government agency financing.

We manage our business with a goal of increasing the regular annual dividends paid to shareholders. Our Board of Directors approves a regular quarterly dividend which is reflective of expected taxable income on a recurring basis. Our transactions that are infrequent and non-recurring that generate additional taxable income have been distributed to shareholders in the form of special dividends. Taxable income is determined in accordance with the Internal Revenue Code and differs from net income for financial statements purposes determined in accordance with U.S. generally accepted accounting principles. Our goal of increasing annual dividends requires a careful balance between identification of high-quality lease and mortgage assets in which to invest and the cost of our capital with which to fund such investments. We consider the competing interests of short and long-term debt (interest rates, maturities and other terms) versus the higher cost of new equity. We accept some level of risk associated with leveraging our investments. We intend to continue to make new investments that meet our underwriting criteria and where the spreads over our cost of capital will generate sufficient returns to our shareholders.

Our regular and special dividends for the last three years are as follows:

	2014		2013		2012
Regular	$	3.08	$	2.90	$	2.64
Special	$	—	$	—	$	0.22	1
	$	3.08	$	2.90	$	2.86

¹Paid to shareholders of record in January 2013

Our increased investments in healthcare real estate beginning in 2009 have been partially accomplished by our ability to effectively leverage our balance sheet. However, we continue to maintain a relatively low leverage balance sheet compared with the value of our assets and with many in our peer group. We believe that our fixed charge coverage ratio, which is the ratio of Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, including amounts in discontinued operations, excluding real estate asset impairments and gains on dispositions) to fixed charges (interest expense and principal payments on debt), and the ratio of consolidated debt to Adjusted EBITDA are meaningful measures of our ability to service our debt. We use these two measures as a useful basis to compare the strength of our balance sheet with those in our peer group.

We calculate our fixed charge coverage ratio as approximately 6.8x for the year endedDecember 31, 2014 (see page 50 for a discussion of Adjusted EBITDA and a reconciliation to our net income). On an annualized basis, our consolidated debt-to-Adjusted EBITDA ratio is 4.1x.

29

According to a 2011 estimate by the U.S. Department of Health and Human Services, the number of Americans 65 and older is expected to grow 36% between 2010 and 2020, compared to a 9% growth rate for the general population. An increase in this age demographic is expected to increase demand for senior housing properties of all types in the coming decades. There is increasing demand for private-pay senior housing properties in countries outside the U.S., as well. We therefore consider real estate and note investments with U.S. entities who seek to expand their senior housing operations into countries where local-market demand is sufficiently demonstrated.

Strong demographic trends provide the context for continued growth in 2015 and the years ahead. We plan to fund any new real estate and mortgage investments during 2015 using our liquid assets and debt financing. Should the weight of additional debt as a result of new acquisitions suggest the need to rebalance our capital structure, we would then expect to access the capital markets through an ATM or other equity offerings. Our disciplined investment strategy implemented through measured increments of debt and equity sets the stage for annual dividend growth, continued low leverage, a portfolio of diversified, high-quality assets, and business relationships with experienced tenants and borrowers who we make our priority. These continue to be the key drivers of our business plan.

Critical Accounting Policies

We prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. These accounting principles require us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and cause our reported net income to vary significantly from period to period. If actual experience differs from the assumptions and other considerations used in estimating amounts reflected in our consolidated financial statements, the resulting changes could have a material adverse effect on our consolidated results of operations, liquidity and/or financial condition.

We consider an accounting estimate or assumption critical if:

1. the nature of the estimates or assumptions is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change; and

2. the impact of the estimates and assumptions on financial condition or operating performance is material.

Our significant accounting policies and the associated estimates, judgments and the issues which impact these estimates are as follows:

Valuations and Impairments

The majority of our tenants and borrowers are in the long-term health care industry (SNFs and ALFs) where SNFs derive their revenues primarily from Medicare, Medicaid and other government programs. Amounts paid under these government programs are subject to legislative and government budget constraints. From time to time, there may be material changes in government reimbursement. In the past, SNFs have experienced material reductions in government reimbursement.

The long-term health care industry has experienced significant professional liability claims which has resulted in an increase in the cost of insurance to cover potential claims. These factors have combined to cause a number of bankruptcy filings, bankruptcy court rulings and court judgments affecting our lessees and borrowers. In prior years, we have determined that impairment of certain of our investments had occurred as a result of these events.

We evaluate the recoverability of the carrying values of our properties on a property-by-property basis. On a quarterly basis, we review our properties for recoverability when events or circumstances, including significant physical changes in the property, significant adverse changes in general economic conditions and significant deteriorations of the underlying cash flows of the property, indicate that the carrying amount of the property may not be recoverable. The need to recognize an impairment charge is based on estimated undiscounted future cash flows from a property compared to the carrying value of that property. If recognition of an impairment charge is necessary, it is measured as the amount by which the carrying amount of the property exceeds the fair value of the property.

For notes receivable, we evaluate the estimated collectibility of contractual loan payments and general economic conditions on an instrument-by-instrument basis. On a quarterly basis, we review our notes receivable for ability to realize on such notes when events or circumstances, including the non-receipt of contractual principal and interest payments, significant deteriorations of the financial condition of the borrower and significant adverse changes in general economic conditions, indicate that the carrying amount of the note receivable may not be recoverable. If necessary, impairment is measured as the amount by which

30

the carrying amount exceeds the fair value as measured by the discounted cash flows expected to be received under the note receivable or, if foreclosure is probable, the fair value of the collateral securing the note receivable.

We evaluate our marketable equity securities for other-than-temporary impairments. An impairment of a marketable equity security would be considered “other-than-temporary” unless we have the ability and intent to hold the investment for a period of time sufficient for a forecasted market price recovery up to (or beyond) the cost of the investment and evidence indicates the cost of the investment is recoverable within a reasonable period of time.

The initial carrying value of investments in unconsolidated entities is based on the amount paid to purchase the interest or the estimated fair value of the assets prior to our acquisition of interests in the entity. An aggregate basis difference between the cost of our equity method investee and the amount of underlying equity in its net assets is primarily attributable to goodwill, which is not amortized. We evaluate for impairment our equity method investments and related goodwill based upon a comparison of the estimated fair value of the investments to their carrying value. When we determine a decline in the estimated fair value of such an investment below its carrying value is other than temporary, an impairment is recorded. No impairments to the carrying value of our equity method investee have been recorded for any period presented.

While we believe that the carrying amounts of our properties and arrangement with Bickford are recoverable and our notes receivable, marketable securities and other investments are realizable, it is possible that future events could require us to make significant adjustments or revisions to these estimates.

The determination of the fair value and whether a shortfall in operating revenues or the existence of operating losses is indicative of a loss in value that is other than temporary involves significant judgment. Our estimates consider all available evidence including, as appropriate, the present value of the expected future cash flows discounted at market rates, general economic conditions and trends, the duration of the fair value deficiency, and any other relevant factors. While we believe our assumptions are reasonable, changes in these assumptions may have a material impact on our financial results.

Revenue Recognition

We collect interest and rent from our customers. Generally, our policy is to recognize revenues on an accrual basis as earned. However, there are certain of our customers for whom we have determined, based on insufficient historical collections and the lack of expected future collections, that revenue for interest or rent is not probable of collection until received. For these investments, our policy is to recognize interest or rental income when assured, which we consider to be the period the amounts are collected. We identify investments as nonperforming if a required payment is not received within 30 days of the date it is due. This policy could cause our revenues to vary significantly from period to period. Revenue from minimum lease payments under our leases is recognized on a straight-line basis to the extent that future lease payments are considered collectible. Lease payments that depend on a factor directly related to future use of the property, such as an increase in annual revenues over base year revenues, are considered to be contingent rentals, are included in rental income when they are determinable and earned, and are excluded from future minimum lease payments.

REIT Qualification

As part of the process of preparing our consolidated financial statements, significant management judgment is required to evaluate our compliance with REIT requirements. Our determinations are based on interpretation of tax laws, and our conclusions may have an impact on the income tax expense recognized. We believe that we have operated our business so as to qualify as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), and we intend to continue to operate in such a manner, but no assurance can be given that we will be able to so qualify at all times. Effective October 1, 2012, we began to record income tax expense or benefit with respect to our subsidiary which will be taxed as a Taxable REIT Subsidiary ("TRS") under provisions similar to those applicable to regular corporations. Aside from such income taxes that may be applicable to the taxable income in our TRS, we will not be subject to U.S. federal income tax, provided that we continue to qualify as a REIT and make distributions to stockholders equal to or in excess of our taxable income. This treatment substantially eliminates the “double taxation” (at the corporate and stockholder levels) that typically applies to corporate dividends. Our failure to continue to qualify under the applicable REIT qualification rules and regulations would cause us to owe state and federal income taxes and would have a material adverse impact on our financial position, results of operations and cash flows.

Principles of Consolidation

The consolidated financial statements include our accounts, the accounts of our wholly-owned subsidiaries and the accounts of joint ventures in which we own a majority voting interest with the ability to control operations and where no substantive participating rights or substantive kick-out rights have been granted to the noncontrolling interests. In addition, we consolidate

31

a legal entity deemed to be a variable interest entity ("VIE") when we determine that we are the VIE's primary beneficiary. All material inter-company transactions and balances have been eliminated in consolidation.

We apply Financial Accounting Standards Board ("FASB") guidance for our arrangements with VIEs which requires us to identify entities for which control is achieved through means other than voting rights and to determine which business enterprise is the primary beneficiary of the VIE. A VIE is broadly defined as an entity with one or more of the following characteristics: (a) the total equity investment at risk is insufficient to finance the entity's activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about the entity's activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity's activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. We may change our assessment of a VIE due to events such as modifications of contractual arrangements that affect the characteristics or adequacy of the entity's equity investments at risk and the disposal of all or a portion of an interest held by the primary beneficiary.

Real Estate Properties

Real property developed by us is recorded at cost, including the capitalization of interest during construction. The cost of real property investments acquired is allocated to net tangible and identifiable intangible assets based on their respective fair values. Tangible assets primarily consist of land, buildings and improvements. The remaining purchase price is allocated among identifiable intangible assets, if any.

We make estimates as part of our allocation of the purchase price of acquisitions to the various components of the acquisition based upon the relative fair value of each component. The most significant components of our allocations are typically the allocation of fair value to land, equipment, buildings and other improvements, and intangible assets, if any. Our estimates of the values of these components will affect the amount of depreciation and amortization we record over the estimated useful life of the property acquired or the remaining lease term.

Significant Operators

We have three operators, NHC, Bickford and Holiday, from whom we individually derive at least 10% of our income from operations. Beginning in December 2014, a fourth major operator, Senior Living Communities, LLC (“Senior Living”), leased eight retirement communities from us which contractually obligates Senior Living in 2015 to make lease payments which will be recorded as revenues that aggregate to more than 22% of our total revenues for 2014.

Holiday

In December 2013 we acquired 25 independent living facilities from Holiday, an affiliate of Holiday Retirement. We have leased this portfolio to NH Master Tenant, LLC, a subsidiary of Holiday. Our tenant continues to operate the facilities pursuant to a management agreement with a Holiday-affiliated manager. The master lease term of 17 years began in December 2013 and provides for initial base rent of $31,915,000 plus annual escalators of 4.5% in the first 3 years and a minimum of 3.5% each year thereafter.

Of our total revenue from continuing operations, $43,817,000 (25%) was recorded as rental income from Holiday for the year endedDecember 31, 2014.

NHC

As of December 31, 2014, we leased 42 health care facilities under two master leases to NHC, a publicly-held company and the lessee of our legacy properties. The facilities leased to NHC consist of 3 independent living facilities and 39 skilled nursing facilities (4 of which are subleased to other parties for whom the lease payments are guaranteed to us by NHC). These facilities are leased to NHC under the terms an amended Master Lease Agreement dated October 17, 1991 ("the 1991 lease") which includes our 35 remaining legacy properties and a Master Lease Agreement dated August 30, 2013 ("the 2013 lease"), discussed below, which includes seven skilled nursing facilities acquired from ElderTrust on August 31, 2013.

The 1991 lease has been amended to extend the lease expiration to December 31, 2026. There are two additional 5-year renewal options, each at fair rental value of such leased property as negotiated between the parties and determined without including the value attributable to any improvements to the leased property voluntarily made by NHC at its expense. Under the terms of the 1991 lease, the base annual rental is $30,750,000 and rent escalates by 4% of the increase, if any, in each facility's revenue over

32

a 2007 base year. The 2013 lease provides for a base annual rental of $3,450,000 and has a lease expiration of August 2028. Under the terms of the 2013 lease, rent escalates 4% of the increase in each facility's revenue over the 2014 base year. For both the 1991 lease and the 2013 lease, we refer to this additional rent component as “percentage rent.” During the last three years of the 2013 lease, NHC will have the option to purchase the facilities for $49,000,000.

The following table summarizes the percentage rent received and recognized from NHC (in thousands):

	Year Ended December 31,
	2014		2013		2012
Current year	$	2,292	$	2,275	$	1,530
Prior year final certification1	15		746		997
Total percentage rent	$	2,307	$	3,021	$	2,527

¹ For purposes of the percentage rent calculation described in the Master Lease Agreement, NHC’s annual revenue by facility for a given year is certified to NHI by March 31st of the following year.

Of our total revenue from continuing operations, $36,446,000 (21%), $34,756,000 (29%) and $33,056,000 (35%) in 2014, 2013 and 2012, respectively, were derived from NHC.

Bickford

As of December 31, 2014, we owned an 85% equity interest and an affiliate of Bickford, Sycamore Street, LLC ("Sycamore"), owned a 15% equity interest in our consolidated subsidiary ("PropCo") which owns 31 assisted living/memory care facilities. The facilities are leased to an operating company, ("OpCo"), in which we retain a non-controlling 85% ownership interest. Our joint venture is structured to comply with the provisions of RIDEA.

On October 31, 2014, our subsidiary, PropCo, acquired a 101-unit assisted living facility located in Middletown, Ohio for $16,488,000, including $65,000 in transaction costs and assumption of secured debt at an interest rate of 2.9% with an outstanding principal balance of $9,535,000 and an estimated fair value of $7,858,000. The facility was leased to OpCo under an existing master lease and provides for fixed annual escalators. Because the facility was owner-occupied, the acquisition was accounted for as an asset purchase.

The current annual contractual rent from OpCo to PropCo is $22,595,000, plus fixed annual escalators. During the quarter ended December 31, 2014, PropCo completed major construction and received a certificate of occupancy on an assisted living facility which had been under development. Under the terms of the current development lease agreement, NHI continues to receive rent of 9% on the total amount of development costs, including land, which totaled $7,811,000 at December 31, 2014.

OpCo is continuing the lease-up of 3 facilities, 2 of which opened in the fourth quarter of 2013. Once the facilities stabilize, an annual rental amount will be determined between the parties. NHI has an exclusive right to Bickford's future acquisitions, development projects and refinancing transactions.

On February 5, 2015, we announced a new development program pursuant to which our RIDEA joint venture with Bickford will develop five senior housing communities in Illinois and Virginia. Construction is slated to start in early 2015 with openings planned for 2016. The total estimated project cost is $55,000,000. Each community will consist of 60 private-pay assisted living and memory care units managed by Bickford Senior Living.

Of our total revenue from continuing operations, $21,421,000 (12%), $14,586,000 (12%) and $5,164,000 (6%) were recorded as rental income from Bickford for the years ended December 31, 2014, 2013, and 2012, respectively.

As of December 31, 2014, the carrying value of our investment in the operating company, OpCo, was $9,424,000. The excess of the original purchase price over the fair value of identified tangible assets at acquisition of $8,986,000 is treated as implied goodwill and is subject to periodic review for impairment in conjunction with our equity method investment as a whole.

With PropCo’s acquisition of additional Bickford properties in June 2013, an assignment was entered into whereby the operations of the 17 newly acquired facilities were conveyed by an affiliate of Bickford to OpCo. The transaction mandated the effective cut-off of operating revenues and expenses and the settlement of operating assets and liabilities at the acquisition date. Specified remaining net tangible assets were assigned to OpCo at the transferor's carryover basis resulting in an adjustment, through NHI's capital in excess of par value to our equity method investment in OpCo, of $817,000.

33

The results of operations for OpCo include the impact of startup operations for the newly constructed facilities currently in lease-up which are expected to show net losses until fully stabilized.

Unaudited summarized income statements for OpCo are presented below (in thousands):

	Year Ended December 31,
	2014			2013		2012
Revenues	$	65,704		$	42,636	$	6,335
Operating expenses, including management fees	43,389			27,419		4,329
Lease expenses	21,859			14,579		1,937
Depreciation and amortization	539			256		16
Net Income (Loss)	$	(83	)	$	382	$	53

Our RIDEA structure is designed to follow the fundamental elements of a triple-net lease. Within the RIDEA, we continue to foresee organic growth potential from improving operations, but our agreements with Bickford also enforce growth through a hybrid feature providing a preferred payment stream subject to 3% escalation and payable first to NHI among the joint venture partners. As operations season and lease-up among our new developments is completed, we expect our equity share of RIDEA operating income to become a more visible component of our comprehensive income.

In July 2013, we extended a $9,200,000 loan to Sycamore to fund a portion of their acquisition of six senior housing communities consisting of 342 units. The loan is guaranteed by principals of Bickford and has a two-year maturity plus a one-year extension option with 12% annual interest. As a result of this transaction and existing agreements governing the nature of our relationship with Bickford, PropCo has acquired a $97,000,000 purchase option on the properties which is exercisable over the term of the loan. We are monitoring the performance of this portfolio which currently has an NOI that would presume a capitalization rate on PropCo's purchase option price in excess of 7.5%, and trending upward. The loan and the purchase option constitute variable interests of NHI in Sycamore, which is a VIE. However, because NHI is not its primary beneficiary, Sycamore is not subject to consolidation.

Senior Living Communities

On December 17, 2014, we acquired a portfolio of eight retirement communities (the “Senior Living Portfolio”) with a total of 1,671 units from Health Care REIT, Inc. and certain of its affiliates for a cash purchase price of $476,000,000. The Senior Living Portfolio includes 7 entrance-fee communities and 1 senior living campus.

Because the Senior Living portfolio was previously leased by Health Care REIT, Inc., we accounted for acquisition of the 100% interest in the Senior Living Portfolio using the acquisition method as prescribed by FASB Accounting Standards Codification ("ASC") Topic 805, Business Combinations. As part of this transaction, we recognized all identifiable tangible assets at fair value on the date of acquisition (there were no identifiable intangible assets or liabilities assumed) and attributed $32,410,000 of the purchase price to fair value of the land, $443,590,000 to the fair value of building and improvements and expensed $89,000 in transaction costs at closing.

We have leased the Senior Living Portfolio under a triple-net master lease with an affiliate of Senior Living which will continue to manage the facilities. The 15-year master lease contains two 5-year renewal options and provides for year one cash rent of $31,000,000, subject to annual escalators of 4% in years two through four and 3% thereafter.

In connection with the Senior Living acquisition, we provided a $15,000,000 revolving line of credit to Senior Living, the maturity of which mirrors the term of the master lease. Borrowings will be used primarily to finance construction projects within the Senior Living Portfolio, including building additional units. Amounts outstanding under the facility, $2,816,000 at December 31, 2014, bear interest at an annual rate equal to the 10-year U.S. Treasury rate, 2.17% at December 31, 2014, plus 6%.

34

Investment Highlights

Since January 1, 2014, we have made or announced the following real estate and note investments ($ in thousands):

	Properties	Asset Class	Amount
Lease Investments
Senior Living Communities	8	SHO	$	476,000
Bickford Senior Living	6	SHO	71,488
Prestige Senior Living	4	3 SNF & 1 SHO	45,115
Chancellor Health Care	2	SHO	17,150
Senior Living Management	1	SHO	700
Note Investments
Life Care Services	1	SHO	154,500
Senior Living Communities	N/A	N/A	15,000
Sycamore	N/A	N/A	500
			$	780,453

Prestige

In March 2014 we completed a $40,115,000 purchase of 3 skilled nursing facilities in Oregon totaling 196 beds and a 105-unit assisted living facility in Idaho from Prestige Senior Living ("Prestige"). We have a commitment to fund contingent earn-out payments up to a maximum of $6,390,000 based on the achievement of certain financial metrics as measured periodically through December 31, 2015. Because the facilities were owner-occupied, we accounted for the acquisition as an asset purchase. At acquisition, we estimated probable contingent payments of $3,000,000 to be likely and have, accordingly, reflected that amount in the Consolidated Balance Sheet. Contingent payments earned will be an addition to the lease base when funded.

We have leased the 4 facilities to Prestige with a 15-year term at an initial rate of 8.4% plus fixed annual escalators. In addition, at two of the Oregon facilities we have committed to invest $2,000,000 for capital improvements which are expected to be completed by June 30, 2015. This investment will be added to the basis on which the lease amount is calculated.

Chancellor

On September 30, 2014, we completed a $5,650,000 acquisition of a 25-unit assisted living facility in Milwaukie, Oregon and leased the facility to Chancellor Health Care, LLC ("Chancellor") for an initial term of 15 years with two ten-year renewal options. The initial lease rate is 8.0% with fixed annual escalators. Because the facility was owner-occupied, we accounted for the acquisition as an asset purchase.

In June 2014 we acquired a 56-unit assisted living/memory care facility in Sacramento, California for $11,500,000 and leased the facility to Chancellor for an initial term of 15 years, plus renewal options. The initial lease rate is 8.0% with fixed annual escalators. Because the facility was owner-occupied, we accounted for the acquisition as an asset purchase.

Life Care Services

On February 10, 2015, we finalized our agreement to lend Life Care Services, through its LCS-Westminster Partnership III LLP (“LCS-WP”) up to $154,500,000. The loans convey a mortgage interest and serve to facilitate the construction of Phase II of Timber Ridge at Talus (“Timber Ridge”), a Type-A Entrance-Fee Community in the Seattle area.

The loans take the form of two notes under a master credit agreement. The senior loan (“Note A”) will total $60,000,000 at a 6.75% interest rate with 10 basis-point escalators after year three, and has a term of 10 years. We funded $33,100,000 of Note A at closing. Note A is interest-only and is locked to prepayment for three years. After year three, the prepayment penalty starts at 5% and declines 1% per year. The loan will be freely prepayable during the last 6 months of its term. The second note ("Note B") is a construction loan for up to $94,500,000 at an interest rate of 8% and a five year maturity. We anticipate funding Note B over twenty months and will be repaid with entrance fees once Phase II opens.

NHI has a purchase option on the property for the greater of fair market value or $115,000,000. A purchase option window of fifteen months contingently opens in year five or upon earlier stabilization, as defined in our agreement. The purchase option

35

constitutes a variable interest in Phase II of the Timber Ridge project, creating an interest in specified assets of LCS-WP but not in LCS-WP as a whole. Since LCS-WP is not a VIE, the specified Timber Ridge assets are not be subject to the consolidation guidance governing VIEs.

Other Lease Activity

Our leases are typically structured as "triple net leases" on single-tenant properties having an initial leasehold term of 10 to 15 years with one or more 5-year renewal options. As such, there may be reporting periods in which we experience few, if any, lease renewals or expirations. During the year ended ended December 31, 2014, we had 1 expiring lease which was renewed with the existing tenant on substantially similar lease terms.

In September 2014 we entered into an agreement with our current tenant, Senior Living Management, to fund up to $700,000 in renovations to our Greensboro, Georgia assisted living facility. When the renovations are complete, the total amount will be added to the lease base. As of December 31, 2014, $13,000 had been funded.

In May 2014 in exchange for a nineteen-month extension to September 2026, we have agreed to a rent adjustment on our White Pine Senior Living lease beginning in January 2015 which will result in decreased cash rent of approximately $33,000 per month over the original lease term ending February 2025.

In February 2015, we transitioned the lease of four assisted living facilities in Louisiana to our tenant, Senior Living Management. The termination of the prior lease resulted in a write-off for accounting purposes during 2014 of $932,000 in straight-line rent receivable. The scheduled lease payments are the same as in the former lease. The current lease has an initial term of 15 years plus fixed annual escalators after the first year. In addition, we agreed to fund up to $280,000 in renovations and improvements which will be added to the lease basis used to determine monthly rent.

Real Estate and Mortgage Write-downs

Our borrowers and tenants experience periods of significant financial pressures and difficulties similar to other health care providers. Governments at both the federal and state levels have enacted legislation to lower, or at least slow, the growth in payments to health care providers. Furthermore, the cost of professional liability insurance has increased significantly during this same period. Since inception, a number of our facility operators and mortgage loan borrowers have undergone bankruptcy. Others have been forced to surrender properties to us in lieu of foreclosure or, for certain periods, have failed to make timely payments on their obligations to us. We believe that the carrying amounts of our real estate properties are recoverable and that mortgage notes receivable are realizable and supported by the value of the underlying collateral. However, it is possible that future events could require us to make significant adjustments to these carrying amounts.

Potential Effects of Medicare Reimbursement

Our tenants who operate skilled nursing facilities receive a significant portion of their revenues from governmental payors, primarily Medicare (federal) and Medicaid (states). Changes in reimbursement rates and limits on the scope of services reimbursed to skilled nursing facilities could have a material impact on the operators' liquidity and financial condition. The Centers for Medicare & Medicaid Services ("CMS") released a final rule that provides a 2% increase in their Medicare reimbursement for fiscal 2015 beginning on October 1, 2014. We expect that our borrowers and lessees will be able to withstand this nominal Medicare increase due to their credit quality, profitability and their debt or lease coverage ratios, although no assurances can be given as to what the ultimate effect that similar Medicare increases on an annual basis would have on each of our borrowers and lessees. According to industry studies, state Medicaid funding is not expected to keep pace with inflation. Federal legislative policies have been adopted and continue to be proposed that would reduce Medicare and/or Medicaid payments to skilled nursing facilities.

36

Results of Operations

The significant items affecting revenues and expenses are described below (in thousands):

	Years ended December 31,						Period Change
	2014			2013			$			%
Revenues:
Rental income
ILFs leased to an affiliate of Holiday Retirement	$	31,915		$	787		$	31,128		NM
ALFs leased to RIDEA joint venture with Bickford	20,946			14,219			6,727			47.3	%
3 SNFs and 1 ALF leased to Prestige Senior Living	2,544			—			2,544			NM
SNFs newly leased to NHC (7 ElderTrust facilities)	3,450			350			3,100			NM
SNFs leased to Fundamental Long Term Care	5,519			3,494			2,025			58.0	%
ALFs leased to Chancellor Health Care	2,489			1,207			1,282			106.2	%
7 EFCs and 1 SLC leased to Senior Living Communities	1,206			—			1,206			NM
ALFs leased to Brookdale Senior Living	4,912			4,215			697			16.5	%
ALF leased to Discovery Senior Living	942			249			693			NM
Other new and existing leases	75,892			75,037			855			1.1	%
	149,815			99,558			50,257			50.5	%
Straight-line rent adjustments, new and existing leases	16,464			6,471			9,993			154.4	%
Total Rental Income	166,279			106,029			60,250			56.8	%
Interest income from mortgage and other notes
Sycamore Street (Bickford affiliate)	1,137			531			606			NM
ElderTrust	—			644			(644		)	(100.0	)%
SeniorTrust	—			475			(475		)	(100.0	)%
Other new and existing mortgages	5,876			5,983			(107		)	(1.8	)%
Total Interest Income from Mortgage and Other Notes	7,013			7,633			(620		)	(8.1	)%
Investment income and other	4,217			4,166			51			1.2	%
Total Revenue	177,509			117,828			59,681			50.7	%
Expenses:
Depreciation
ILFs leased to an affiliate of Holiday Retirement	12,915			—			12,915			NM
ALFs leased to RIDEA joint venture with Bickford	6,680			4,229			2,451			58.0	%
3 SNFs and 1 ALF leased to Prestige Senior Living	892			—			892			NM
SNFs newly leased to NHC (7 ElderTrust facilities)	896			299			597			199.7	%
ALFs leased to Chancellor Health Care	739			342			397			116.1	%
Other new and existing assets	15,956			15,231			725			4.8	%
Total Depreciation	38,078			20,101			17,977			89.4	%
Interest expense and amortization of debt issuance costs	25,882			9,191			16,691			NM
Unamortized debt premium recognized in income	(1,655		)	—			(1,655		)	NM
Debt issuance costs expensed due to credit facility modifications	2,145			416			1,729			NM
Legal	209			784			(575		)	(73.3	)%
Loan and realty (recoveries) losses, net	—			1,976			(1,976		)	NM
Other expenses	9,727			9,492			235			2.5	%
	74,386			41,960			32,426			77.3	%
Income before equity-method investee, discontinued operations and noncontrolling interest	103,123			75,868			27,255			35.9	%
Income (loss) from equity-method investee	(71		)	324			(395		)	NM
Investment and other gains	—			3,306			(3,306		)	NM
Income from continuing operations	103,052			79,498			23,554			NM
Income from discontinued operations	—			5,426			(5,426		)	NM
Gain on sale of real estate	—			22,258			(22,258		)	NM
Net income	103,052			107,182			(4,130		)	(3.9	)%
Net income attributable to noncontrolling interest	(1,443		)	(999		)	(444		)	NM
Net income attributable to common stockholders	$	101,609		$	106,183		$	(4,574	)	(4.3	)%
NM - not meaningful

37

Financial highlights of the year ended December 31, 2014, compared to 2013 were as follows:

• Rental income increased $60,250,000 primarily as a result of new real estate investments. During 2013 we completed $748,939,000 of new real estate investments. During 2014 we completed $555,453,000 of new real estate investments. The increase in rental income included a $9,993,000 increase in straight-line rent adjustments. Generally accepted accounting principles require rental income to be recognized on a straight-line basis over the term of the lease to give effect to scheduled rent escalators. Future increases in rental income depend on our ability to make new investments which meet our underwriting criteria.

• Interest income from mortgage and other notes decreased $620,000 primarily due to the settlement of outstanding notes receivable balances from ElderTrust and SeniorTrust, partially offset by interest income on a note receivable from Sycamore which began in July 2013. Unless we continue to make new investments in loans, our interest income will continue to decrease due to the normal amortization and scheduled maturities of our loans.

• Depreciation expense recognized in continuing operations increased $17,977,000 compared to the prior year primarily due to new real estate investments completed during 2013 and 2014.

• Interest expense relates to borrowings on our credit facility, the convertible senior notes issued in March 2014 and debt assumed in the acquisition of real estate. The $16,691,000 increase in interest expense and amortization of debt issuance costs resulted from (a) the issuance of 3.25% coupon convertible debt of $200,000,000 to reduce lower interest borrowings on our revolving credit facility, and (b) expanded borrowings used to fund new real estate investments in 2014. We expect to partially fund additional healthcare real estate investments in 2015 with borrowings from our bank credit facility. During the first quarter of 2014, we made modifications to our credit facility and as a result have written off $2,145,000 of previously unamortized debt issuance costs. Upfront fees and other debt-related costs are amortized over the term of the credit facility. On December 31, 2014, we repaid two Fannie Mae mortgage loans and, as a result, recognized the remaining unamortized debt premium balance of $1,655,000.

• Legal expenses were $575,000 lower in 2014 when compared to 2013 primarily as a result of litigation which reached final settlement in April 2013.

• During 2013 we recorded an impairment of $4,037,000 related to a mortgage note receivable. In September 2013 we received $3,293,000 as full payment of a mortgage note and recorded a recovery of a previous writedown of $2,061,000.

The results of operations for facilities sold, including the gain or loss on such sales, have been reported for periods prior to the adoption of ASU 2014-08 as discontinued operations. The reclassifications to retrospectively reflect the disposition of these facilities had no impact on previously reported net income.

38

The significant items affecting revenues and expenses are described below (in thousands):

	Years ended December 31,						Period Change
	2013			2012			$			%
Revenues:
Rental income
ALFs leased to RIDEA joint venture with Bickford	$	14,219		$	4,646		9,573			NM
SNFs leased to Fundamental Long Term Care	3,494			1,777			1,717			96.6	%
Hospital leased to Polaris	2,140			528			1,612			NM
ALF leased to Landmark Senior Living	1,579			35			1,544			NM
SLC leased to Santé Partners	2,114			744			1,370			NM
ALFs leased to Chancellor Health Care	1,207			276			931			NM
SNFs leased to NHC	33,974			33,056			918			2.8	%
SNFs leased to Legend Healthcare	11,918			11,099			819			7.4	%
Other new and existing leases	28,913			25,539			3,374			13.2	%
	99,558			77,700			21,858			28.1	%
Straight-line rent adjustments, new and existing leases	6,471			3,782			2,689			71.1	%
Total Rental Income	106,029			81,482			24,547			30.1	%
Interest income from mortgage and other notes
Capital Funding Group	2,062			626			1,436			NM
Sycamore (Bickford affiliate)	531			8			523			NM
ElderTrust	644			1,068			(424		)	(39.7	)%
SeniorTrust	475			999			(524		)	(52.5	)%
Bell Oden	—			853			(853		)	NM
Other new and existing mortgages	3,921			3,872			49			1.3	%
Total Interest Income from Mortgage and Other Notes	7,633			7,426			207			2.8	%
Investment income and other	4,166			4,409			(243		)	(5.5	)%
Total Revenue	117,828			93,317			24,511			26.3	%
Expenses:
Depreciation
ALFs leased to RIDEA joint venture with Bickford	4,229			1,344			2,885			NM
ALF leased to Landmark Senior Living	581			—			581			NM
SLC leased to Santé Partners	679			226			453			NM
Hospital leased to Polaris	440			108			332			NM
Other new and existing assets	14,172			13,094			1,078			8.2	%
Total Depreciation	20,101			14,772			5,329			36.1	%
Interest expense and amortization of loan costs	9,229			3,492			5,737			NM
General and administrative	9,254			7,799			1,455			18.7	%
Loan and realty (recoveries) losses, net	1,976			(2,195		)	4,171			NM
Other expenses	1,400			1,537			(137		)	(8.9	)%
	41,960			25,405			16,555			65.2	%
Income before equity-method investment, discontinued operations and noncontrolling interest	75,868			67,912			7,956			11.7	%
Income from equity-method investment	324			45			279			NM
Investment and other gains	3,306			4,877			(1,571		)	(32.2	)%
Income from continuing operations	79,498			72,834			6,664			9.1	%
Income from discontinued operations	5,426			6,098			(672		)	(11.0	)%
Gain on sale of real estate	22,258			11,966			10,292			NM
Net income	107,182			90,898			16,284			17.9	%
Net income attributable to noncontrolling interest	(999		)	(167		)	(832		)	NM
Net income attributable to common stockholders	$	106,183		$	90,731		$	15,452		17.0	%
NM - not meaningful

39

Financial highlights of the year ended December 31, 2013, compared to 2012 were as follows:

• Rental income increased $24,547,000 when compared to the same period in the prior year primarily as a result of new real estate investments of $748,939,000 and $129,851,000 funded during 2013 and 2012. Our Holiday investment of $492,959,000 was funded on December 23, 2013 and contributed minimally to the increase, as it was placed in service during the last days of the year. Future increases in rental income depend on our ability to make new investments which meet our underwriting criteria.

• Interest income from mortgage and other notes increased by $207,000 due to our loans with Capital Funding Group and Sycamore but most of the increase was offset by (1) the settlement of outstanding notes receivable balances from not-for-profit borrowers, ElderTrust and SeniorTrust totaling $28,741,000, and (2) the payoff of a mortgage receivable of $3,293,000 secured by a facility in Georgia which resulted in a recovery of a previous writedown of $2,061,000.

• Depreciation expense recognized in continuing operations increased $5,329,000 compared to the prior year primarily due to new real estate investments completed during 2012 and 2013.

• Interest expense, which includes amortization of loan costs of $706,000 and $320,000 for the years ended December 31, 2013 and 2012, respectively, relates to our borrowings on our credit facility and debt assumptions to fund new real estate and loan investments. Amortization of loan costs for 2013 includes $416,000 which were written off as a result of the modifications we made to the credit facility at the end of the second quarter. Upfront fees and other loan-related costs are amortized over the term of the credit facility. The increase in interest expense and loan cost amortization of $5,737,000 resulted from expanded borrowings used to fund new real estate investments in 2012 and 2013.

• General and administrative expenses for 2013 increased $1,455,000 when compared to 2012 primarily due to higher consulting and advisory costs resulting from our increased investment activity, employee compensation and $210,000 in transaction costs related to two business combinations completed during 2013.

• Loan and realty losses include an impairment of $4,037,000 recorded in March 2013 related to our estimate of the underlying value of the collateral for the SeniorTrust note. In September 2013 we received $3,293,000 as full payment of a mortgage note and recorded a recovery of a previous writedown of $2,061,000. The 2012 recovery represents the net of an initial impairment of $2,300,000 recorded against our SeniorTrust note receivable collected in 2013 and the recovery of $4,495,000 on a note secured by three SNFs in Georgia.

• In 2013, investment and other gains included the write-off of a $3,256,000 contingent purchase liability that was not required to be paid. Also in 2013 we recognized a gain of $19,370,000 on our sale of six skilled nursing facilities to our tenant, NHC, and a gain of $2,888,000 on two other dispositions discussed in Note 11 to the consolidated financial statements. In 2012 gains related primarily to a recovery on a previously written-off mortgage note receivable.

The results of operations for facilities sold, including the gain or loss on such sales, have been reported for periods prior to the adoption of ASU 2014-08 as discontinued operations. The reclassifications to retrospectively reflect the disposition of these facilities had no impact on previously reported net income.

40

Liquidity and Capital Resources

Sources and Uses of Funds

Our primary sources of cash include rent payments, principal and interest payments on mortgage and other notes receivable, dividends received on our investments in the common and preferred shares of other REITs, proceeds from the sales of real property and borrowings from our term loans and revolving credit facility. Our primary uses of cash include dividend distributions to our shareholders, debt service payments (both principal and interest), new investments in real estate and notes and general corporate overhead.

These sources and uses of cash are reflected in our Consolidated Statements of Cash Flows as summarized below (dollars in thousands):

	Year Ended						One Year Change					Year Ended		One Year Change
	12/31/2014			12/31/2013			$			%		12/31/12		$			%
Cash and cash equivalents at beginning of period	$	11,312		$	9,172		$	2,140		23.3	%	15,886		$	(6,714	)	(42.3	)%
Net cash provided by operating activities	126,143			104,193			21,950			21.1	%	86,266		17,927			20.8	%
Net cash used in investing activities	(540,316		)	(625,824		)	85,508			(13.7	)%	(99,810	)	(526,014		)	NM
Net cash provided by financing activities	406,148			523,771			(117,623		)	NM		6,830		516,941			NM
Cash and cash equivalents at end of period	$	3,287		$	11,312		$	(8,025	)	(70.9	)%	9,172		$	2,140		23.3	%

Operating Activities – Net cash provided by operating activities for the year ended December 31, 2014 increased primarily as a result of the collection of lease payments on new real estate investments completed during 2013 and 2014.

Investing Activities – Net cash flows used in investing activities for the year ended December 31, 2014 decreased slightly compared to 2013 primarily due to a slight decrease in real estate investment activity completed during 2014.

Financing Activities – Net cash flows provided by financing activities for the year ended December 31, 2014 decreased slightly compared to 2013 primarily due to a slight decrease in our capital needs resulting from slightly lower real estate investment activity during 2014, partially offset by $100,650,000 in dividends paid to stockholders.

Liquidity

At December 31, 2014, $94,790,000 was available in cash, highly-liquid marketable securities and borrowing capacity on our revolving credit facility. As of January 15, 2015, with the placement of $225,000,000 in senior unsecured notes and the use of the proceeds to free availability on our revolving credit facility, further discussed below, we had approximately $320,000,000 available in cash, highly-liquid marketable securities and borrowing capacity on our revolving credit facility. In addition, our investment in LTC preferred stock is convertible into 2,000,000 shares of common stock whose per share price ranged between $37 and $44 during the quarter ended December 31, 2014. Cash collected from our loans and leases is used to pay debt service, the expenses of operating the REIT, our dividends to stockholders and to make new real estate investments.

In March 2014 we issued $200,000,000 of 3.25% senior unsecured convertible notes due April 2021 (the "Notes"). Interest is payable April 1st and October 1st of each year. The Notes are convertible at an initial conversion rate of 13.926 shares of common stock per $1,000 principal amount, representing a conversion price of approximately $71.81 per share for a total of approximately 2,785,200 underlying shares. The conversion rate is subject to adjustment upon the occurrence of certain events, as defined in the indenture governing the Notes, but will not be adjusted for any accrued and unpaid interest except in limited circumstances. Upon conversion, NHI's conversion obligation may be satisfied, at our option, in cash, shares of common stock or a combination of cash and shares of common stock. Because the conversion price was in excess of the average stock price for the year, the impact of the conversion option was anti-dilutive to the year-end earnings per share calculation and as such had no effect on our earnings per share. As of February 13, 2015 our stock price closed at $71.74. If current prices increase above the initial $71.81 conversion price, some dilution will be attributable to the conversion feature going forward.

As discussed in Note 7 to the consolidated financial statements, accounting rules require that we split the Notes into a debt component and an equity component. The value of the debt component is based upon the estimated fair value of a similar debt instrument without the conversion feature at the time of issuance and was estimated to be approximately $192,238,000. The $7,762,000 difference between the contractual principal on the debt and the value allocated to the debt was recorded as an equity component and represents the estimated value of the conversion feature of the instrument. The excess of the contractual principal amount of the debt over its estimated fair value is amortized to interest expense using the effective interest method, with 3.9% as the effective interest rate, over the term of the Notes.

41

The total cost of issuing the Notes was $6,063,000, of which $5,788,000 was allocated to the debt component and is subject to amortization over the estimated term of the notes. The remaining $275,000 was allocated to the equity component.

On March 27, 2014, we entered into an amended $700,000,000 senior unsecured credit facility. The facility can be expanded, subject to certain conditions, up to an additional $130,000,000. The amended credit facility provides for: (1) a $450,000,000 unsecured, revolving credit facility that matures in March 2019 (inclusive of an embedded 1-year extension option) with interest at 150 basis points over LIBOR; (2) a $130,000,000 unsecured term loan that matures in June 2020 with interest at 175 basis points over LIBOR of which interest of 3.91% is fixed with an interest rate swap agreement; and (3) two existing term loans which remain in place totaling $120,000,000, maturing in June 2020 and bearing interest at 175 basis points over LIBOR, a notional amount of $40,000,000 being fixed at 3.29% until 2019 and $80,000,000 being fixed at 3.86% until 2020. The employment of interest rate swaps for our fixed term debt leaves only our revolving credit facility exposed to variable rate risk. Our decision to amend our credit facility was made for the purpose of extending the maturity of a portion of our terms loans to over six years and to expand the amount of funds available to draw on our revolving credit facility.

At December 31, 2014, we had $76,000,000 available to draw on the revolving portion of the credit facility. The unused commitment fee is 40 basis points per annum. The unsecured credit facility requires that we maintain certain financial ratios within limits set by our creditors. To date, these ratios, which are calculated quarterly, have been within the limits required by the credit facility agreements. We continually assess the impact of any new investments and the underlying capital requirements on these limits. In the future, our resource allocation decisions may be driven in part by the need to maintain compliance with these creditor-imposed limits.

In July and September 2014 we obtained mortgage loans totaling $38,007,000 from the U.S. Department of Housing and Urban Development secured by nine properties in our joint venture with an affiliate of Bickford. The mortgage notes require monthly payments of principal and interest of 4.65% in the first year and 4.3% thereafter (inclusive of mortgage insurance premium) and mature in August and October 2049.

In October 2014 we assumed a HUD mortgage loan with an outstanding principal balance of $9,535,000 and an estimated fair value of $7,858,000. The HUD mortgage requires monthly payments of principal and interest of 2.9% (inclusive of mortgage insurance premium) and matures in October 2047.

The aggregate outstanding balance of our HUD mortgage loans as of December 31, 2014 was $47,352,000.

On December 5, 2014 we completed a public offering of 4,427,500 shares of common stock at a price to the public of $63.80 per share. The net proceeds from the offering were approximately $270,798,000, after deducting underwriting discounts and commissions and other offering expenses. We used the net proceeds from the offering to fund a portion of the acquisition of the Senior Living Communities portfolio in December 2014.

As part of the Care acquisition in 2013, we assumed Fannie Mae mortgage loans bearing interest at a blended rate of 6.89% and set to mature on July 1, 2015, with interest maintenance penalties expiring on December 31, 2014. We repaid those loans in the amount of $77,267,000 on December 31, 2014 without penalty using funds from our revolving credit facility.

On January 15, 2015 we issued $125,000,000 of 8-year notes with a coupon of 3.99% and $100,000,000 of 12-year notes with a coupon of 4.51% to a leading provider of private placement fixed rate debt. The notes are unsecured and require quarterly payments of interest only until maturity. We used the proceeds from the notes to pay down borrowings on our revolving credit facility.

As described earlier, in 2015 we plan to announce our participation in an at-the-market (“ATM”) equity program whereby we may sell our common shares on an as-needed basis. We continue to explore other various funding sources including bank term loans, convertible debt, traditional equity placement, unsecured bonds and senior notes, debt private placement and secured government agency financing.

To mitigate our exposure to interest rate risk, we have entered into the following interest rate swap contracts on three of our term loans as of December 31, 2014 (dollars in thousands):

Date Entered	Maturity Date	Fixed Rate	Rate Index	Notional Amount		Fair Value
May 2012	April 2019	3.29%	1-month LIBOR	$	40,000	$	(98	)
June 2013	June 2020	3.86%	1-month LIBOR	$	80,000	$	(1,814	)
March 2014	June 2020	3.91%	1-month LIBOR	$	130,000	$	(3,281	)

42

We periodically refinance the borrowings on our revolving credit facility into longer-term debt instruments. We consider secured debt from U.S. Govt. agencies, including HUD, private placements of unsecured debt, and public offerings of debt and equity. We anticipate that our historically low cost of debt capital will rise in the near to mid-term, as the federal government inevitably transitions away from quantitative easing. Because of consensus expectations of resultant rising interest rates, refinancing the borrowings on our revolving credit facility continues to be a high priority.

If we modify or replace existing debt, we would incur debt issuance costs. These fees would be subject to amortization over the term of the new debt instrument and may result in the write-off of fees associated with debt which has been replaced or modified. Sustaining long-term dividend growth will require that we consider all forms of capital mentioned above, with the goal of maintaining a low-leverage balance sheet as mitigation against potential adverse changes in the business of our tenants and borrowers.

We intend to comply with REIT dividend requirements that we distribute at least 90% of our annual taxable income for the year ending December 31, 2014 and thereafter. We declared total dividends (regular and special) of $3.08 per common share in 2014, $2.90 per common share in 2013, and $2.86 per common share in 2012. Dividends declared for the fourth quarter of each fiscal year are paid by the end of the following January and are, with some exceptions, treated for tax purposes as having been paid in the fiscal year just ended as provided in IRS Code Sec. 857(b)(8). The 2012 dividends declared included a special dividend of $.22 per common share due to a recovery of a previous writedown at the end of December 2012. We declare special dividends when we compute our REIT taxable income in an amount that exceeds our regular dividends for the fiscal year.

Off Balance Sheet Arrangements

We currently have no outstanding guarantees. For additional information on our letter of credit with Sycamore, an affiliate of Bickford, see our discussion in this section under Contingent Liabilities, below. Our equity method investment in OpCo is intended to be self-financing, and aside from initial investments therein, no direct support has been provided by NHI to OpCo since inception on September 30, 2012. We have concluded that OpCo meets the accounting criteria to be considered a VIE. However, because we do not control the entity, nor do we have any role in the day-to-day management, we are not the primary beneficiary of the entity, and we account for our investment using the equity method. We have no material obligation arising from our investment in OpCo, and we believe our maximum exposure to loss at December 31, 2014, due to this involvement, would be limited to our equity interest.

Contractual Obligations and Contingent Liabilities

As of December 31, 2014, our contractual payment obligations and contingent liabilities are more fully described in the notes to the consolidated financial statements and were as follows (in thousands):

	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Debt, including interest1	$	1,030,721	$	25,140	$	75,391	$	657,553	$	272,637
Real estate purchase liabilities	3,000		3,000		—		—		—
Construction commitments	7,407		7,407		—		—		—
Loan commitments	12,184		12,184		—		—		—
	$	1,053,312	$	47,731	$	75,391	$	657,553	$	272,637

¹ Interest is calculated based on the interest rate at December 31, 2014 through maturity of the 7-year term loans, the revolving credit facility, and the mortgages assumed in our arrangement with Bickford, based on the balances outstanding as of December 31, 2014. The calculation also includes an unused commitment fee of .40%.

Commitments and Contingencies

The following table summarizes information as of December 31, 2014 related to our outstanding commitments and contingencies which are more fully described in the notes to the consolidated financial statements.

43

	Asset Class	Type	Total		Funded			Remaining
Commitments:
Senior Living Communities	SHO	Revolving Credit	$	15,000,000	$	(2,816,000	)	$	12,184,000
Capital Funding Group	Mezz. Note	Revolving Credit	$	15,000,000	$	(15,000,000	)	$	—
Bickford Senior Living	SHO	Construction	$	9,000,000	$	(7,811,000	)	$	1,189,000
Chancellor Health Care	SHO	Construction	$	8,000,000	$	(4,584,000	)	$	3,416,000
Kentucky River Medical Center	Hospital	Renovation	$	8,000,000	$	(7,583,000	)	$	417,000
Santé Partners	SHO	Renovation	$	3,500,000	$	(2,621,000	)	$	879,000
Prestige Senior Living	SHO	Renovation	$	2,000,000	$	(1,555,000	)	$	445,000
Holiday Retirement	SHO	Renovation	$	1,500,000	$	(1,126,000	)	$	374,000
Senior Living Management	SHO	Renovation	$	700,000	$	(13,000	)	$	687,000
Sycamore Street (Bickford affiliate)	SHO	Revolving Credit	$	500,000	$	(500,000	)	$	—
Contingencies:
Prestige Senior Living	SHO	Lease Inducement	$	6,390,000	$	—		$	6,390,000
Sycamore Street (Bickford affiliate)	SHO	Letter-of-credit	$	3,550,000	$	—		$	3,550,000
Discovery Senior Living	SHO	Lease Inducement	$	2,500,000	$	—		$	2,500,000
Santé Partners	Hospital	Loan	$	2,000,000	$	—		$	2,000,000
Santé Partners	SHO	Lease Inducement	$	2,000,000	$	—		$	2,000,000

Bickford

During the quarter ended December 31, 2014, our consolidated subsidiary, PropCo, completed major construction and received certificates of occupancy on one assisted living facility which had been under development. In February 2014 we provided a $2,785,000 letter of credit for the benefit of our joint venture partner, Sycamore, which holds a minority interest in PropCo. In December 2014 we increased the amount of the letter of credit to $3,550,000.

In June 2014 we entered into a $500,000 revolving loan with our joint venture partner, Sycamore, to fund pre-development expenses related to potential future projects. Interest is payable monthly at 10% and the note matures in August 2015. At December 31, 2014 the revolving loan was fully drawn.

Chancellor

In October 2013, we entered into a $7,500,000 commitment to build a 46-unit free-standing assisted living and memory care community, expanding our Linda Valley senior living campus in Loma Linda, California. We began construction in 2014 and had funded $4,231,000 as of December 31, 2014. The initial lease term is for 15 years at an annual rate of 9% plus a fixed annual escalator. We also committed to provide up to $500,000 for renovations and improvements related to our recent acquisition of a 63-unit senior housing community in Baltimore, Maryland which we have leased to Chancellor Health Care. We began renovations in 2014 and as of December 31, 2014 had funded $353,000. We receive rent income on funds advanced for both construction projects.

Discovery

As a lease inducement, we have a contingent commitment to fund a series of payments up to $2,500,000 in connection with our September 2013 lease to Discovery of a senior living campus in Rainbow City, Alabama. Discovery would earn the contingent payments upon obtaining, and maintaining, a specified lease coverage ratio. As earned, the payments would be due in installments of $750,000 in each of years two and three of the lease with the residual due in year four. As of December 31, 2014, incuring the contingent payments was not considered probable. Accordingly, no provision for these payments is reflected in the consolidated financial statements.

Fundamental

In April 2013, we completed the purchase of two skilled nursing facilities located in Canton and Corinth, Texas for a purchase price of $26,150,000 in cash, plus consideration related to the Corinth facility of $1,600,000 conditional upon meeting future performance measures. In March 2014 upon satisfactory achievement of the required operating metrics, we made the full $1,600,000 payment to Fundamental.

44

Helix Healthcare

In March 2010, we completed a purchase/leaseback transaction with Helix Healthcare (“Helix”) for $12,500,000. The purchase price includes a conditional payment of $1,000,000. In December 2014, upon satisfactory achievement of the required operating metrics, we made the full $1,000,000 payment to Helix.

Holiday Retirement

In connection with our December 2013 purchase/leaseback of 25 independent living facilities from Holiday Retirement, we have committed to fund up to $1,500,000 of capital improvements to the acquired facilities. As of December 31, 2014, we had funded $1,126,000 toward this commitment.

Kentucky River

In March 2012, we entered into a construction commitment to Jackson Hospital Corporation, an affiliate of Community Health Systems, to provide up to $8,000,000 for extensive renovations and additions to our Kentucky River Medical Center, a general acute care hospital in Jackson, Kentucky. This investment will be added to the basis on which the lease amount is calculated. The construction project commenced during the first quarter of 2013 and is expected to continue over two years. Total construction costs incurred as of December 31, 2014 were $7,583,000.

Prestige

We have agreed to fund capital improvements of up to $2,000,000 in connection with two of the facilities we lease to Prestige. The capital improvements will be an addition to our original investment in the properties when funded and will be included in the lease base. As of December 31, 2014, we had funded $1,555,000 of this commitment. Additionally, we have committed to fund contingent earn out payments up to a maximum of $6,390,000 based on the achievement of certain financial metrics as measured periodically through December 31, 2015. At acquisition, we estimated probable contingent payments of $3,000,000 to be likely and have reflected that amount in the consolidated financial statements. Contingent payments earned will be included in the lease base when funded.

Santé

We have a $2,000,000 loan commitment to our borrower, Santé Partners, LLC (“Santé”). This additional loan amount becomes available to the borrower when the 70-bed transitional rehabilitation hospital, completed in March 2011, achieves certain operating metrics. NHI also has the option to purchase and lease back the hospital when it achieves a predetermined level of stabilized net operating income.

We are committed to fund a $3,500,000 expansion and renovation program at our Silverdale, Washington senior living campus and as of December 31, 2014 had funded $2,621,000, which was added to the basis on which the lease amount is calculated. In connection with our Silverdale, Washington senior living campus, we have a contingent commitment to fund two lease inducement payments of $1,000,000 each. Santé would earn the payments upon attaining and sustaining a specified lease coverage ratio. If earned, the first payment would be due after the second lease year and the second payment would be due after the third lease year. At acquisition, incurring the contingent payments was not considered probable. Accordingly, no provision for these payments is reflected in the consolidated financial statements.

Senior Living Communities

In connection with the Senior Living acquisition, we are providing a $15,000,000 revolving line of credit, the maturity of which will mirror the term of the master lease. Borrowings will be used to finance construction projects within the Senior Living Portfolio, including building additional units. Up to $5,000,000 of the facility may be used to meet general working capital needs. Amounts outstanding under the facility, $2,816,000 at December 31, 2014, bear interest at an annual rate equal to the 10-year U.S. Treasury rate, 2.17% at December 31, 2014, plus 6%.

Senior Living Management

In September 2014 we entered into an agreement with our current tenant, Senior Living Management, to fund up to $700,000 for renovations to our Greensboro, Georgia assisted living facility. When the renovations are complete, the total amount will be added to the lease base. As of December 31, 2014, $13,000 of this commitment had been funded.

45

Litigation

Our facilities are subject to claims and suits in the ordinary course of business. Our lessees and borrowers have indemnified, and are obligated to continue to indemnify us, against all liabilities arising from the operation of the facilities, and are further obligated to indemnify us against environmental or title problems affecting the real estate underlying such facilities. While there may be lawsuits pending against certain of the owners and/or lessees of the facilities, management believes that the ultimate resolution of all such pending proceedings will have no material adverse effect on our financial condition, results of operations or cash flows.

46

FFO, AFFO & FAD

These supplemental operating performance measures may not be comparable to similarly titled measures used by other REITs. Consequently, our Funds From Operations ("FFO"), Normalized FFO, Normalized Adjusted Funds From Operations ("AFFO") and Normalized Funds Available for Distribution ("FAD") may not provide a meaningful measure of our performance as compared to that of other REITs. Since other REITs may not use our definition of these operating performance measures, caution should be exercised when comparing our Company's FFO, Normalized FFO, Normalized AFFO and Normalized FAD to that of other REITs. These financial performance measures do not represent cash generated from operating activities in accordance with generally accepted accounting principles ("GAAP") (these measures do not include changes in operating assets and liabilities) and therefore should not be considered an alternative to net earnings as an indication of operating performance, or to net cash flow from operating activities as determined by GAAP as a measure of liquidity, and are not necessarily indicative of cash available to fund cash needs.

Funds From Operations - FFO

Our FFO per diluted common share for the year endedDecember 31, 2014increased$0.49 (13%) over the same period in 2013. Our normalized FFO for the year endedDecember 31, 2014increased$0.56 (15%) over the same period in 2013, primarily as the result of our new real estate investments in 2013 and 2014. FFO, as defined by the National Association of Real Estate Investment Trusts ("NAREIT") and applied by us, is net income (computed in accordance with GAAP), excluding gains (or losses) from sales of real estate property, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures, if any. The Company’s computation of FFO may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or have a different interpretation of the current NAREIT definition from that of the Company; therefore, caution should be exercised when comparing our Company’s FFO to that of other REITs. Diluted FFO assumes the exercise of stock options and other potentially dilutive securities. Normalized FFO excludes from FFO certain items which, due to their infrequent or unpredictable nature, may create some difficulty in comparing FFO for the current period to similar prior periods, and may include, but are not limited to, impairment of non-real estate assets, gains and losses attributable to the acquisition and disposition of assets and liabilities, and recoveries of previous write-downs.

FFO and normalized FFO are important supplemental measures of operating performance for a REIT. Because the historical cost accounting convention used for real estate assets requires depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen and fallen with market conditions, presentations of operating results for a REIT that uses historical cost accounting for depreciation could be less informative, and should be supplemented with a measure such as FFO. The term FFO was designed by the REIT industry to address this issue.

Adjusted Funds From Operations - AFFO

Our normalized AFFO per diluted common share for the year endedDecember 31, 2014increased$0.32 (9%) over the same period in 2013 due primarily to the impact of real estate investments completed during 2013 and 2014. In addition to the adjustments included in the calculation of normalized FFO, normalized AFFO excludes the impact of any straight-line rent revenue, amortization of the original issue discount on our convertible senior notes and amortization of debt issuance costs.

Normalized AFFO is an important supplemental measure of operating performance for a REIT. GAAP requires a lessor to recognize contractual lease payments into income on a straight-line basis over the expected term of the lease. This straight-line adjustment has the effect of reporting lease income that is significantly more or less than the contractual cash flows received pursuant to the terms of the lease agreement. GAAP also requires the original issue discount of our convertible senior notes and debt issuance costs to be amortized as non-cash adjustments to earnings. Normalized AFFO is useful to our investors as it reflects the growth inherent in the contractual lease payments of our real estate portfolio.

Funds Available for Distribution - FAD

Our normalized FAD per diluted common share for the year endedDecember 31, 2014increased$0.30 (9%) over the same period in 2013 due primarily to the impact of real estate investments completed during 2013 and 2014. In addition to the adjustments included in the calculation of normalized AFFO, normalized FAD excludes the impact of non-cash stock based compensation. Normalized FAD is an important supplemental measure of operating performance for a REIT as a useful indicator of the ability to distribute dividends to shareholders.

47

The following table reconciles net income attributable to common stockholders, the most directly comparable GAAP metric, to FFO, Normalized FFO, Normalized AFFO and Normalized FAD and is presented for both basic and diluted weighted average common shares (in thousands, except share and per share amounts):

	Years ended December 31,
	2014			2013			2012
Net income attributable to common stockholders	$	101,609		$	106,183		$	90,731
Elimination of certain non-cash items in net income:
Depreciation in continuing operations	38,078			20,101			14,772
Depreciation related to noncontrolling interest	(1,002		)	(634		)	(87		)
Depreciation in discontinued operations	—			557			2,209
Net gain on sales of real estate	—			(22,258		)	(11,966		)
Funds from operations	$	138,685		$	103,949		$	95,659
Investment gains	—			(3,256		)	(4,760		)
Debt issuance costs expensed due to credit facility modifications	2,145			416			—
Write-off of unamortized debt premium	(1,655		)	—			—
Non-cash write-off of straight-line rent receivable	932			—			963
Write-offs and expenses due to early lease termination	—			—			297
Acquisition costs under business combination accounting	89			208			—
Legal settlement	—			—			365
Loan impairment and recoveries of previous write-downs	—			1,976			(2,195		)
Other items, net	—			—			(271		)
Normalized FFO	$	140,196		$	103,293		$	90,058
Straight-line lease revenue, net	(16,463		)	(6,560		)	(3,664		)
Non-cash write-off of straight-line rent receivable	(932		)	—			(963		)
Straight-line lease revenue, net, related to noncontrolling interest	71			55			—
Amortization of original issue discount	798			—			—
Amortization of debt issuance costs	1,782			663			320
Normalized AFFO	$	125,452		$	97,451		$	85,751
Non-cash stock based compensation	2,020			2,339			2,168
Normalized FAD	$	127,472		$	99,790		$	87,919
BASIC
Weighted average common shares outstanding	33,375,966			28,362,398			27,811,813
FFO per common share	$	4.16		$	3.67		$	3.44
Normalized FFO per common share	$	4.20		$	3.64		$	3.24
Normalized AFFO per common share	$	3.76		$	3.44		$	3.08
Normalized FAD per common share	$	3.82		$	3.52		$	3.16
DILUTED
Weighted average common shares outstanding	33,416,014			28,397,702			27,838,720
FFO per common share	$	4.15		$	3.66		$	3.44
Normalized FFO per common share	$	4.20		$	3.64		$	3.23
Normalized AFFO per common share	$	3.75		$	3.43		$	3.08
Normalized FAD per common share	$	3.81		$	3.51		$	3.16

NOTE: FFO per diluted common share for the years endedDecember 31, 2013 and 2012 differs by $.08 and $.06, respectively, from the amounts previously reported as a result of our revised interpretation of the NAREIT definition of FFO. Normalized FFO per diluted common share for the years endedDecember 31, 2013 and 2012 differs by $.09 and $.05, respectively, from the amounts previously reported in our periodic filings as a result of our revised interpretation of the NAREIT definition of FFO. Normalized AFFO per diluted common share for the years ended December 31, 2013 and 2012 differ by $.10 and $.07, respectively, from the amounts previously reported as a result of our revised interpretation of the NAREIT definition of FFO. Normalized FAD per diluted common share for the years endedDecember 31, 2013 and 2012 differs by $.02 and $.01, respectively, from the amounts previously reported as a result of changes we made to our definition of FAD. See our Form 8-K dated May 5, 2014 which describes these revisions.

48

Adjusted EBITDA

We consider Adjusted EBITDA to be an important supplemental measure because it provides information which we use to evaluate our performance and serves as an indication of our ability to service debt. We define Adjusted EBITDA as consolidated earnings before interest, taxes, depreciation and amortization, including amounts in discontinued operations, excluding real estate asset impairments and gains on dispositions and certain items which, due to their infrequent or unpredictable nature, may create some difficulty in comparing Adjusted EBITDA for the current period to similar prior periods, and may include, but are not limited to, impairment of non-real estate assets, gains and losses attributable to the acquisition and disposition of assets and liabilities, and recoveries of previous write-downs. Since others may not use our definition of Adjusted EBITDA, caution should be exercised when comparing our Adjusted EBITDA to that of other companies.

The following table reconciles net income, the most directly comparable GAAP metric, to Adjusted EBITDA:

	December 31,
	2014			2013			2012
Net income	$	103,052		$	107,182		$	90,898
Interest expense at contractual rates	23,878			8,944			3,380
Franchise, excise and other taxes	620			616			771
Depreciation in continuing and discontinued operations	38,078			20,658			16,981
Amortization of debt issuance costs and bond discount	2,580			247			320
Net gain on sales of real estate	—			(22,258		)	(11,966		)
Investment gains	—			(3,256		)	(4,760		)
Debt issuance costs expensed due to credit facility modifications	2,145			416			—
Write-off of unamortized debt premium	(1,655		)	—			—
Non-cash write-off of straight-line rent receivable	932			—			963
Write-offs and expenses due to early lease termination	—			—			297
Acquisition costs under business combination accounting	89			208			—
Legal settlement	—			—			365
Loan impairment and recoveries of previous write-downs	—			1,976			(2,195		)
Other items, net	—			—			(271		)
Adjusted EBITDA	$	169,719		$	114,733		$	94,783

The table above does not include the full year impact of our eight retirement communities we recently acquired from Senior Living Communities. If we were to reflect the full year impact of our Senior Living Portfolio, adjusted EBITDA would have been $209,039,000. Our consolidated debt-to-Adjusted EBITDA ratio of 4.1x discussed on page 30 is based on this adjusted EBITDA figure.

49

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Interest Rate Risk

At December 31, 2014, we were exposed to market risks related to fluctuations in interest rates on approximately $374,000,000 of variable-rate indebtedness (excludes $250,000,000 of variable-rate debt that has been hedged through interest-rate swap contracts) and on our mortgage and other notes receivable. The unused portion ($76,000,000 at December 31, 2014) of our credit facility, should it be drawn upon, is subject to variable rates.

Interest rate fluctuations will generally not affect our future earnings or cash flows on our fixed rate debt and loans receivable unless such instruments mature or are otherwise terminated. However, interest rate changes will affect the fair value of our fixed rate instruments. Conversely, changes in interest rates on variable rate debt and investments would change our future earnings and cash flows, but not significantly affect the fair value of those instruments. Assuming a 50 basis point increase or decrease in the interest rate related to variable-rate debt, and assuming no change in the outstanding balance as of December 31, 2014, net interest expense would increase or decrease annually by approximately $1,870,000 or $.05 per common share on a diluted basis.

We use derivative financial instruments in the normal course of business to mitigate interest rate risk. We do not use derivative financial instruments for speculative purposes. Derivatives are included in the Consolidated Balance Sheets at their fair value. We may engage in hedging strategies to manage our exposure to market risks in the future, depending on an analysis of the interest rate environment and the costs and risks of such strategies.

The following table sets forth certain information with respect to our debt (dollar amounts in thousands):

	December 31, 2014						December 31, 2013
	Balance1		% of total		Rate4		Balance1		% of total		Rate4
Fixed rate:
Convertible senior notes	$	200,000	23.0	%	3.25	%	—		—		—
Unsecured term loans2	250,000		28.7	%	3.79	%	120,000		19.5	%	3.67	%
HUD mortgage loans3	47,352		5.4	%	4.04	%	—		—		—
Secured mortgage loan	—		—		—		71,090		11.6	%	6.85	%
Secured mortgage loan	—		—		—		7,234		1.2	%	7.20	%
Variable rate:
Unsecured term loan	—		—		—		250,000		40.6	%	1.97	%
Unsecured revolving credit facility	374,000		42.9	%	1.66	%	167,000		27.1	%	1.87	%
	$	871,352	100.0	%	2.77	%	$	615,324	100.0	%	2.90	%
1 Differs from carrying amount due to unamortized discount.
2 Includes three term loans in 2014 and two term loans in 2013; rate is a weighted average
3 Includes 10 HUD mortgages; rate is a weighted average inclusive of a mortgage insurance premium
4 Total is weighted average rate

The unsecured term loans in the table above give effect to $40,000,000, $80,000,000, and $130,000,000 notional amount interest rate swaps with maturities of April 2019, June 2020 and June 2020, respectively, that effectively convert variable rate debt to fixed rate debt. These loans bear interest at LIBOR plus a spread, currently 175 basis points, based on our Consolidated Coverage Ratio, as defined.

To highlight the sensitivity of our fixed-rate loans to changes in interest rates, the following summary shows the effects on fair value ("FV") assuming a parallel shift of 50 basis points ("bps") in market interest rates for a contract with similar maturities as of December 31, 2014(dollar amounts in thousands):

50

	Balance		Fair Value1		FV reflecting change in interest rates
Fixed rate:					-50 bps		+50 bps
Convertible senior notes	$	200,000	$	203,812	$	209,738	$	198,066
HUD mortgage loans	47,352		50,338		55,789		48,587
1 The change in fair value of our fixed rate debt was due primarily to the overall change in interest rates.

At December 31, 2014, the fair value of our mortgage loans receivable, discounted for estimated changes in the risk-free rate, was approximately $72,435,000. A 50 basis point increase in market rates would decrease the estimated fair value of our mortgage loans by approximately $1,135,000, while a 50 basis point decrease in such rates would increase their estimated fair value by approximately $1,189,000.

Equity Price Risk

We are exposed to equity price risk, which is the potential change in fair value due to a change in quoted market prices. We account for our investments in marketable securities, with a fair value of $15,503,000 at December 31, 2014, as available-for-sale securities. Increases and decreases in the fair market value of our investments in other marketable securities are unrealized gains and losses that are presented as a component of other comprehensive income. The investments in marketable securities are recorded at their fair value based on quoted market prices. Thus, there is exposure to equity price risk. We monitor our investments in marketable securities to consider evidence of whether any portion of our original investment is likely not to be recoverable, at which time we would record an impairment charge to operations. A hypothetical 10% change in quoted market prices would result in a related $1,550,000 change in the fair value of our investments in marketable securities.

51

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Board of Directors and Stockholders

National Health Investors, Inc.

Murfreesboro, Tennessee

We have audited the accompanying consolidated balance sheets of National Health Investors, Inc. as of December 31, 2014 and 2013 and the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2014. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of National Health Investors, Inc. at December 31, 2014 and 2013, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2014, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), National Health Investors, Inc.’s internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated February 17, 2015 expressed an unqualified opinion thereon.

/s/ BDO USA, LLP

Nashville, Tennessee

February 17, 2015

52

NATIONAL HEALTH INVESTORS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

	December 31,
Assets:	2014			2013
Real estate properties:
Land	$	127,566		$	91,770
Buildings and improvements	1,854,855			1,320,567
Construction in progress	6,428			9,665
	1,988,849			1,422,002
Less accumulated depreciation	(212,300		)	(174,262		)
Real estate properties, net	1,776,549			1,247,740
Mortgage and other notes receivable, net	63,630			60,639
Investment in preferred stock, at cost	38,132			38,132
Cash and cash equivalents	3,287			11,312
Marketable securities	15,503			12,650
Straight-line rent receivable	35,154			18,691
Equity-method investment and other assets	50,705			66,656
Total Assets	$	1,982,960		$	1,455,820
Liabilities and Equity:
Debt	$	862,726		$	617,080
Real estate purchase liabilities	3,000			2,600
Accounts payable and accrued expenses	15,718			8,011
Dividends payable	28,864			24,293
Lease deposit liabilities	21,648			22,775
Deferred income	1,071			3,901
Total Liabilities	933,027			678,660
Commitments and Contingencies
National Health Investors Stockholders' Equity:
Common stock, $.01 par value; 60,000,000 and 40,000,000 shares authorized;
37,485,902 and 33,051,176 shares issued and outstanding, respectively	375			330
Capital in excess of par value	1,033,896			753,635
Cumulative net income in excess (deficit) of dividends	(569		)	3,043
Accumulated other comprehensive income	6,223			9,538
Total National Health Investors Stockholders' Equity	1,039,925			766,546
Noncontrolling interest	10,008			10,614
Total Equity	1,049,933			777,160
Total Liabilities and Equity	$	1,982,960		$	1,455,820

The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements.

53

NATIONAL HEALTH INVESTORS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except share and per share amounts)

	Year Ended December 31,
	2014			2013			2012
Revenues:
Rental income	$	166,279		$	106,029		$	81,482
Interest income from mortgage and other notes	7,013			7,633			7,426
Investment income and other	4,217			4,166			4,409
	177,509			117,828			93,317
Expenses:
Depreciation	38,078			20,101			14,772
Interest	26,372			9,229			3,492
Legal	209			784			766
Franchise, excise and other taxes	620			616			771
General and administrative	9,107			9,254			7,799
Loan and realty losses (recoveries), net	—			1,976			(2,195		)
	74,386			41,960			25,405
Income before equity-method investee, investment and other gains,
discontinued operations and noncontrolling interest	103,123			75,868			67,912
Income (loss) from equity-method investee	(71		)	324			45
Investment and other gains	—			3,306			4,877
Income from continuing operations	103,052			79,498			72,834
Discontinued operations
Income from operations - discontinued	—			5,426			6,098
Gain on sale of real estate	—			22,258			11,966
Income from discontinued operations	—			27,684			18,064
Net income	103,052			107,182			90,898
Less: net income attributable to noncontrolling interest	(1,443		)	(999		)	(167		)
Net income attributable to common stockholders	$	101,609		$	106,183		$	90,731
Weighted average common shares outstanding:
Basic	33,375,966			28,362,398			27,811,813
Diluted	33,416,014			28,397,702			27,838,720
Earnings per common share:
Basic:
Income from continuing operations attributable to common stockholders	$	3.04		$	2.77		$	2.61
Discontinued operations	—			.97			.65
Net income per common share attributable to common stockholders	$	3.04		$	3.74		$	3.26
Diluted:
Income from continuing operations attributable to common stockholders	$	3.04		$	2.77		$	2.61
Discontinued operations	—			.97			.65
Net income per common share attributable to common stockholders	$	3.04		$	3.74		$	3.26

The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements.

54

NATIONAL HEALTH INVESTORS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	Year Ended December 31,
	2014			2013			2012
Net income	$	103,052		$	107,182		$	90,898
Other comprehensive income:
Change in unrealized gains on securities	2,853			(234		)	1,645
Less: reclassification adjustment for gains in net income	—			—			(30		)
Increase (decrease) in fair value of cash flow hedge	(2,032		)	3,563			(1,017		)
Less: reclassification adjustment for amounts recognized in net income	(4,136		)	(1,346		)	(224		)
Total other comprehensive income (loss)	(3,315		)	1,983			374
Comprehensive income	99,737			109,165			91,272
Less: comprehensive income attributable to noncontrolling interest	(1,443		)	(999		)	(167		)
Comprehensive income attributable to common stockholders	$	98,294		$	108,166		$	91,105

The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements.

55

NATIONAL HEALTH INVESTORS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended December 31,
	2014			2013			2012
Cash flows from operating activities:
Net income	$	103,052		$	107,182		$	90,898
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation	38,078			20,658			16,981
Amortization	2,611			247			320
Straight-line rental income	(16,463		)	(6,560		)	(3,664		)
Unamortized debt premium written off	(1,655		)	—			—
Write-off of debt issuance costs	2,145			416			—
Loan and realty losses (recoveries), net	—			1,976			(2,195		)
Gain on sale of real estate	—			(22,258		)	(11,966		)
Gain on payoff of mortgage note	—			—			(4,605		)
Gain on purchase liability settlement	—			(3,256		)	—
Net realized gains on sales of marketable securities	—			—			(30		)
Share-based compensation	2,020			2,339			2,168
(Income) loss from equity-method investee	71			(324		)	(45		)
Change in operating assets and liabilities:
Equity-method investment and other assets	(2,334		)	(659		)	(745		)
Accounts payable and accrued expenses	1,448			2,495			(512		)
Deferred income	(2,830		)	1,937			(339		)
Net cash provided by operating activities	126,143			104,193			86,266
Cash flows from investing activities:
Investment in mortgage and other notes receivable	(4,447		)	(11,082		)	(16,241		)
Collection of mortgage and other notes receivable	1,456			18,976			17,463
Investment in real estate	(520,505		)	(635,971		)	(110,601		)
Investment in real estate development	(8,455		)	(11,926		)	—
Investment in renovations of existing real estate	(4,211		)	(6,773		)	—
Payments into facility repair escrows	(1,554		)	—			—
Investment in equity-method investment	—			—			(8,309		)
Payment of real estate purchase liability	(2,600		)	—			(5,222		)
Proceeds from disposition of real estate properties	—			20,952			22,975
Proceeds from sales of marketable securities	—			—			125
Net cash used in investing activities	(540,316		)	(625,824		)	(99,810		)
Cash flows from financing activities:
Net change in borrowings under revolving credit facilities	207,000			103,000			(33,300		)
Proceeds from convertible senior notes	200,000			—			—
Proceeds from issuance of secured debt	38,007			—			—
Borrowings on term loan	130,000			330,000			120,000
Payments of term loans	(328,515		)	(99,655		)	—
Debt issuance costs	(8,443		)	(5,867		)	(766		)
Proceeds from equity offering, net	270,798			282,542			—
Proceeds from exercise of stock options	—			146			(2		)
Distributions to noncontrolling interest	(2,049		)	(1,250		)	(177		)
Dividends paid to stockholders	(100,650		)	(85,145		)	(78,925		)
Net cash provided by financing activities	406,148			523,771			6,830
Increase (decrease) in cash and cash equivalents	(8,025		)	2,140			(6,714		)
Cash and cash equivalents, beginning of period	11,312			9,172			15,886
Cash and cash equivalents, end of period	$	3,287		$	11,312		$	9,172

The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements.

56

NATIONAL HEALTH INVESTORS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(in thousands)

	Year Ended December 31,
	2014			2013		2012
Supplemental disclosure of cash flow information:
Interest paid, net of amounts capitalized	$	22,172		$	7,964	$	3,240
Supplemental disclosure of non-cash investing and financing activities:
Settlement of mortgage note by real estate acquisition	$	—		$	13,741	$	—
Lease escrow deposits	$	—		$	22,775	$	—
Escrow deposit for tax deferred exchange	$	—		$	23,813	$	—
Tax deferred exchange funds applied to investment in real estate	$	23,813		$	—	$	—
Conditional consideration in asset acquisition	$	3,000		$	1,600	$	—
Accounts payable increase due to investments in real estate	$	2,091		$	3,086	$	—
Accounts payable increase due to escrow deposits	$	2,062		$	—	$	—
Assumption of debt in real estate acquisition, at fair value	$	7,858		$	80,528	$	19,250
Noncontrolling interest conveyed in acquisition	$	—		$	—	$	10,964
Increase (decrease) in fair value of cash flow hedge	$	(2,032	)	$	3,563	$	(1,017	)
Assignment of net assets in equity-method investee	$	—		$	817	$	—

The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements.

57

NATIONAL HEALTH INVESTORS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(in thousands except share and per share amounts)

	Common Stock			Capital in Excess of Par Value			Cumulative Net Income in Excess (Deficit) of Dividends			Accumulated Other Comprehensive Income			Total National Health Investors Stockholders' Equity			Noncontrolling Interest			Total Equity
	Shares	Amount
Balances at December 31, 2011	27,751,208	$	278	$	465,678		$	(29,652	)	$	7,181		$	443,485		$	—		$	443,485
Total comprehensive income	—	—		—			90,731			374			91,105			167			91,272
Noncontrolling interest conveyed in acquisition	—	—		—			—			—			—			10,964			10,964
Distributions to noncontrolling interest	—	—		—			—			—			—			(266		)	(266		)
Shares issued on stock options exercised	106,009	1		(3		)	—			—			(2		)	—			(2		)
Share-based compensation	—	—		2,168			—			—			2,168			—			2,168
Dividends declared, $2.86 per common share	—	—		—			(79,574		)	—			(79,574		)	—			(79,574		)
Balances at December 31, 2012	27,857,217	$	279	$	467,843		$	(18,495	)	$	7,555		$	457,182		$	10,865		$	468,047
Total comprehensive income	—	—		—			106,183			1,983			108,166			999			109,165
Distributions to noncontrolling interest	—	—		—			—			—			—			(1,250		)	(1,250		)
Issuance of common stock, net	5,175,000	51		282,490			—			—			282,541			—			282,541
Shares issued on stock options exercised	18,959	—		146			—			—			146			—			146
Share-based compensation	—	—		2,339			—			—			2,339			—			2,339
Assignment of net assets in equity-method investee	—	—		817			—			—			817			—			817
Dividends declared, $2.90 per common share	—	—		—			(84,645		)	—			(84,645		)	—			(84,645		)
Balances at December 31, 2013	33,051,176	$	330	$	753,635		$	3,043		$	9,538		$	766,546		$	10,614		$	777,160
Total comprehensive income	—	—		—			101,609			(3,315		)	98,294			1,443			99,737
Distributions to noncontrolling interest	—	—		—			—			—			—			(2,049		)	(2,049		)
Issuance of common stock, net	4,427,500	44		270,754			—			—			270,798			—			270,798
Shares issued on stock options exercised	7,226	1		—			—			—			1			—			1
Share-based compensation	—	—		2,020			—			—			2,020			—			2,020
Debt conversion feature	—	—		7,487			—			—			7,487			—			7,487
Dividends declared, $3.08 per common share	—	—		—			(105,221		)	—			(105,221		)	—			(105,221		)
Balances at December 31, 2014	37,485,902	$	375	$	1,033,896		$	(569	)	$	6,223		$	1,039,925		$	10,008		$	1,049,933

The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements.

58

NATIONAL HEALTH INVESTORS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

The Company - National Health Investors, Inc. ("NHI" or the "Company"), a Maryland corporation incorporated and publicly listed in 1991, is a real estate investment trust (“REIT”) specializing in sale-leaseback, joint-venture, mortgage and mezzanine financing of need-driven and discretionary senior housing and medical investments. Our portfolio consists of real estate investments in independent, assisted and memory care communities, entrance-fee communities, senior living campuses, skilled nursing facilities, specialty hospitals and medical office buildings. Other investments include mortgages and notes, the preferred stock and marketable securities of other REITs, and a joint venture structured to comply with the provisions of the REIT Investment Diversification Empowerment Act of 2007 (“RIDEA”). Through this RIDEA joint venture, we invest in facility operations, managed by independent third-parties. We fund our real estate investments primarily through: (1) cash flow, (2) debt offerings, including bank lines of credit and ordinary term debt, and (3) the sale of equity securities.

Principles of Consolidation - The accompanying consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries and the joint venture entity over which we exercise control. All inter-company transactions and balances have been eliminated in consolidation. Net income is reduced by the portion of net income attributable to noncontrolling interests.

We apply Financial Accounting Standards Board ("FASB") guidance for our arrangements with variable interest entities ("VIEs") which requires us to identify entities for which control is achieved through means other than voting rights and to determine which business enterprise is the primary beneficiary of the VIE. A VIE is broadly defined as an entity with one or more of the following characteristics: (a) the total equity investment at risk is insufficient to finance the entity's activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about the entity's activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity's activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. We consolidate investments in VIEs when we are determined to be the primary beneficiary of the VIE. We may change our assessment of a VIE due to events such as modifications of contractual arrangements that affect the characteristics or adequacy of the entity's equity investments at risk and the disposal of all or a portion of an interest held by the primary beneficiary.

We identify the primary beneficiary of a VIE as the enterprise that has both: (i) the power to direct the activities of the VIE that most significantly impact the entity's economic performance; and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could be significant to the entity. We perform this analysis on an ongoing basis. At December 31, 2014, we held interests in two unconsolidated VIEs, for neither of which were we the primary beneficiary.

We also apply FASB guidance related to investments in joint ventures based on the type of controlling rights held by the members' interests in limited liability companies that may preclude consolidation by the majority equity owner in certain circumstances in which the majority equity owner would otherwise consolidate the joint venture.

We structure our joint ventures to be compliant with the provisions of the REIT Investment Diversification and Empowerment Act of 2007 ("RIDEA") which permits NHI to receive rent payments through a triple-net lease between a property company and an operating company, and is designed to give NHI the opportunity to capture additional value on the improving performance of the operating company through distributions to a taxable REIT subsidiary ("TRS"). Accordingly, the TRS holds our equity interest in an unconsolidated operating company, which we do not control, and provides an organizational structure that will allow the TRS to engage in a broad range of activities and share in revenues that would otherwise be non-qualifying income under the REIT gross income tests.

Equity-Method Investment - We report our TRS' investment in an unconsolidated entity, over whose operating and financial policies we have the ability to exercise significant influence but not control, under the equity method of accounting. Under this method of accounting, our pro rata share of the entity's earnings or losses is included in our Consolidated Statements of Income. Additionally, we adjust our investment carrying amount to reflect our share of changes in an equity-method investee's capital resulting from its capital transactions.

The initial carrying value of our equity-method investment is based on the fair value of the net assets of the entity at the time we acquired our interest. We estimate fair values of the net assets of our equity-method investee based on discounted cash flow

59

models. The inputs we use in these models are based on assumptions that are within a reasonable range of current market rates for the respective investments.

We evaluate our equity-method investment for impairment whenever events or changes in circumstances indicate that the carrying value of our investment may exceed the fair value. If it is determined that a decline in the fair value of our investment is not temporary, and if such reduced fair value is below its carrying value, an impairment is recorded. Determining the fair value of our equity-method investments involves significant judgment. Our estimates consider all available evidence including the present value of the expected future cash flows discounted at market rates, general economic conditions and other relevant factors.

Noncontrolling Interest - We present the portion of any equity that we do not own in entities that we control (and thus consolidate) as noncontrolling interest and classify such interest as a component of consolidated equity, separate from total NHI stockholders' equity, in our Consolidated Balance Sheets. In addition, we include net income attributable to the noncontrolling interest in net income in our Consolidated Statements of Income.

Use of Estimates - The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Earnings Per Share - The weighted average number of common shares outstanding during the reporting period is used to calculate basic earnings per common share. Diluted earnings per common share assume the exercise of stock options using the treasury stock method, to the extent dilutive. Diluted earnings per share also incorporate the potential dilutive impact of our 3.25% convertible senior notes due 2021. We apply the if-converted method to our convertible debt instruments, the effect of which is that conversion will not be assumed for purposes of computing diluted earnings (loss) per share if the effect would be anti-dilutive.

Fair Value Measurements - Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy is required to prioritize the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs.

The three levels of inputs used to measure fair value are as follows:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

If the fair value measurement is based on inputs from different levels of the hierarchy, the level within which the entire fair value measurement falls is the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. When an event or circumstance alters our assessment of the observability and thus the appropriate classification of an input to a fair value measurement which we deem to be significant to the fair value measurement as a whole, we will transfer that fair value measurement to the appropriate level within the fair value hierarchy.

Real Estate Properties - Real estate properties are recorded at cost or, if acquired through business combination, at fair value. Cost or fair value at the time of acquisition is allocated among land, buildings, tenant improvements, lease and other intangibles, and personal property. For properties acquired in transactions accounted for as asset purchases, the purchase price allocation is based on the relative fair values of the assets acquired. Cost includes capitalized interest during construction periods. We use the straight-line method of depreciation for buildings over their estimated useful lives of 40 years, and improvements over their estimated useful lives ranging from 3 to 25 years.

We evaluate the recoverability of the carrying value of our real estate properties on a property-by-property basis. On a quarterly basis, we review our properties for recoverability when events or circumstances, including significant physical changes in the property, significant adverse changes in general economic conditions and significant deteriorations of the underlying cash flows

60

of the property, indicate that the carrying amount of the property may not be recoverable. The need to recognize an impairment charge is based on estimated undiscounted future cash flows from a property compared to the carrying value of that property. If recognition of an impairment charge is necessary, it is measured as the amount by which the carrying amount of the property exceeds the fair value of the property.

We have reclassified for all periods presented the operations of facilities meeting the accounting criteria as either being sold or held for sale as discontinued operations in the Consolidated Statements of Income. Long-lived assets classified as held for sale are reported separately in the Consolidated Balance Sheets. When assets previously classified as being held for sale no longer meet the accounting criteria for such classification, we reclassify those assets as held and used, measured at the lower of their carrying amount before the assets were classified as held for sale (adjusted in the period in which the decision not to sell was made for any depreciation expense that would have been recognized had the assets been continuously classified as held and used) or their fair value at the date of the subsequent decision not to sell. Results of operations of the facilities previously disclosed in our Consolidated Statements of Income as discontinued operations which no longer meet the accounting criteria as held for sale are reclassified into continuing operations for all periods presented. There is no change to reported net income for the prior periods as a result of this reclassification.

Mortgage and Other Notes Receivable - Each quarter, we evaluate the carrying values of our notes receivable on an instrument-by-instrument basis for recoverability when events or circumstances, including the non-receipt of contractual principal and interest payments, significant deteriorations of the financial condition of the borrower and significant adverse changes in general economic conditions, indicate that the carrying amount of the note receivable may not be recoverable. If a note receivable becomes more than 30 days delinquent as to contractual principal or interest payments, the loan is classified as non-performing, and thereafter we recognize all amounts due when received. If necessary, an impairment is measured as the amount by which the carrying amount exceeds the discounted cash flows expected to be received under the note receivable or, if foreclosure is probable, the fair value of the collateral securing the note receivable.

Cash Equivalents - Cash equivalents consist of all highly liquid investments with an original maturity of three months or less.

Concentration of Credit Risks - Our credit risks primarily relate to cash and cash equivalents, investments in preferred stock and investments in mortgage and other notes receivable. Cash and cash equivalents are primarily held in bank accounts and overnight investments. We maintain our bank deposit accounts with large financial institutions in amounts that often exceed federally-insured limits. We have not experienced any losses in such accounts. Our mortgages and other notes receivable consist primarily of secured loans on facilities. Our investment in preferred stock is in another healthcare REIT.

Our financial instruments, principally our investments in preferred stock, marketable securities, and notes receivable, are subject to the possibility of loss of the carrying values as a result of either the failure of other parties to perform according to their contractual obligations or changes in market prices which may make the instruments less valuable. We obtain collateral in the form of mortgage liens and other protective rights and continually monitor these rights in order to reduce such possibilities of loss. We evaluate the need to provide for reserves for potential losses on our financial instruments based on management's periodic review of our portfolio on an instrument-by-instrument basis.

Marketable Securities - Our investments in marketable securities are classified as available-for-sale securities. Unrealized gains and losses on available-for-sale securities are recorded in stockholders' equity. We evaluate our marketable securities for other-than-temporary impairments on at least a quarterly basis. Realized gains and losses from the sale of available-for-sale securities are determined on a specific-identification basis.

A decline in the market value of any available-for-sale or held-to-maturity security below cost that is deemed to be other-than-temporary results in an impairment to reduce the carrying amount to fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other-than-temporary, we consider whether we have the ability and intent to hold the investment until a market price recovery and consider whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and duration of the impairment, changes in value subsequent to year-end and forecasted performance of the investment.

Deferred Costs - Costs incurred to acquire debt are amortized by the effective interest method over the term of the related debt.

Deferred Income - Deferred income primarily includes non-refundable loan and lease commitment fees received by us, which are amortized into income over the expected period of the related loan or lease. In the event that our financing commitment to a potential borrower or lessee expires, the related commitment fees are recognized into income immediately. Commitment fees may be charged based on the terms of the loan or lease agreements and the creditworthiness of the parties.

61

Rental Income - Base rental income is recognized using the straight-line method over the term of the lease. Under certain leases, we receive additional contingent rent, which is calculated on the increase in revenues of the lessee over a base year or base quarter. We recognize contingent rent annually or quarterly when, based on the actual revenues of the lessee, receipt of such income is probable since the target threshold has been achieved. Revenue from minimum lease payments under our leases is recognized on a straight-line basis to the extent that future lease payments are considered collectible. Lease payments that depend on a factor directly related to future use of the property, such as an increase in annual revenues over a base year, are considered to be contingent rentals and are excluded from minimum lease payments.

If rental income calculated on a straight-line basis exceeds the cash rent due under a lease, the difference is recorded as an increase to straight-line rent receivable in the Consolidated Balance Sheets and an increase in rental income in the Consolidated Statements of Income. If rental income on a straight-line basis is calculated to be less than cash received, there is a decrease in the same accounts.

We identify a lease as non-performing if a required payment is not received within 30 days of the date it is due. Our policy related to rental income on non-performing leased real estate properties is to recognize rental income in the period when the related cash is received. As of December 31, 2014, we had not identified any of our leases as non-performing.

Mortgage Interest Income - Mortgage interest income is recognized based on the interest rates and principal amounts outstanding on the mortgage notes receivable. Under certain mortgages, we receive additional contingent interest, which is calculated on the increase in the current year revenues of a borrower over a base year. We identify a mortgage loan as non-performing if a required payment is not received within 30 days of the date it is due. Our policy related to mortgage interest income on non-performing mortgage loans is to recognize mortgage interest income in the period when the cash is received. As of December 31, 2014, we had not identified any of our mortgages as non-performing.

Investment Income and Other - Investment income and other includes dividends when declared and interest when earned from investments in preferred stock and marketable securities of other healthcare REITs, interest on cash and cash equivalents when earned, and amortization of deferred income. Realized gains and losses on sales of marketable securities using the specific-identification method are included as a separate component of continuing operations in the Consolidated Statements of Income as investment and other gains.

Derivatives - In the normal course of business, we are subject to risk from adverse fluctuations in interest rates. We have periodically chosen to manage this risk through the use of derivative financial instruments, primarily interest rate swaps. Counterparties to these contracts are major financial institutions. We are exposed to credit loss in the event of nonperformance by these counterparties. We do not use derivative instruments for trading or speculative purposes. Our objective in managing exposure to market risk is to limit the impact on cash flows.

To qualify for hedge accounting, our interest rate swaps must effectively reduce the risk exposure that they are designed to hedge. In addition, at inception of a qualifying cash flow hedging relationship, the underlying transaction or transactions must be, and are expected to remain, probable of occurring in accordance with our related assertions. All of our hedges are cash flow hedges.

We recognize all derivative instruments, including embedded derivatives required to be bifurcated, as assets or liabilities at their fair value in the Consolidated Balance Sheets. Changes in the fair value of derivative instruments that are not designated as hedges or that do not meet the criteria of hedge accounting are recognized in earnings. For derivatives designated in qualifying cash flow hedging relationships, the change in fair value of the effective portion of the derivatives is recognized in accumulated other comprehensive income (loss), whereas the change in fair value of the ineffective portion is recognized in earnings. Gains and losses are reclassified from accumulated other comprehensive income into earnings once the underlying hedged transaction is recognized in earnings.

Federal Income Taxes - We intend at all times to qualify as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. Effective October 1, 2012, we began recording income tax expense or benefit with respect to one of our subsidiaries which is taxed as a Taxable REIT Subsidiary ("TRS") under provisions similar to those applicable to regular corporations. Aside from such income taxes which may be applicable to the taxable income in the TRS, we will not be subject to U.S. federal income tax, provided that we continue to qualify as a REIT and make distributions to stockholders equal to or in excess of our taxable income. Accordingly, no provision for federal income taxes has been made in the consolidated financial statements, except for the provision on the taxable income of the TRS which is included in franchise, excise and other taxes in the Consolidated Statements of Income. Our failure to continue to qualify under the applicable REIT qualification rules and regulations would have a material adverse impact on our financial position, results of operations and cash flows.

62

Earnings and profits, which determine the taxability of dividends to stockholders, differ from net income reported for financial reporting purposes due primarily to differences in the basis of assets, estimated useful lives used to compute depreciation expense, gains on sales of real estate, non-cash compensation expense and recognition of commitment fees.

Our tax returns filed for years beginning in 2011 are subject to examination by taxing authorities. We classify interest and penalties related to uncertain tax positions, if any, in our consolidated financial statements as a component of income tax expense.

Segment Disclosures - We are in the business of owning and financing health care properties. We are managed as one segment, rather than multiple segments for internal purposes and for internal decision making.

Reclassifications - The results of operations for facilities sold, including the gain or loss on such sales, have been reported for periods prior to the adoption of ASU 2014-08 as discontinued operations in the Consolidated Statements of Income. The reclassifications to retrospectively reflect the disposition of these facilities had no impact on previously reported net income.

New Accounting Pronouncements - In the first quarter of 2014, we adopted ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Under ASU 2014-08, disposals will be reported as discontinued operations only when the disposal represents a strategic shift that will have a major effect on our operations and financial results. Previously, we reported the disposition of components that were either reporting units, subsidiaries, or asset groups as discontinued operations. ASU 2014-08 is effective for all disposals (or classifications as held for sale) of components that occur on or after December 15, 2014. We have elected early adoption, under which terms we will prospectively apply ASU 2014-08 and report as discontinued operations only those disposals (or classifications as held for sale) that have not been previously reported.

In May 2014 the FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 provides a principles-based approach for a broad range of revenue generating transactions, including the sale of real estate, which will generally require more estimates and more judgment and more disclosures than under current guidance. Because this ASU specifically excludes lease contracts from its scope, its application is not expected to impact our recognition of rental income on a straight-line basis. ASU 2014-09 is effective for public entities for annual periods beginning after December 15, 2016, including interim periods therein. Early adoption is prohibited. We have yet to determine the method by which ASU 2014-09 will be adopted in 2017 and we are continuing to study the effect that our eventual adoption of this standard will have on our reported financial position and results of operation, the extent of which cannot be reasonably estimable at this time.

NOTE 2. REAL ESTATE

As of December 31, 2014, we owned 172 health care real estate properties located in 31 states and consisting of 103 senior housing communities, 64 skilled nursing facilities, 3 hospitals and 2 medical office buildings. Our senior housing properties include assisted living facilities, senior living campuses, independent living facilities, and entrance-fee communities. These investments (excluding our corporate office of $900,000) consisted of properties with an original cost of approximately $1,987,949,000, rented under triple-net leases to 24 lessees.

Acquisitions and New Leases of Real Estate

During the year endedDecember 31, 2014, we made the following real estate investments and commitments as described below (dollars in thousands):

Operator	Properties	Asset Class	Amount
Senior Living Communities	8	SHO	$	476,000
Bickford Senior Living	1	SHO	16,488
Prestige Senior Living	4	3 SNF & 1 SHO	45,115
Chancellor Health Care	2	SHO	17,150
Senior Living Management	1	SHO	700
			$	555,453

Senior Living Communities

On December 17, 2014, we acquired, from Senior Living Communities, LLC (“Senior Living”), a portfolio of eight retirement communities (the “Senior Living Portfolio”) with a total of 1,671 units, for a cash purchase price of $476,000,000 from Health Care REIT, Inc. and certain of its affiliates.

63

Because the Senior Living Portfolio was previously leased by Health Care REIT, Inc., we accounted for acquisition of the 100% interest in the Senior Living Portfolio using the acquisition method as prescribed by FASB Accounting Standards Codification ("ASC") Topic 805, Business Combinations. As part of this transaction, we recognized all identifiable tangible assets at fair value on the date of acquisition (there were no identifiable intangible assets or liabilities assumed) and attributed $32,410,000 of the purchase price to fair value of the land, $443,590,000 to the fair value of building and improvements and expensed $89,000 in transaction costs at closing.

We have leased the Senior Living Portfolio under a triple-net master lease with an affiliate of Senior Living which will continue to manage the facilities. The 15-year master lease contains two 5-year renewal options and provides for initial cash rent of $31,000,000, subject to annual escalators of 4% in years two through four and 3% thereafter. In accordance with the lease agreement, Senior Living has funded a $10,000,000 escrow which serves as security for Senior Living's performance under the master lease.

For the eight Senior Living properties acquired in a business combination and discussed above, the unaudited pro forma revenue, net income and net income available to common stockholders of the combined entity is provided below as if the acquisition date had been January 1, 2013 (in thousands except per share amounts):

	2014		2013
Revenue	$	215,398	$	157,250
Net income	$	119,929	$	125,460
Net income available to common stockholders	$	118,486	$	124,461
Basic earnings per common share	$	3.16	$	3.80
Diluted earnings per common share	$	3.16	$	3.79

Supplemental pro forma information above includes revenues from the newly executed Senior Living lease recognized on a straight-line basis, depreciation, and appropriate interest costs.

For the year ended December 31, 2014, we had recorded $1,533,000 in lease revenue and had net earnings of $1,403,000 from this acquisition.

Prestige

In March 2014 we completed a $40,115,000 purchase of 3 skilled nursing facilities in Oregon totaling 196 beds and a 105-unit assisted living facility in Idaho from Prestige Senior Living ("Prestige"). We have a commitment to fund contingent earn-out payments up to a maximum of $6,390,000 based on the achievement of certain financial metrics as measured periodically through December 31, 2015. Because the facilities were owner-occupied, we accounted for the acquisition as an asset purchase. At acquisition, we estimated probable contingent payments of $3,000,000 to be likely and have, accordingly, reflected that amount in the Consolidated Balance Sheet. Contingent payments earned will be an addition to the lease base when funded.

We have leased the 4 facilities to Prestige with a 15-year term at an initial rate of 8.4% plus fixed annual escalators. In addition, at two of the Oregon facilities we have committed to invest $2,000,000 for capital improvements which are expected to be completed by June 30, 2015. This investment will be added to the basis on which the lease amount is calculated.

Chancellor

On September 30, 2014, we completed a $5,650,000 acquisition of a 25-unit assisted living facility in Milwaukie, Oregon and leased the facility to Chancellor Health Care, LLC ("Chancellor") for an initial term of 15 years with two10-year renewal options. The initial lease rate is 8.0% with fixed annual escalators. Because the facility was owner-occupied, we accounted for the acquisition as an asset purchase.

In June 2014 we acquired a 56-unit assisted living/memory care facility in Sacramento, California for $11,500,000 and leased the facility to Chancellor for an initial term of 15 years, plus renewal options. The initial lease rate is 8.0% with fixed annual escalators. Because the facility was owner-occupied, we accounted for the acquisition as an asset purchase.

64

Bickford

As of December 31, 2014, we owned an 85% equity interest and an affiliate of Bickford, Sycamore Street, LLC ("Sycamore") owned a 15% equity interest in our consolidated subsidiary ("PropCo") which owns 31 assisted living/memory care facilities. The facilities are leased to an operating company, ("OpCo"), in which we retain a non-controlling 85% ownership interest. Our joint venture is structured to comply with the provisions of RIDEA.

On October 31, 2014, our subsidiary, PropCo, acquired a 101-unit assisted living facility located in Middletown, Ohio for $16,488,000, including $65,000 in transaction costs and assumption of secured debt at an interest rate of 2.9% with an outstanding principal balance of $9,535,000 and an estimated fair value of $7,858,000. The facility was leased to OpCo under an existing master lease and provides for fixed annual escalators. Because the facility was owner-occupied, the acquisition was accounted for as an asset purchase.

The current annual contractual rent from OpCo to PropCo, excluding the development properties, is $22,595,000, plus fixed annual escalators. During the quarter ended December 31, 2014, PropCo completed major construction and received a certificate of occupancy on an assisted living facility which had been under development. OpCo is continuing the lease-up of 3 facilities, 2 of which opened in the fourth quarter of 2013. Once the facilities stabilize, an annual rental amount will be determined between the parties. Under the terms of the current development lease agreement, PropCo receives rent of 9% on the total amount of development costs, including land, which totaled $7,811,000 at December 31, 2014. NHI has an exclusive right to Bickford's future acquisitions, development projects and refinancing transactions.

Of our total revenue from continuing operations, $21,421,000 (12%), $14,586,000 (12%) and $5,164,000 (6%) were recorded as rental income from Bickford for the years ended December 31, 2014, 2013, and 2012, respectively.

On February 5, 2015, we announced a new development program pursuant to which our RIDEA joint venture with Bickford will develop five senior housing communities in Illinois and Virginia. Construction is slated to start in early 2015 with openings planned for 2016. The total estimated project cost is $55,000,000. Each community will consist of 60 private-pay assisted living and memory care units managed by Bickford Senior Living.

Holiday

In December 2013 we acquired 25 independent living facilities from Holiday, an affiliate of Holiday Retirement. We have leased this portfolio to NH Master Tenant, LLC, a subsidiary of Holiday. Our tenant continues to operate the facilities pursuant to a management agreement with a Holiday-affiliated manager. The master lease term of 17 years began in December 2013 and provides for initial base rent of $31,915,000 plus annual escalators of 4.5% in the first 3 years and a minimum of 3.5% each year thereafter.

Of our total revenue from continuing operations, $43,817,000 (25%) was recorded as rental income from Holiday for the year endedDecember 31, 2014.

NHC

As of December 31, 2014, we leased 42 health care facilities under two master leases to NHC, a publicly-held company and the lessee of our legacy properties. The facilities leased to NHC consist of 3 independent living facilities and 39 skilled nursing facilities (4 of which are subleased to other parties for whom the lease payments are guaranteed to us by NHC). These facilities are leased to NHC under the terms an amended Master Lease Agreement dated October 17, 1991 ("the 1991 lease") which includes our 35 remaining legacy properties and a Master Lease Agreement dated August 30, 2013 ("the 2013 lease"), discussed below, which includes seven skilled nursing facilities acquired from ElderTrust on August 31, 2013.

The 1991 lease has been amended to extend the lease expiration to December 31, 2026. There are two additional 5-year renewal options, each at fair rental value of such leased property as negotiated between the parties and determined without including the value attributable to any improvements to the leased property voluntarily made by NHC at its expense. Under the terms of the 1991 lease, the base annual rental is $30,750,000 and rent escalates by 4% of the increase, if any, in each facility's revenue over a 2007 base year. The 2013 lease provides for a base annual rental of $3,450,000 and has a lease expiration of August 2028. Under the terms of the 2013 lease, rent escalates 4% of the increase in each facility's revenue over the 2014 base year. For both the 1991 lease and the 2013 lease, we refer to this additional rent component as “percentage rent.” During the last three years of the 2013 lease, NHC will have the option to purchase the facilities for $49,000,000.

65

The following table summarizes the percentage rent received and recognized from NHC (in thousands):

	Year Ended December 31,
	2014		2013		2012
Current year	$	2,292	$	2,275	$	1,530
Prior year final certification1	15		746		997
Total percentage rent	$	2,307	$	3,021	$	2,527

¹ For purposes of the percentage rent calculation described in the Master Lease Agreement, NHC’s annual revenue by facility for a given year is certified to NHI by March 31st of the following year.

Of our total revenue from continuing operations, $36,446,000 (21%), $34,756,000 (29%) and $33,056,000 (35%) in 2014, 2013 and 2012, respectively, were derived from NHC.

Senior Living Management

In September 2014 we entered into an agreement with our current tenant, Senior Living Management, to fund up to $700,000 in renovations to our Greensboro, Georgia assisted living facility. When the renovations are complete, the total amount will be added to the lease base. As of December 31, 2014, $13,000 had been funded.

In February 2015, we transitioned the lease of four assisted living facilities in Louisiana to our tenant, Senior Living Management. The termination of the prior lease resulted in a write-off for accounting purposes during 2014 of $932,000 in straight-line rent receivable. The scheduled lease payments are the same as in the former lease. The current lease has an initial term of 15 years plus fixed annual escalators after the first year. In addition, we agreed to fund up to $280,000 in renovations and improvements which will be added to the lease basis used to determine monthly rent.

Future Minimum Lease Payments

At December 31, 2014, the future minimum lease payments (excluding percentage rent) to be received by us under our operating leases with our tenants are as follows (in thousands):

2015	$	182,195
2016	183,255
2017	183,353
2018	172,155
2019	167,924
Thereafter	1,531,958
	$	2,420,840

NOTE 3. EQUITY-METHOD INVESTMENT AND OTHER ASSETS

Our equity-method investment in OpCo and other assets consist of the following (in thousands):

	As of December 31,
	2014		2013
Equity-method investment in OpCo	$	9,424	$	9,494
Debt issuance costs	11,491		7,366
Accounts receivable and other assets	3,818		2,502
Replacement reserve and tax escrows	4,324		706
Lease escrow deposits	21,648		22,775
Escrow deposit for tax deferred exchange	—		23,813
	$	50,705	$	66,656

Upon the acquisition of our equity method investment in OpCo, in 2012, our purchase price was allocated to the assets acquired based upon their estimated relative fair values. Accounting guidance for equity method investments requires that we account for

66

the difference between the cost basis of our investment in OpCo and our pro rata share of the amount of underlying equity in the net assets of OpCo as though OpCo were a consolidated subsidiary. Accordingly, the excess of the original purchase price over the fair value of identified tangible assets at acquisition of $8,986,000 is treated as implied goodwill and is subject to periodic review for impairment in conjunction with our equity method investment. When we acquired the Bickford properties in June 2013, an assignment was entered into whereby the operations of the 17 facilities were conveyed by an affiliate of Bickford to OpCo. The transaction mandated the effective cut-off of operating revenues and expenses and the settlement of operating assets and liabilities as of the acquisition date. Specified remaining net tangible assets were assigned to OpCo at the transferor's carryover basis resulting in an adjustment, through NHI's capital in excess of par value to our equity method investment in OpCo, of $817,000. We monitor and periodically review our equity method investment in OpCo for impairment to determine whether a decline, if any, in the value of the investment is other-than temporary. We noted no decline in value as of December 31, 2013.

OpCo is intended to be self-financing, and aside from initial investments therein, no direct support has been provided by NHI to OpCo since inception on September 30, 2012. While PropCo's rental revenues associated with the related properties are sourced from OpCo, a decision to furnish additional direct support would be at our discretion and not obligatory. As a result, we believe our maximum exposure to loss at December 31, 2014, due to our investment in OpCo, would be limited to our equity interest. We have concluded that OpCo meets the accounting criteria to be considered a VIE. However, because we do not control the entity, nor do we have any role in the day-to-day management, we are not the primary beneficiary of the entity, and we account for our investment using the equity method. There have been no distributions declared during the years ended December 31, 2014 and 2013.

At December 31, 2014, we held lease escrow deposits of $21,648,000 in regard to our lease with Holiday. The Holiday deposits include $21,275,000 as a lease security deposit which remains for the term of the 17-year lease which commenced in December 2013 and is payable to Holiday at the end of the lease term. The additional $374,000 represents net amounts reserved for specified capital improvements after reimbursements of $1,126,000 to Holiday.

Reserves for replacement, insurance and tax escrows include amounts required to be held on deposit in accordance with regulatory agreements governing our Fannie Mae and HUD mortgages.

In March 2014 we utilized $23,813,000 held with a qualified intermediary to provide a portion of the funding for the Prestige acquisition discussed in Note 2.

NOTE 4. MORTGAGE AND OTHER NOTES RECEIVABLE

At December 31, 2014, we had investments in mortgage notes receivable with a carrying value of $34,850,000 secured by real estate and UCC liens on the personal property of 11 facilities and other notes receivable with a carrying value of $28,780,000 guaranteed by significant parties to the notes or by cross-collateralization of properties with the same owner. At December 31, 2013, we had investments in mortgage notes receivable with a carrying value of $34,926,000 and other notes receivable with a carrying value of $25,713,000. No allowance for doubtful accounts was considered necessary at December 31, 2014 or 2013.

In connection with the Senior Living acquisition, discussed in Note 2, we are providing a $15,000,000 revolving line of credit, the maturity of which will mirror the term of the master lease. Borrowings will be used to finance construction projects within the Senior Living Portfolio, including building additional units. Up to $5,000,000 of the facility may be used to meet general working capital needs. Amounts outstanding under the facility, $2,816,000 at December 31, 2014, bear interest at an annual rate equal to the 10-year U.S. Treasury rate, 2.17% at December 31, 2014, plus 6%.

In July 2013 we extended a $9,200,000 loan with our joint venture partner, Sycamore Street, LLC (“Sycamore”), an affiliate of Bickford to fund a portion of their acquisition of six senior housing communities consisting of 342 units. The loan is guaranteed by principals of Sycamore and has a two year maturity plus a one year extension option and 12% annual interest. Also, in June 2014 we entered into a $500,000 revolving loan to Sycamore, to fund pre-development expenses related to potential future projects. Interest is payable monthly at 10% and the note matures in August 2015. At December 31, 2014, this revolving loan was fully drawn. As a result of the June 2013 loan, PropCo acquired a $97,000,000 purchase option on the properties which is exercisable over the term of the loan.

These loans and the related purchase option constitute variable interests, and we have concluded that Sycamore meets the accounting criteria to be considered a VIE. However, because we do not control Sycamore, nor do we have any role in the day-to-day management, we are not the primary beneficiary of the entity, and we account for support given to Sycamore at historical cost. Sycamore is intended to be self-financing, and our direct support has been limited to the loans described herein and a $3,550,000 letter of credit for the benefit of Sycamore. Further, a decision to furnish additional direct support would be at our

67

discretion and not obligatory. As a result, we believe our maximum exposure to loss at December 31, 2014, due to our investment in Sycamore, would be limited to the amount of our loans and letter of credit.

In September 2012 we evaluated the recoverability of mortgage notes receivable from SeniorTrust of Florida, Inc., a Tennessee non-profit organization. As a result of that evaluation, and a further assessment in March 2013, we recorded impairments of $2,300,000 and $4,037,000 in 2012 and 2013, respectively. In June 2013 we received full payment in satisfaction of the remaining balance of $15,000,000 on these notes.

In August 2013 the mortgage notes receivable due from ElderTrust of Florida, Inc. with an aggregate principal balance of $13,741,000 were applied to the purchase price of seven skilled nursing facilities in Massachusetts and New Hampshire. See Note 8 for more information on our transactions with SeniorTrust and ElderTrust.

In September 2013 we received $3,293,000 as full payment upon the final maturity of a mortgage note secured by a skilled nursing facility located in Georgia. Of the amount received, we recorded $2,061,000 as a recovery of a previous writedown.

In December 2012, we received from our current borrower a payment of $13,830,000 in full settlement of our note receivable secured by three skilled nursing facilities in Georgia formerly owned by Allgood Healthcare, Inc. The payment consisted of note principal of $4,650,000, accrued interest of $80,000, a recovery of a previous writedown of $4,495,000, and a note gain of $4,605,000. The recovery and gain are included in separate components of our income from continuing operations in our Consolidated Statements of Income. These facilities had previously been involved in bankruptcy proceedings with the former owner.

NOTE 5. INVESTMENT IN PREFERRED STOCK, AT COST

We received $3,273,000 in preferred dividends from LTC (a publicly-traded REIT) for each of the years ended December 31, 2014, 2013 and 2012, on our investment in 2,000,000 shares of their cumulative preferred stock carried at its original cost of $38,132,000. The preferred stock, which was purchased in September 1998, is not listed on a stock exchange, is considered a non-marketable security and is recorded at cost in our Consolidated Balance Sheets. The non-voting preferred stock is convertible into 2,000,000 shares of LTC common stock whose closing price at December 31, 2014 was $43.17 per share. The preferred stock has an annual cumulative coupon rate of 8.5% payable quarterly and a liquidation preference of $19.25 per share. While not the fair value of our preferred stock investment, we provide the above information as pertinent to the reader's estimation of the fair value of our investment. In accordance with ASC Topic 825 Financial Instruments, paragraph 10-50 Disclosure-Overall, we have determined that due to excessive costs, it is not practicable to estimate the fair value of our cost basis investment in preferred stock because of inherent subjectivities in refining the estimate to a degree that is likely to materially augment the information provided above. Further, we have identified no events that may have had an adverse effect on its fair value which would have required revisiting the instrument's carrying value.

NOTE 6. INVESTMENTS IN MARKETABLE SECURITIES

Our investments in marketable securities include available-for-sale securities which are reported at fair value. Unrealized gains and losses on available-for-sale securities are presented as a component of accumulated other comprehensive income. Realized gains and losses from securities sales are determined based upon specific identification of the securities.

Marketable securities consist of the following (in thousands):

	December 31, 2014				December 31, 2013
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Common stock of other healthcare REITs	$	4,088	$	15,503	$	4,088	$	12,650

Gross unrealized gains related to available-for-sale securities were $11,415,000 at December 31, 2014 and $8,562,000 at December 31, 2013.

During 2014, 2013 and 2012 we recognized $716,000, $667,000, and $628,000, respectively, of dividend income from our marketable securities and have included these amounts in investment income and other in the Consolidated Statements of Income.

68

NOTE 7. DEBT

Debt consists of the following (in thousands):

	As of December 31,
	2014		2013
Convertible senior notes - unsecured (net of discount of $6,963)	$	193,037	$	—
Revolving credit facility - unsecured	374,000		167,000
Bank term loans - unsecured	250,000		370,000
HUD mortgage loans (net of discount of $1,662)	45,689		—
Fannie Mae term loans - secured (including premium of $1,756)	—		80,080
	$	862,726	$	617,080

In March 2014 we issued $200,000,000 of 3.25% senior unsecured convertible notes due April 2021 (the "Notes"). Interest is payable April 1st and October 1st of each year. The Notes are convertible at an initial conversion rate of 13.926 shares of common stock per $1,000 principal amount, representing a conversion price of approximately $71.81 per share for a total of approximately 2,785,200 underlying shares. The conversion rate is subject to adjustment upon the occurrence of certain events, as defined in the indenture governing the Notes, but will not be adjusted for any accrued and unpaid interest except in limited circumstances. The conversion option is considered an "optional net-share settlement conversion feature," meaning that upon conversion, NHI's conversion obligation may be satisfied, at our option, in cash, shares of common stock or a combination of cash and shares of common stock. Because the conversion price is in excess of the average stock price for the year, the impact of the conversion option is currently anti-dilutive to the earnings per share calculation and as such has no effect on our earnings per share.

The embedded conversion options (1) do not require net cash settlement, (2) are not conventionally convertible but can be classified in stockholders’ equity under ASC 815-40, and (3) are considered indexed to NHI’s own stock. Therefore, the conversion feature satisfies the conditions to qualify for an exception to the derivative liability rules, and the Notes are split into debt and equity components. The value of the debt component is based upon the estimated fair value of a similar debt instrument without the conversion feature at the time of issuance and was estimated to be approximately $$192,238,000. The $7,762,000 difference between the contractual principal on the debt and the value allocated to the debt was recorded as an equity component and represents the estimated value of the conversion feature of the instrument. The excess of the contractual principal amount of the debt over its estimated fair value, the original issue discount, is amortized to interest expense using the effective interest method over the estimated term of the Notes, projected to extend through October 2020, at issuance. The effective interest rate used to amortize the debt discount and the debt component of the issue costs for the Notes was approximately 3.9% based on our estimated non-convertible borrowing rate at the date the Notes were issued.

The total cost of issuing the Notes was $6,063,000, of which $5,788,000 was allocated to the debt component and is subject to amortization over the estimated term of the notes. The remaining $275,000 was allocated to the equity component.

In March 2014, we entered into an amended $700,000,000 senior unsecured credit facility. The facility can be expanded, subject to certain conditions, up to an additional $130,000,000. The amended credit facility provides for: (1) a $450,000,000 unsecured, revolving credit facility that matures in March 2019 (inclusive of an embedded 1-year extension option) with interest at 150 basis points over LIBOR; (2) a $130,000,000 unsecured term loan that matures in June 2020 with interest at 175 basis points over LIBOR; and (3) two existing term loans which remain in place totaling $120,000,000, maturing in June 2020 and bearing interest at 175 basis points over LIBOR. The employment of interest rate swaps for our fixed term debt leaves only our revolving credit facility exposed to variable rate risk. Our swaps and the financial instruments to which they relate are described in the table below, under the caption “Interest Rate Swap Agreements.”

At December 31, 2014, we had $76,000,000 available to draw on the revolving portion of the credit facility. The unused commitment fee is 40 basis points per annum. The unsecured credit facility requires that we maintain certain financial ratios within limits set by our creditors. To date, these ratios, which are calculated quarterly, have been within the limits required by the credit facility agreements.

On December 31, 2014, we paid off Fannie Mae mortgage loans with remaining principal balances of $70,131,000 and $7,136,000 using funds drawn from our revolving credit facility.

In July and September 2014 we obtained mortgage loans totaling $38,007,000 from the U.S. Department of Housing and Urban Development secured by nine properties in our joint venture with an affiliate of Bickford. The mortgage notes require monthly

69

payments of principal and interest of 4.65% in the first year and 4.3% thereafter (inclusive of mortgage insurance premium) and mature in August and October 2049.

In October 2014 we assumed a HUD mortgage loan with an outstanding principal balance of $9,535,000 and an estimated fair value of $7,858,000. The HUD mortgage requires monthly payments of principal and interest of 2.9% (inclusive of mortgage insurance premium) and matures in October 2047.

The aggregate outstanding balance of our HUD mortgage loans as of December 31, 2014 was $47,352,000.

The following table summarizes interest expense (in thousands):

	Year Ended December 31,
	2014			2013			2012
Interest expense at contractual rates	$	23,878		$	8,944		$	3,380
Capitalized interest	(576		)	(378		)	(208		)
Amortization of debt premiums, discounts and issuance costs	2,580			247			320
Unamortized premium written off as a result of debt payoff	(1,655		)	—			—
Debt issuance costs expensed due to credit facility modifications	2,145			416			—
Total interest expense	$	26,372		$	9,229		$	3,492

Interest Rate Swap Agreements

We have entered into interest rate swap agreements to fix the interest rates on our bank term loans. The critical terms of this swap agreement are essentially identical to those of the term loans and thus, in accordance with ASC Topic 815 Derivative Instruments and Hedging Activities, the swap is considered a perfectly effective "cash flow hedge." Accordingly, changes in the fair value of this cash flow hedge are included in accumulated other comprehensive income rather than net income in our Consolidated Statements of Income. Gains and losses are reclassified from accumulated other comprehensive income into earnings once the underlying hedged transaction is recognized in earnings. If the fair value of the hedge is an asset, we include it in our Consolidated Balance Sheets in other assets, and, if a liability, as a component of accrued expenses.

Below is a summary of our swap agreements at December 31, 2014 (dollars in thousands):

Date Entered	Maturity Date	Fixed Rate	Rate Index	Notional Amount		Fair Value
May 2012	April 2019	3.29%	1-month LIBOR	$	40,000	$	(98	)
June 2013	June 2020	3.86%	1-month LIBOR	$	80,000	$	(1,814	)
March 2014	June 2020	3.91%	1-month LIBOR	$	130,000	$	(3,281	)

See Note 14 for fair value disclosures about our interest rate swap agreements.

NOTE 8. COMMITMENTS AND CONTINGENCIES

Bickford

During the quarter ended December 31, 2014, our consolidated subsidiary, PropCo, completed major construction and received certificates of occupancy on one assisted living facility which had been under development. Our costs incurred to date, including land, were $7,811,000. In February 2014 we entered into a commitment of $2,785,000 on a letter of credit for the benefit of our joint venture partner, Sycamore, an affiliate of Bickford, which holds a minority interest in PropCo. In December 2014 we increased the amount of our commitment on the letter of credit to $3,550,000.

In June 2014 we entered into a $500,000 revolving loan with Sycamore to fund pre-development expenses related to potential future projects. Interest is payable monthly at 10% and the note matures in August 2015. At December 31, 2014 the revolving loan was fully drawn.

70

Chancellor

In October 2013, we entered into a $7,500,000 commitment to build a 46-unit free-standing assisted living and memory care community, expanding our Linda Valley senior living campus in Loma Linda, California. We began construction 2014 and had funded $4,231,000 as of December 31, 2014. The initial lease term is for 15 years at an annual rate of 9% plus a fixed annual escalator. We also committed to provide up to $500,000 for renovations and improvements related to our recent acquisition of a 63-unit senior housing community in Baltimore, Maryland which we have leased to Chancellor Health Care. We began renovations in 2014 and as of December 31, 2014 had funded $353,000. We receive rent income on funds advanced for both construction projects.

Discovery

As a lease inducement, we have a contingent commitment to fund a series of payments up to $2,500,000 in connection with our September 2013 lease to Discovery of a senior living campus in Rainbow City, Alabama. Discovery would earn the contingent payments upon obtaining, and maintaining, a specified lease coverage ratio. As earned, the payments would be due in installments of $750,000 in each of years two and three of the lease with the residual due in year four. As of December 31, 2014, incurring the contingent payments was not considered probable. Accordingly, no provision for these payments is reflected in the consolidated financial statements.

Fundamental

In April 2013, we completed the purchase of two skilled nursing facilities located in Canton and Corinth, Texas for a purchase price of $26,150,000 in cash, plus consideration related to the Corinth facility of $1,600,000 conditional upon meeting future performance measures. In March 2014 upon satisfactory achievement of the required operating metrics, we made the full $1,600,000 payment to Fundamental.

Helix Healthcare

In March 2010, we completed a purchase/leaseback transaction with Helix Healthcare (“Helix”) for $12,500,000. The purchase price includes a conditional payment of $1,000,000. In December 2014 we made the full $1,000,000 payment to Helix.

Holiday Retirement

In connection with our December 2013 purchase/leaseback of 25 independent living facilities from Holiday Retirement, we we collected escrow deposits of $1,500,000 for capital improvements to the acquired facilities. As of December 31, 2014, we had funded $1,126,000 toward this commitment.

Kentucky River

In March 2012, we entered into a construction commitment to Jackson Hospital Corporation, an affiliate of Community Health Systems, to provide up to $8,000,000 for extensive renovations and additions to our Kentucky River Medical Center, a general acute care hospital in Jackson, Kentucky. This investment will be added to the basis on which the lease amount is calculated. The construction project commenced during the first quarter of 2013 and is expected to be completed in 2015. Total construction costs incurred as of December 31, 2014 were $7,583,000.

Prestige

We have agreed to fund capital improvements of up to $2,000,000 in connection with two of the facilities we lease to Prestige. The capital improvements will be an addition to our original investment in the properties when funded and will be included in the lease base. As of December 31, 2014, we had funded $1,555,000 of this commitment. Additionally, we have committed to fund contingent earn out payments up to a maximum of $6,390,000 based on the achievement of certain financial metrics as measured periodically through December 31, 2015. At acquisition, we estimated probable contingent payments of $3,000,000 to be likely and have reflected that amount in the consolidated financial statements. Contingent payments earned will be included in the lease base when funded.

Santé

We have a $2,000,000 loan commitment to our borrower, Santé Partners, LLC (“Santé”). This additional loan amount becomes available to the borrower when the 70-bed transitional rehabilitation hospital, completed in March 2011, achieves certain operating

71

metrics. NHI also has the option to purchase and lease back the hospital when it achieves a predetermined level of stabilized net operating income.

We are committed to fund a $3,500,000 expansion and renovation program at our Silverdale, Washington senior living campus and as of December 31, 2014 had funded $2,621,000, which was added to the basis on which the lease amount is calculated. In connection with our Silverdale, Washington senior living campus, we have a contingent commitment to fund two lease inducement payments of $1,000,000 each. Santé would earn the payments upon attaining and sustaining a specified lease coverage ratio. If earned, the first payment would be due after the second lease year and the second payment would be due after the third lease year. At acquisition, incurring the contingent payments was not considered probable. Accordingly, no provision for these payments is reflected in the consolidated financial statements.

Senior Living Communities

In connection with the Senior Living acquisition, we are providing a $15,000,000 revolving line of credit to Senior Living, the maturity of which will mirror the term of the master lease. Borrowings will be used to finance construction projects within the Senior Living Portfolio, including building additional units. Up to $5,000,000 of the facility may be used to meet general working capital needs. Amounts outstanding under the facility, $2,816,000 at December 31, 2014, bear interest at an annual rate equal to the 10-year U.S. Treasury rate, 2.17% at December 31, 2014, plus 6%.

Senior Living Management

In September 2014 we entered into an agreement with our current tenant, Senior Living Management, to fund up to $700,000 for renovations to our Greensboro, Georgia assisted living facility. When the renovations are complete, the total amount will be added to the lease base. As of December 31, 2014, $13,000 of this commitment had been funded.

Litigation

Our facilities are subject to claims and suits in the ordinary course of business. Our lessees and borrowers have indemnified, and are obligated to continue to indemnify us, against all liabilities arising from the operation of the facilities, and are further obligated to indemnify us against environmental or title problems affecting the real estate underlying such facilities. While there may be lawsuits pending against certain of the owners and/or lessees of the facilities, management believes that the ultimate resolution of all such pending proceedings will have no material adverse effect on our financial condition, results of operations or cash flows.

As previously disclosed, in November 2008, the Company was served with a Civil Investigative Demand by the Office of the Tennessee Attorney General (“OTAG”), which indicated that the OTAG was investigating transactions between the Company and three Tennessee not-for-profit corporations. NHI has provided the OTAG with requested information and documents and has been working with the OTAG with respect to this investigation. The investigation with respect to one of the not-for-profit corporations was settled in 2009. A receiver had been appointed for the two remaining not-for-profit corporations, SeniorTrust of Florida, Inc. ("SeniorTrust") and ElderTrust of Florida, Inc ("ElderTrust"). As previously disclosed, the receiver of SeniorTrust and ElderTrust had caused those entities to bring lawsuits against NHI and NHC.

In April 2013, NHI, NHC and the receiver for ElderTrust and SeniorTrust entered into a settlement agreement resolving all remaining issues. The settlement agreement also resolved the OTAG investigation and was approved by the Court on May 3, 2013. Thus, the investigation has now been resolved with respect to all three of the not-for-profit corporations. The settlement agreement provided that SeniorTrust pay NHI $15,000,000 in cash in full settlement of the notes receivable between NHI and SeniorTrust, which payment was made on June 27, 2013.

The settlement agreement also provided that NHI purchase ElderTrust's seven skilled nursing facilities in Massachusetts and New Hampshire. As consideration for the purchase from ElderTrust, NHI canceled a note receivable from ElderTrust with a principal balance of $13,741,000 and paid cash in the amount of $23,676,000, inclusive of closing costs. As discussed in further detail at Note 2, the purchase was completed on August 30, 2013. NHI has leased these facilities to NHC, the current operator.

NOTE 9. INVESTMENT AND OTHER GAINS

The following table summarizes our investment and other gains (in thousands):

72

	Year Ended December 31,
	2014		2013		2012
Gain on payoff of mortgage note receivable	$	—	$	—	$	4,605
Gains on sales of marketable securities	—		—		30
Gain on purchase liability settlement	—		3,256		—
Other gains	—		50		242
	$	—	$	3,306	$	4,877

NOTE 10. SHARE-BASED COMPENSATION

We recognize share-based compensation for all stock options granted over the requisite service period using the fair value of these grants as estimated at the date of grant using the Black-Scholes pricing model, and all restricted stock granted over the requisite service period using the market value of our publicly-traded common stock on the date of grant.

Share-Based Compensation Plans

The Compensation Committee of the Board of Directors ("the Committee") has the authority to select the participants to be granted options; to designate whether the option granted is an incentive stock option ("ISO"), a non-qualified option, or a stock appreciation right; to establish the number of shares of common stock that may be issued upon exercise of the option; to establish the vesting provision for any award; and to establish the term any award may be outstanding. The exercise price of any ISO’s granted will not be less than 100% of the fair market value of the shares of common stock on the date granted and the term of an ISO may not be more than ten years. The exercise price of any non-qualified options granted will not be less than 100% of the fair market value of the shares of common stock on the date granted unless so determined by the Committee.

In May 2012, our stockholders approved the 2012 Stock Incentive Plan ("the 2012 Plan") pursuant to which 1,500,000 shares of our common stock were made available to grant as share-based payments to employees, officers, directors or consultants. As of December 31, 2014, there were 755,000 shares available for future grants under the 2012 Plan. The individual restricted stock and option grant awards vest over periods up to five years. The term of the options under the 2012 Plan is up to ten years from the date of grant.

In May 2005, our stockholders approved the NHI 2005 Stock Option Plan ("the 2005 Plan") pursuant to which 1,500,000 shares of our common stock were made available to grant as share-based payments to employees, officers, directors or consultants. As of December 31, 2014, there were 20,635 shares available for future grants under the 2005 Plan. The individual restricted stock and option grant awards vest over periods up to ten years. The term of the options outstanding under the 2005 Plan is up to ten years from the date of grant.

Compensation expense is recognized only for the awards that ultimately vest. Accordingly, forfeitures that were not expected may result in the reversal of previously recorded compensation expense. The compensation expense reported for the years endedDecember 31, 2014, 2013 and 2012 was $2,020,000 and $2,339,000, $2,168,000,respectively, and is included in general and administrative expense in the Consolidated Statements of Income.

Determining Fair Value of Option Awards

The fair value of each option award was estimated on the grant date using the Black-Scholes option valuation model with the weighted average assumptions indicated in the following table. Each grant is valued as a single award with an expected term based upon expected employee and termination behavior. Compensation cost is recognized on the graded vesting method over the requisite service period for each separately vesting tranche of the award as though the award were, in substance, multiple awards. The expected volatility is derived using daily historical data for periods preceding the date of grant. The risk-free interest rate is the approximate yield on the United States Treasury Strips having a life equal to the expected option life on the date of grant. The expected life is an estimate of the number of years an option will be held before it is exercised.

Stock Options

The weighted average fair value per share of options granted was $4.93, $6.41 and $6.36 for 2014, 2013 and 2012, respectively.

73

The fair value of each grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

	2014	2013	2012
Dividend yield	5.0%	4.5%	6.0%
Expected volatility	21.5%	23.8%	32.0%
Expected lives	2.8 years	2.8 years	3.9 years
Risk-free interest rate	0.63%	0.35%	0.32%

Stock Option Activity

The following tables summarize our outstanding stock options:

				Weighted Average
	Number		Weighted Average	Remaining	Aggregate
	of Shares		Exercise Price	Contractual Life (Years)	Intrinsic Value
Outstanding December 31, 2011	509,422		$42.03
Options granted under 2005 Plan	340,000		$47.52
Options exercised under 1997 Plan	(19,266	)	$33.26
Options exercised under 2005 Plan	(618,481	)	$43.63
Outstanding December 31, 2012	211,675		$46.60
Options granted under 2005 Plan	360,000		$64.49
Options exercised under 2005 Plan	(55,001	)	$45.31
Outstanding December 31, 2013	516,674		$59.20
Options granted under 2012 Plan	400,000		$61.31
Options exercised under 2005 Plan	(26,670	)	$47.52
Options exercised under 2012 Plan	(3,333	)	$61.31
Options forfeited under 2012 Plan	(15,000	)	$64.49
Outstanding December 31, 2014	871,671		$60.43	3.41	$	8,308,000
Exercisable December 31, 2014	644,990		$59.79	3.25	$	6,559,000

				Remaining
Grant	Number	Exercise		Contractual
Date	of Shares	Price		Life in Years
2/22/2011	15,000	$	45.58	1.15
2/25/2011	33,336	$	46.22	1.15
2/21/2012	81,668	$	47.52	2.15
2/25/2013	345,000	$	64.49	3.16
2/25/2014	396,667	$	61.31	4.16
Outstanding December 31, 2014	871,671

The weighted average remaining contractual life of all options outstanding at December 31, 2014 is 3.4 years. Including outstanding stock options, our stockholders have authorized an additional 1,647,306 shares of common stock that may be issued under the share-based payments plans.

74

The following table summarizes our outstanding non-vested stock options:

	Number of Shares		Weighted Average Grant Date Fair Value
Non-vested December 31, 2013	193,344		$6.95
Options granted under 2012 Plan	400,000		$4.93
Options vested under 2012 Plan	(306,657	)	$5.34
Options vested under 2005 Plan	(60,006	)	$7.23
Non-vested December 31, 2014	226,681		$5.64

At December 31, 2014, we had $366,943 of unrecognized compensation cost related to unvested stock options, net of expected forfeitures, which is expected to be recognized over the following periods: 2015 - $330,619 and 2016 - $36,324. Stock-based compensation is included in general and administrative expense in the Consolidated Statements of Income.

The intrinsic value of the total options exercised for the years ended December 31, 2014, 2013 and 2012 was $465,000 or $15.51 per share; $1,084,000 or $19.71 per share, and $5,527,000 or $8.67 per share, respectively.

NOTE 11. DISCONTINUED OPERATIONS

We have reclassified, for periods before adoption of ASU 2014-08, the operations of facilities meeting the accounting criteria for properties sold or held for sale as discontinued operations.

In December 2013, we sold three older skilled nursing facilities to affiliates of our current tenant, Fundamental, for $18,500,000 and recorded a gain of $1,269,000 for financial statement purposes. Our lease revenue from these facilities was $3,316,000 and $3,231,000 for the years endedDecember 31, 2013 and 2012, respectively. Pursuant to the purchase option, rents associated with the two remaining properties will be fixed at $250,000 per month, without escalation, through the first renewal term in February 2016.

In October 2013, our tenant, Weatherly Associates, LLC, exercised their option to purchase a senior housing facility in Pennsylvania for $5,315,000. The sale was completed in December 2013, and we recorded a gain of $1,619,000 for financial statement purposes. Our lease revenue from the facility was $352,000 and $403,000 for the years endedDecember 31, 2013 and 2012, respectively.

In August 2013 we sold six older skilled nursing facilities to NHC for $21,000,000 and recorded a gain of $19,370,000 for financial statement purposes. Our lease revenue from the facilities was $2,294,000 and $3,368,000 for the years endedDecember 31, 2013 and 2012, respectively.

In December 2012, our tenant, Sunrise Senior Living, exercised its option to purchase our assisted living facility in Edison, New Jersey. Our lease revenue from the facility was $1,302,000 for the year endedDecember 31, 2012.

75

Income from discontinued operations is summarized below (in thousands):

	Year Ended December 31,
	2014		2013		2012
Revenues:
Rental income	$	—	$	5,962	$	8,304
Other income	—		21		3
Expenses:
Depreciation	—		557		2,209
Operating income	—		5,426		6,098
Gain on sale of real estate	—		22,258		11,966
Total discontinued operations	$	—	$	27,684	$	18,064
Weighted average common shares outstanding:
Basic	33,375,966		28,362,398		27,811,813
Diluted	33,416,014		28,397,702		27,838,720
Discontinued operations income per share:
Basic	$	—	$	.97	$	.65
Diluted	$	—	$	.97	$	.65

76

NOTE 12. EARNINGS AND DIVIDENDS PER COMMON SHARE

The weighted average number of common shares outstanding during the reporting period is used to calculate basic earnings per common share. Diluted earnings per common share assume the exercise of stock options and vesting of restricted shares using the treasury stock method, to the extent dilutive. The conversion price within our convertible debt was in excess of the average stock price for the year, thus the impact of the conversion option was anti-dilutive to the year-end earnings per share calculation and as such had no effect on our earnings per share. If current prices increase above the initial conversion price, some dilution will be attributable to the conversion feature going forward.

The following table summarizes the average number of common shares and the net income used in the calculation of basic and diluted earnings per common share (in thousands, except share and per share amounts):

	Year Ended December 31,
	2014		2013		2012
Income from continuing operations attributable to common stockholders	$	101,609	$	78,499	$	72,667
Discontinued operations	—		27,684		18,064
Net income attributable to common stockholders	$	101,609	$	106,183	$	90,731
BASIC:
Weighted average common shares outstanding	33,375,966		28,362,398		27,811,813
Income from continuing operations per common share	$	3.04	$	2.77	$	2.61
Discontinued operations per common share	—		.97		.65
Net income per common share	$	3.04	$	3.74	$	3.26
DILUTED:
Weighted average common shares outstanding	33,375,966		28,362,398		27,811,813
Stock options and restricted shares	40,048		35,304		26,907
Average dilutive common shares outstanding	33,416,014		28,397,702		27,838,720
Income from continuing operations per common share	$	3.04	$	2.77	$	2.61
Discontinued operations per common share	—		.97		.65
Net income per common share	$	3.04	$	3.74	$	3.26
Incremental shares excluded since anti-dilutive:
Stock options with an exercise price in excess of the average market price for our common shares	13,831		23,883		—
Regular dividends declared per common share	$	3.08	$	2.90	$	2.64
Special dividends declared per common share1	$	—	$	—	$	.22
1Special dividends are paid in January following the year in which they are declared

NOTE 13. INCOME TAXES

Beginning with our inception in 1991, we have elected to be taxed as a REIT under the Internal Revenue Code (the "Code"). We have elected that our subsidiary established on September 30, 2012 in connection with the Bickford arrangement (which holds our ownership interest in an operating company) be taxed as a taxable REIT subsidiary ("TRS") under provisions of the Code. The TRS is subject to federal and state income taxes like those applicable to regular corporations. Aside from such income taxes which may be applicable to the taxable income in the TRS, we will not be subject to federal income tax provided that we continue to qualify as a REIT and make distributions to stockholders equal to or in excess of our taxable income.

77

Per share dividend payments to common stockholders for the last three years are characterized for tax purposes as follows:

(Unaudited)	2014		2013		2012
Ordinary income	$	2.53548	$	2.85895	$	2.6287
Capital gain	—		0.16493		0.0113
Return of capital	0.54452		0.09612		—
Dividends paid per common share	$	3.08	$	3.12	$	2.64

Our consolidated provision for state and federal income tax for the years ended 2014, 2013, and 2012 was $133,000, $267,000, and $137,000, respectively. For the years ended 2014, 2013, and 2012 we had no material deferred state or federal income tax.

All of our current taxes for 2014 relates to a franchise tax levied by the state of Texas that has attributes of an income tax. For 2013, tax expense of $128,000 relates to our equity interest in the unconsolidated operating company whose interest is owned by our TRS described above, and $139,000 relates to the Texas franchise tax. The tax expense for 2012 relates entirely to such tax levied in Texas. Our income taxes described above are combined in franchise, excise and other taxes in our Consolidated Statements of Income.

We made state income tax payments of $139,000, $129,000,and $96,000 for the years ended December 31, 2014, 2013, and 2012, respectively.

NOTE 14. FAIR VALUE OF FINANCIAL INSTRUMENTS

Our financial assets and liabilities measured at fair value (based on the hierarchy of the three levels of inputs described in Note 1) on a recurring basis include marketable securities, derivative financial instruments and contingent consideration arrangements. Marketable securities consist of common stock of other healthcare REITs. Derivative financial instruments include our interest rate swap agreements. Contingent consideration arrangements relate to certain provisions of recent real estate purchase agreements involving both business combinations.

Marketable securities. We utilize quoted prices in active markets to measure debt and equity securities; these items are classified as Level 1 in the hierarchy and include the common and preferred stock of other healthcare REITs.

Derivative financial instruments. Derivative financial instruments are valued in the market using discounted cash flow techniques. These techniques incorporate primarily Level 2 inputs. The market inputs are utilized in the discounted cash flow calculation considering the instrument's term, notional amount, discount rate and credit risk. Significant inputs to the derivative valuation model for interest rate swaps are observable in active markets and are classified as Level 2 in the hierarchy.

Contingent consideration. Contingent consideration arrangements are classified as Level 3 and are valued using unobservable inputs about the nature of the contingent arrangement and the counter-party to the arrangement, as well as our assumptions about the probability of full settlement of the contingency.

Assets and liabilities measured at fair value on a recurring basis are as follows (in thousands):

		Fair Value Measurement
	Balance Sheet Classification	December 31, 2014		December 31, 2013
Level 1
Common stock of other healthcare REITs	Marketable securities	$	15,503	$	12,650
Level 2
Interest rate swap asset	Other assets	$	—	$	975
Interest rate swap liability	Accrued expenses	$	5,193	$	—
Level 3
Contingent consideration	Real estate purchase liabilities	$	3,000	$	2,600

78

The following table presents a reconciliation of Level 3 liabilities measured at fair value on a recurring basis for the years ended December 31, 2014 and 2013(in thousands):

	Fair Value Beginning of Period		Transfers Into Level 3		Realized Gains and (Losses)		Purchases, Issuances and Settlements			Fair Value at End of Period		Total Period Losses Included in Earnings Attributable to the Change in Unrealized Losses Relating to Assets Held at End of Year
2014
Contingent consideration	$	2,600	$	—	$	—	$	400		$	3,000	$	—
2013
Contingent consideration	$	4,256	$	—	$	—	$	(1,656	)	$	2,600	$	—

Carrying values and fair values of financial instruments that are not carried at fair value at December 31, 2014 and 2013 in the Consolidated Balance Sheets are as follows (in thousands):

	Carrying Amount				Fair Value Measurement
	2014		2013		2014		2013
Level 2
Variable rate debt	$	624,000	$	537,000	$	624,000	$	537,000
Fixed rate debt	$	238,726	$	80,080	$	254,150	$	79,365
Level 3
Mortgage and other notes receivable	$	63,630	$	60,639	$	72,435	$	67,201

The fair value of mortgage and other notes receivable is based on credit risk and discount rates that are not observable in the marketplace and therefore represents a Level 3 measurement.

Fixed rate debt. Fixed rate debt is classified as Level 2 and its value is based on quoted prices for similar instruments or calculated utilizing model derived valuations in which significant inputs are observable in active markets.

Carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to their short-term nature. The fair value of our borrowings under our credit facility are reasonably estimated at their carrying value at December 31, 2014 and 2013, due to the predominance of floating interest rates, which generally reflect market conditions.

NOTE 15. LIMITS ON COMMON STOCK OWNERSHIP

The Company's charter contains certain provisions which are designed to ensure that the Company's status as a REIT is protected for federal income tax purposes. One of these provisions ensures that any transfer which would cause NHI to be beneficially owned by fewer than 100 persons or would cause NHI to be “closely held” under the Internal Revenue Code would be void which, subject to certain exceptions, results in no stockholder being allowed to own, either directly or indirectly pursuant to certain tax attribution rules, more than 9.9% of the Company's common stock. In 1991, the Board created an exception to this ownership limitation for Dr. Carl E. Adams, his spouse, Jennie Mae Adams, and their lineal descendants. Effective May 12, 2008, we entered into Excepted Holder Agreements with W. Andrew Adams and certain members of his family. These written agreements are intended to restate and replace the parties' prior verbal agreement. Based on the Excepted Holder Agreements currently outstanding, the ownership limit for all other stockholders is approximately 7.5%. Our charter gives our Board of Directors broad powers to prohibit and rescind any attempted transfer in violation of the ownership limits. These agreements were entered into in connection with the Company's stock purchase program pursuant to which the Company announced that it would purchase up to 1,000,000 shares of its common stock in the public market from its stockholders.

A separate agreement was entered into with each of the spouse and children of Dr. Carl E. Adams and others within Mr. W. Andrew Adams' family. We needed to enter into such an agreement with each family member because of the complicated ownership attribution rules under Internal Revenue Code. The Agreement permits the Excepted Holders to own common stock in excess of 9.9% up to the limit specifically provided in the individual agreement and not lose rights with respect to such shares. However, if the stockholder's stock ownership exceeds the limit then such shares in excess of the limit become “Excess Stock” and lose voting rights and entitlement to receive dividends. The Excess Stock classification remains in place until the stockholder no longer exceeds the threshold limit specified in the Agreement. The purpose of these agreements is to ensure that the Company does not

79

violate the prohibition against a REIT being closely held. W. Andrew Adams' Excess Holder Agreement also provides that he will not own shares of stock in any tenant of the Company if such ownership would cause the Company to constructively own more than a 9.9% interest in such tenant. This prohibition is designed to protect the Company's status as a REIT for tax purposes.

NOTE 16. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

The following table sets forth selected quarterly financial data for the two most recent fiscal years (in thousands, except per share amounts).

2014	Quarter Ended
	March 31,		June 30,		September 30,		December 31,
Net revenues	$	43,136	$	44,160	$	44,478	$	45,735
Investment and other gains	—		—		—		—
Income from continuing operations attributable to common stockholders	23,533		25,294		25,250		27,532
Discontinued operations	—		—		—		—
Net income attributable to common stockholders	$	23,533	$	25,294	$	25,250	$	27,532
Weighted average common shares outstanding:
Basic	33,051,415		33,052,750		33,055,992		34,343,706
Diluted	33,085,232		33,087,283		33,088,570		34,402,969
Earnings per common share:
Basic:
Income from continuing operations attributable to common stockholders	$	.71	$	.77	$	.76	$	.80
Discontinued operations	—		—		—		—
Net income attributable to common stockholders	$	.71	$	.77	$	.76	$	.80
Diluted:
Income from continuing operations attributable to common stockholders	$	.71	$	.76	$	.76	$	.80
Discontinued operations	—		—		—		—
Net income attributable to common stockholders	$	.71	$	.76	$	.76	$	.80

80

2013	Quarter Ended
	March 31,		June 30,		September 30,		December 31,
Net revenues	$	27,104	$	27,089	$	30,845	$	32,790
Investment and other gains	22		14		3		3,267
Income from continuing operations attributable to common stockholders	14,050		18,300		22,035		24,114
Discontinued operations	1,693		1,621		20,709		3,661
Net income attributable to common stockholders	$	15,743	$	19,921	$	42,744	$	27,775
Weighted average common shares outstanding:
Basic	27,876,176		27,876,176		27,876,176		29,831,176
Diluted	27,911,584		27,913,727		27,905,545		29,860,614
Earnings per common share:
Basic:
Income from continuing operations attributable to common stockholders	$	.50	$	.65	$	.79	$	.81
Discontinued operations	.06		.06		.74		.12
Net income attributable to common stockholders	$	.56	$	.71	$	1.53	$	.93
Diluted:
Income from continuing operations attributable to common stockholders	$	.50	$	.65	$	.79	$	.81
Discontinued operations	.06		.06		.74		.12
Net income attributable to common stockholders	$	.56	$	.71	$	1.53	$	.93

Certain quarterly financial information shown above differs from amounts previously reported in the Forms 10-Q and Form 10-K for those periods due to reclassifications to retrospectively reflect the dispositions or planned dispositions of certain facilities as discontinued operations for all periods presented.

81

NOTE 17. SUBSEQUENT EVENTS

Loan Investment

On February 10, 2015, we finalized our agreement to lend Life Care Services, through its LCS-Westminster Partnership III LLP (“LCS-WP”) up to $154,500,000. The agreement conveys a mortgage interest and will facilitate the construction of Phase II of Timber Ridge at Talus (“Timber Ridge”), a Type-A Continuing Care Retirement Community in the Seattle area.

The loans take the form of two notes under a master credit agreement. The senior loan (“Note A”) will total $60,000,000 at a 6.75% interest rate with 10 basis-point escalators after year three, and has a term of 10 years. We funded $33,100,000 of Note A at closing. Note A is interest-only and is locked to prepayment for three years. After year three, the prepayment penalty starts at 5% and declines 1% per year. The loan will be freely prepayable during the last 6 months of its term. The second note ("Note B") is a construction loan for up to $94,500,000 at an interest rate of 8% and a 5 year maturity. We anticipate funding Note B over twenty months and will be repaid with entrance fees once Phase II opens.

NHI has a purchase option on the property for the greater of fair market value or $115,000,000. A purchase option window of fifteen months will contingently open in year five or upon earlier stabilization, as defined. The purchase option constitutes a variable interest in Phase II of the Timber Ridge project, creating an interest in specified assets of LCS-WP but not in LCS-WP as a whole. Since LCS-WP is not a VIE, the specified Timber Ridge assets are not subject to the consolidation guidance governing Variable Interest Entities.

Refinancing

On January 15, 2015 we issued $125,000,000 of 8-year notes with a coupon of 3.99% and $100,000,000 of 12-year notes with a coupon of 4.51% to a leading provider of private placement fixed rate debt. The notes are unsecured and require quarterly payments of interest only until maturity. We used the proceeds from the notes to pay down borrowings on our revolving credit facility.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Control and Procedures. As of December 31, 2014, an evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer (“CEO”) and Chief Accounting Officer (“CAO”), of the effectiveness of the design and operation of management’s disclosure controls and procedures (as defined in rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934) to ensure information required to be disclosed in our filings under the Securities and Exchange Act of 1934, is (i) recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms; and (ii) accumulated and communicated to our management, including our CEO and our CAO, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving desired control objectives, and management is necessarily required to apply its judgment when evaluating the cost-benefit relationship of potential controls and procedures. Based upon the evaluation, the CEO and CAO concluded that the design and operation of these disclosure controls and procedures were effective as of December 31, 2014.

There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting identified in management’s evaluation during the three months ended December 31, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

82

MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of National Health Investors, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The Company's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company's internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2014 using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on that assessment, management concluded that the Company's internal control over financial reporting was effective as of December 31, 2014. The Company's independent registered public accounting firm, BDO USA, LLP, has issued an attestation report on the effectiveness of the Company's internal control over financial reporting included herein.

83

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

National Health Investors, Inc.

Murfreesboro, Tennessee

We have audited National Health Investors, Inc.’s internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). National Health Investors, Inc.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying "Item 9A, Management’s Annual Report on Internal Control Over Financial Reporting." Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, National Health Investors, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of National Health Investors, Inc. as of December 31, 2014 and 2013, and the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2014 and our report dated February 17, 2015 expressed an unqualified opinion thereon.

/s/ BDO USA, LLP

Nashville, Tennessee

February 17, 2015

84

ITEM 9B. OTHER INFORMATION.

None.

85

PART III.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

We have filed with the New York Stock Exchange (“NYSE”) the Annual CEO Certification regarding the Company’s compliance with the NYSE’s Corporate Governance listing standards as required by Section 303A.12(a) of the NYSE Listed Company Manual. Additionally, we have filed as exhibits to this Annual Report on Form 10-K for the year ended December 31, 2014, the applicable certifications of our Chief Executive Officer and our Chief Accounting Officer as required under Section 302 of the Sarbanes-Oxley Act of 2002.

Incorporated by reference from the information in our definitive proxy statement for the 2015 annual meeting of stockholders, which we will file within 120 days of the end of the fiscal year to which this report relates.

ITEM 11.  EXECUTIVE COMPENSATION.

Incorporated by reference from the information in our definitive proxy statement for the 2015 annual meeting of stockholders, which we will file within 120 days of the end of the fiscal year to which this report relates.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

Incorporated by reference from the information in our definitive proxy statement for the 2015 annual meeting of stockholders, which we will file within 120 days of the end of the fiscal year to which this report relates.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Incorporated by reference from the information in our definitive proxy statement for the 2015 annual meeting of stockholders, which we will file within 120 days of the end of the fiscal year to which this report relates.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Incorporated by reference from the information in our definitive proxy statement for the 2015 annual meeting of stockholders, which we will file within 120 days of the end of the fiscal year to which this report relates.

PART IV.

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a)    (1)    Financial Statements

The Consolidated Financial Statements are included in Item 8 and are filed as part of this report.

(2)    Financial Statement Schedules

The Financial Statement Schedules and Report of Independent Registered Public Accounting Firm on Financial Statement Schedules are listed in Exhibit 99.1.

(3)    Exhibits

Exhibits required as part of this report are listed in the Exhibit Index.

86

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	NATIONAL HEALTH INVESTORS, INC.
	BY:/s/ J. Justin Hutchens
	J. Justin Hutchens
	President, Chief Executive Officer
Date: February 17, 2015	and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ J. Justin Hutchens	President, Chief Executive Officer	February 17, 2015
J. Justin Hutchens	and Director
	(Principal Executive Officer)
/s/ Roger R. Hopkins	Chief Accounting Officer	February 17, 2015
Roger R. Hopkins	(Principal Financial Officer and Principal Accounting Officer)
/s/ W. Andrew Adams	Chairman of the Board	February 17, 2015
W. Andrew Adams
/s/ James R. Jobe	Director	February 17, 2015
James R. Jobe
/s/ Robert A. McCabe, Jr.	Director	February 17, 2015
Robert A. McCabe, Jr.
/s/ Robert T. Webb	Director	February 17, 2015
Robert T. Webb

87

NATIONAL HEALTH INVESTORS, INC.

FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2014

EXHIBIT INDEX
Exhibit No.	Description	Page No. or Location
3.1	Articles of Incorporation	Incorporated by reference to Exhibit 3.1 to Form S-11 Registration Statement No. 33-41863
3.2	Amendment to Articles of Incorporation dated as of May 1, 2009	Incorporated by reference to Exhibit A to the Company's Definitive Proxy Statement filed March 23, 2009
3.3	Amendment to Articles of Incorporation approved by shareholders on May 2, 2014	Incorporated by reference to Exhibit 3.3 to Form 10-Q dated August 4, 2014
3.4	Restated Bylaws as amended November 5, 2012	Incorporated by reference to Exhibit 3.3 to Form 10-K filed February 15, 2013
3.5	Amendment No. 1 to Restated Bylaws dated February 14, 2014	Incorporated by reference to Exhibit 3.4 to Form 10-K filed February 14, 2014
4.1	Form of Common Stock Certificate	Incorporated by reference to Exhibit 39 to Form S-11 Registration Statement No. 33-41863
4.2	Indenture, dated as of March 25, 2014, between National Health Investors, Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee	Incorporated by reference to Exhibit 4.1 to Form 8-K dated March 31, 2014
4.3	First Supplemental Indenture, dated as of March 25, 2014, to the Indenture, dated as of March 25, 2014, between National Health Investors, Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee	Incorporated by reference to Exhibit 4.2 to Form 8-K dated March 31, 2014
10.1	Material Contracts	Incorporated by reference to Exhibits 10.1 thru 10.9 to Form S-4 Registration Statement No. 33-41863
10.2	Amendment No. 5 to the Company's Master Agreement to Lease with NHC	Incorporated by reference to Exhibit 10.2 to Form 10-K dated March 10, 2006
10.3	Amendment No. 6 to the Company's Master Agreement to Lease with NHC	Incorporated by reference to Exhibit 10.1 to Form 10-Q dated November 4, 2013
10.4	Amended and Restated Amendment No. 6 to the Company's Master Agreement to Lease with NHC.	Incorporated by reference to Exhibit 10.4 to Form 10-K filed February 14, 2014
*10.5	1997 Stock Option Plan	Incorporated by reference to the 1997 Proxy Statement as filed
*10.6	2005 Stock Option Plan	Incorporated by reference to Exhibit 4.10 to the Company's registration statement on Form S-8 filed August 4, 2005
*10.7	2012 Stock Option Plan	Incorporated by reference to Exhibit A to the Company's Proxy Statement filed March 23, 2012
*10.8	First Amendment to the 2005 Stock Option, Restricted Stock & Stock Appreciation Rights Plan	Incorporated by reference to Appendix A to the Company's Proxy Statement filed March 17, 2006
*10.9	Second Amendment to the 2005 Stock Option, Restricted Stock & Stock Appreciation Rights Plan	Incorporated by reference to Exhibit B to the Company's Proxy Statement filed March 23, 2009

88

10.10	Excepted Holder Agreement - W. Andrew Adams	Incorporated by reference to Exhibit 10.6 to Form 10-K dated February 24, 2009
10.11	Excepted Holder Agreement between the Company and Andrea Adams Brown with Schedule A identifying substantially identical agreements and setting forth the material details in which such agreements differ from this agreement.	Incorporated by reference to Exhibit 10.2 to Form 10-Q dated November 3, 2010
*10.12	Employment Agreement with J. Justin Hutchens	Incorporated by reference to Exhibit 10.2 to Form 10-Q dated May 5, 2009
*10.13	Amendment No. 1 dated March 10, 2010 to the Employment Agreement dated February 25, 2009 by and between NHI and J. Justin Hutchens	Incorporated by reference to Exhibit 10.2 to Form 10-Q dated May 7, 2010
10.14	Agreement with Care Foundation of America, Inc.	Incorporated by reference to Exhibit 10.11 to Form 10-K dated February 22, 2010
10.15	$100,000,000 credit facility dated February 1, 2010 by and between NHI and certain subsidiaries and Regions bank, as agent	Incorporated by reference to Exhibit 10.3 to Form 10-Q dated May 7, 2010
10.16	$50 million term loan and a $50 million revolving credit facility with Regions Bank dated November 3, 2010	Incorporated by reference to Exhibit 10.17 to Form 10-K dated February 16, 2010
*10.17	Second Amendment dated December 29, 2010 to the Employment Agreement dated February 25, 2009 by and between NHI and J. Justin Hutchens.	Incorporated by reference to Exhibit 10.20 to Form 10-K filed February 14, 2014
*10.18	Third Amendment dated May 3, 2011 to the Employment Agreement dated February 25, 2009 by and between NHI and J. Justin Hutchens	Incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarterly period ended June 30, 2011
10.19	Contract to Acquire Properties dated October 31, 2011 by and between National Health Investors, Inc. and Firehole River Real Estate Holdings - Greenville, Ltd., Firehole River Real Estate Holdings - West Houston, Ltd., Legend Oaks - Ennis, LLC, Legend Greenville Healthcare, LLC, Legend Oaks - West Houston, LLC and Legend Oaks - North Houston, LLC	Incorporated by reference to Exhibit 10.1 to Form 10-Q dated November 7, 2011
10.20	Credit Agreement, dated as of November 1, 2011, by and among the Company, Wells Fargo Bank, National Association, as Administrative Agent, and the other lenders named therein.	Incorporated by reference to Exhibit 10.2 to Form 10-Q dated November 7, 2011
10.21	Amended and Restated Credit Agreement dated as of May 1, 2012 among the Corporation, as borrower, the lenders from time to time party thereto and Wells Fargo Bank, National Association, as administrative agent, swing line lender and issuing bank.	Incorporated by reference to Exhibit 10.1 to Form 10-Q dated August 3, 2012
10.22	Extension of Master Agreement to Lease dated December 28, 2012.	Incorporated by reference to Exhibit 10.22 to Form 10-K dated February 15, 2013
10.23	Membership Interest Purchase Agreement dated as of June 24, 3013 among Care Investment Trust Inc., Care YBE Subsidiary LLC and NHI-Bickford RE, LLC.	Incorporated by reference to Exhibit 10.1 to Form 10-Q dated August 5, 2013
10.24	Second Amended and Restated Credit Agreement entered into as of June 28, 2013, by and among National Health Investors, Inc., Each Lender from Time to Time Party Hereto, and Wells Fargo Bank, National Association, as Administrative Agent, the Swing Line Lender and the Issuing Bank.	Incorporated by reference to Exhibit 10.2 to Form 10-Q dated August 5, 2013

89

10.25	First Amendment dated as of December 23, 2013 to the Second Amended and Restated Credit Agreement dated as of June 28, 2013 by and among National Health Investors, Inc. and Wells Fargo Bank, National Association, as Administrative Agent for the Lenders party to the Credit Agreement.	Incorporated by reference to Exhibit 10.1 to Form 8-K dated December 23, 2013
10.26	Master Lease dated as of December 23, 2013 between NHI-REIT of Next House, LLC, Myrtle Beach Retirement Residence LLC and Voorhees Retirement Residence LLC, individually and collectively as Landlord, and NH Master Tenant LLC, as Tenant.	Incorporated by reference to Exhibit 10.2 to Form 8-K dated December 23, 2013
10.27	Guarantee of Lease Agreement dated as of December 23, 2013 between NHI-REIT of Next House, LLC, Myrtle Beach Retirement Residence LLC and Voorhees Retirement Residence LLC, individually and collectively as Landlord, and Holiday AL Holdings, LP as Guarantor.	Incorporated by reference to Exhibit 10.3 to Form 8-K dated December 23, 2013
10.28	Purchase Agreement dated as of November 18, 2013 between the Registrant and certain subsidiaries of Holiday Acquisition Holdings LLC.	Incorporated by reference to Exhibit 10.31 to Form 10-K filed February 14, 2014
10.29	Amendment No. 7 to Master Agreement to Lease with NHC	Incorporated by reference to Exhibit 10.32 to Form 10-K filed February 14, 2014
*10.30	Amended and Restated Employment Agreement effective as of February 14, 2014 by and between National Health Investors, Inc. andJustin Hutchens	Incorporated by reference to Exhibit 10.2 to Form 10-Q dated May 5, 2014
10.31	Asset Purchase Agreement dated December 1, 2014 with Senior Living Communities, LLC and certain of its affiliates, relating to the acquisition of a portfolio of eight retirement communities	Filed herewith
10.32	$225 million Note Purchase Agreement dated January 13, 2015 with Prudential Capital Group and certain of its affiliates	Filed herewith
12.1	Statement Regarding Computation of Ratio of Earnings to Fixed Charges and Ratio of Fixed Charges and Preferred Stock Dividends	Filed herewith
21	Subsidiaries	Filed herewith
23.1	Consent of Independent Registered Public Accounting Firm	Filed herewith
31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed Herewith
31.2	Certification of Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed Herewith
32	Certification of Chief Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed Herewith
99.1	Financial Statement Schedules	Filed herewith
**101.INS	XBRL Instance Document
**101.SCH	XBRL Taxonomy Extension Schema Document
**101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
**101.LAB	XBRL Taxonomy Extension Label Linkbase Document

90

**101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
**101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

* Indicates management contract or compensatory plan or arrangement.

** As provided in Rule 406T of Regulation S-T, this information shall not be deemed “filed” for purposes of Sections 11 and 12 of the Securities Act and Section 18 of the Securities Exchange Act or otherwise subject to liability under those sections.

91

EX-10.31

EXHIBIT 10.31

ASSET PURCHASE AGREEMENT

by and between

SENIOR LIVING COMMUNITIES, LLC, HOMESTEAD HILL RETIREMENT LIMITED PARTNERSHIP,

RIDGECREST RETIREMENT, LLC, LITCHFIELD RETIREMENT, LLC, SUMMIT HILLS, LLC,

OSPREY VILLAGE AT AMELIA ISLAND, LTD., BRIGHTWATER RETIREMENT, LLC, CASCADES RETIREMENT, LLC,

MARSH’S EDGE, LLC,

and

CASCADES NURSING, LLC

Collectively, “Seller” and

NHI-REIT OF SEASIDE, LLC

“Purchaser”

Dated as of: December 1, 2014

FACILITIES

BRIGHTWATER

101 BRIGHTWATER DRIVE MYRTLE BEACH, SC 29579

LAKES AT LITCHFIELD

120 LAKES AT LITCHFIELD DRIVE PAWLEYS ISLAND, SC 29585

CASCADES VERDAE

10 FOUNTAINVIEW TERRACE

GREENVILLE, SC 29607

SUMMIT HILLS

110 SUMMIT HILLS DRIVE SPARTANBURG, SC 29307

HOMESTEAD HILLS

3250 HOMESTEAD CLUB DRIVE WINSTON-SALEM, NC 27103

RIDGECREST

1000 RIDGECREST LANE MT. AIRY, NC 27030

MARSH’S EDGE

136 MARSH’S EDGE LANE ST. SIMONS ISLAND, GA 31522

OSPREY VILLAGE

76 OSPREY VILLAGE DRIVE AMELIA ISLAND, FL 32034

ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT (this “Agreement”), is made as of December 1, 2014 (the “Execution Date”), by and among (i) SENIOR LIVING COMMUNITIES, LLC, a limited liability company organized under the laws of the State of North Carolina (“SLC”); (ii) HOMESTEAD HILL RETIREMENT LIMITED PARTNERSHIP, a limited partnership organized under the laws of the State of North Carolina, RIDGECREST RETIREMENT, LLC, a limited liability company organized under the laws of the State of North Carolina, LITCHFIELD RETIREMENT, LLC, a limited liability company organized under the laws of the State of South Carolina, SUMMIT HILLS, LLC, a limited liability company organized under the laws of the State of South Carolina, OSPREY VILLAGE AT AMELIA ISLAND, LTD., a limited partnership organized under the laws of the State of Florida, BRIGHTWATER RETIREMENT, LLC, a limited liability company organized under the laws of the State of South Carolina, CASCADES RETIREMENT, LLC, a limited liability company organized under the laws of the State of South Carolina, MARSH’S EDGE, LLC, a limited liability company organized under the laws of the State of Georgia, and CASCADES NURSING, LLC, a limited liability company organized under the laws of the State of South Carolina (collectively, the “Sublessees” and together with SLC, “Seller”); and (iii) NHI-REIT OF SEASIDE, LLC, a limited liability company organized under the laws of the State of Delaware (“Purchaser”).

RECITALS

A.Seller operates the retirement communities listed on Exhibit A hereto (the “Facilities”).

B.SLC leases the Facilities pursuant to that certain Second Amended and Restated Master Lease Agreement, effective as of December 31, 2012, between Health Care REIT, Inc., a Delaware corporation (the “HCR”), HCRI Indiana Properties, LLC, an Indiana limited liability company, HCRI North Carolina Properties III, Limited Partnership, a North Carolina limited partnership (“HCN-NC” and together with HCR, “Existing Landlord”), and SLC, as amended by a First Amendment to Second Amended and Restated Master Lease Agreement, effective as of June 28, 2013, between Existing Landlord, HCRI Indiana Properties, LLC, and SLC, a Second Amendment to Second Amended and Restated Master Lease Agreement, effective as of July 15, 2014, between Existing Landlord and SLC, and a Third Amendment to Second Amended and Restated Master Lease Agreement, effective as of October 17, 2014, between Existing Landlord and SLC (as amended, the “Existing Lease”).

C.SLC subleases the Facilities to the Sublessees pursuant to that certain Third Amended and Restated Master Sublease Agreement, effective as of December 31, 2012, between SLC, the Sublessees and Existing Landlord, as amended by a First Amendment to Third Amended and Restated Master Sublease Agreement, effective as of June 28, 2013, between SLC, the Sublessees and Existing Landlord, and a Second Amendment to Third Amended and Restated Master Sublease Agreement, effective as of October 17, 2014 (as amended, the “Sublease”).

D.The Sublessees and SLC are the licensed operators of the Facilities, and each Sublessee has entered into a Management and Marketing Services Agreement (collectively, the

“Management Agreements”) with Maxwell Group, Inc., a corporation organized under the laws of the State of North Carolina (the “Manager”), for the management of the Facilities.

E.Seller and Existing Landlord desire to sell to Purchaser, and Purchaser desires to purchase from Seller and Existing Landlord, certain assets of Seller and Existing Landlord, for the consideration and on the terms set forth herein (the “Purchase Transaction”).

F.To effect the Purchase Transaction, (i) SLC will transfer to Purchaser SLC’s rights under the Existing Lease to purchase the Purchased Assets owned by Existing Landlord (the “Existing Purchase Option”), (ii) simultaneously with the transfer of the Existing Purchase Option to Purchaser, Purchaser will exercise the Existing Purchase Option, (iii) Existing Landlord will transfer the Purchased Assets owned by Existing Landlord to Purchaser, and (vii) Seller will transfer the Purchased Assets owned by Seller to Purchaser.

G.Concurrently with the consummation of the Purchase Transaction, (i) SLC will terminate the Existing Lease, (ii) SLC will lease the Purchased Assets back from Purchaser pursuant to the Lease Documents, (iii) SLC will sublease the Purchased Assets to the Sublessees and (iv) the Sublessees will continue to engage the Manager to manage the Facilities.

H.Capitalized terms used in the foregoing recitals and not otherwise defined therein shall have the meaning ascribed to them in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and provisions herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby covenant and agree as follows:

1.Purchase and Sale of Assets.    On the terms and subject to the conditions of this Agreement, on the Closing Date, Seller and Existing Landlord shall sell to Purchaser, and Purchaser shall purchase, free and clear of all liens, other than Permitted Liens, all of the Purchased Assets as follows:

1.1SLC shall sell and Purchaser shall purchase the Existing Purchase Option, and simultaneously with such purchase, Purchaser shall exercise the Existing Purchase Option;

1.2Existing Landlord shall sell and Purchaser shall purchase the Purchased Assets owned by Existing Landlord; and

1.3Seller shall sell and Purchaser shall purchase the Purchased Assets owned by Seller.

2.Purchased Assets. For purposes of this Agreement, the term “Purchased Assets” means the following assets (specifically excluding the Excluded Assets):

2.1all those certain plots, pieces or parcels of land located in Myrtle Beach, SC; Pawleys Island, SC; Greenville, SC; Spartanburg, SC; Winston-Salem, NC; Mt. Airy, NC; St. Simons Island, GA; and Amelia Island, FL, as more particularly described in Schedule 2.1hereto (the “Land”);

2.2all buildings and all other structures, facilities or improvements presently or hereafter located in or on the Land, including, without limitation, the Facilities (the “Improvements” and together with the Land, the “Real Property”); and

2.3all equipment, machinery, furniture and furnishings, fixtures, tools, dies, computer hardware, data processing and telecommunications equipment, office equipment and other tangible personal property of every type and kind, all contract rights (including any express or implied warranties) with respect thereto, and all maintenance records and other documents relating thereto and all remedies and other rights related thereto, owned by Existing Landlord or Seller and used in the operation of the Facilities, other than vehicles and leased equipment.

3.Excluded Assets. Seller or Existing Landlord, as applicable, shall retain the following assets (the “Excluded Assets”), which shall not be included in the definition of the “Purchased Assets” under this Agreement:

3.1Seller’s rights arising under this Agreement or under any other agreement between Purchaser and Seller,

3.2Seller’s or Existing Landlord’s cash and accounts receivable, including any tax, and insurance refunds as the same relate to any period prior to the Closing Date, regardless of when the same are paid to Seller or Existing Landlord,

3.3all claims and rights of Seller to deposits (including tax deposits), escrow funds, refunds and claims for refunds (including federal, state, local and foreign tax refunds), rights of offset and tax credits

3.4any insurance policies in Seller’s name that are in effect at Closing and that insure all or any part of the Purchased Assets,

3.5any and all proprietary and confidential materials and information located at and used in connection with the ownership or operation of the Facilities, including but not limited to, policy and procedure manuals,

3.6 all vehicles and leased equipment located at the Facilities,

3.7Seller’s or Existing Landlord’s current website(s) and telephone listings for the Facilities and the right to use the website(s) and telephone numbers currently being used at the offices of the Facilities,

3.8the names of the Facilities, Seller’s names, Existing Landlord’s names, and the names of any entities owned or controlled by or under common control with Seller or Existing Landlord, as well as any trademarks, logo-types or other similar descriptive items and goodwill associated with such names, all related tangibles and intangibles which Seller uses in the conduct of the business of the Facilities, including any copyrights, and all rights to continue using the Purchased Assets related to the Facilities as an on-going business,

3.9all books, files and records related to the operation of the Facilities that belong to Seller, including, but not limited to, Seller’s proprietary or organizational documents and its financial, accounting, patient, employee and/or tax records,

3.10all consumable inventories of every kind and nature whatsoever (specifically including, but not limited to, all pharmacy supplies, nursing supplies, medical supplies, housekeeping supplies, laundry supplies, maintenance supplies, office supplies, dietary supplies, other supplies and food) which are located at the Facilities,

3.11all licenses and permits issued by any federal, state, municipal or local governmental authority relating to the use, maintenance or operation of the Facilities running to, or in favor of, Seller (including all modifications thereto or renewals thereof), and

3.12all contracts and agreements to which Seller is or may become a party in connection with the leasing and operation of the Facilities including, but not limited to, agreements with the residents of the Facilities.

4. Closing.

4.1Time and Place of Closing. Subject to the satisfaction of the closing conditions set forth in Section 6 below, the parties will use reasonable efforts to cause the closing of the transactions contemplated hereby (the “Closing”) to take place on December 19, 2014; provided, however, that if Purchaser determines that additional time is required in order to consummate the transactions described herein then the Closing shall occur on a date selected by Purchaser that is no later than December 31, 2014 (the “Outside Date”). The date on which the Closing occurs is referred to as the “Closing Date”.

4.2Closing Escrow. Prior to the Closing Date, Purchaser and Seller shall provide to First American Title Insurance Company (the “Title Company”) escrow instructions to open an escrow (“Escrow”) for the consummation of the sale of the Purchased Assets to Purchaser pursuant to the terms of this Agreement in accordance with the general provisions of the escrow instructions provided to the Title Company by each of Purchaser and Seller at or prior to Closing. Provided that all conditions to Closing set forth in this Agreement have been satisfied or, as to any condition not satisfied, waived by the party intended to be benefited thereby, on the Closing Date, Title Company shall conduct the Closing by recording or distributing the following documents and funds in the following manner:

4.2.1Record the Deeds (as hereinafter defined) in the official records of the respective county in which each part of the Land is located;

4.2.2Deliver to Purchaser all documents that are required to be delivered by Seller to Purchaser pursuant to Section 6.1 hereof (to the extent the same shall be delivered to Title Company at or prior to the Closing); and

4.2.3Deliver to Seller all documents that are required to be delivered by Purchaser to Seller pursuant to Section 6.2 hereof (to the extent the same shall be delivered to Title Company at or prior to the Closing), plus the Purchase Price and such other funds, if any, as

may be due to Seller by reason of credits under this Agreement, less all items chargeable to Seller under this Agreement.

4.3Purchase Price. The purchase price payable at Closing by Purchaser shall be in the amount of Four Hundred Seventy-Six Million Dollars ($476,000,000) (the “Purchase Price”). The Purchase Price shall be paid by wire transfer of immediately available funds to the Title Company and such funds shall then be disbursed in accordance with a closing statement with funds flow information executed by a duly authorized officer of each of Existing Landlord, Seller and Purchaser (the “Closing Statement”).

4.4No Assumed Liabilities.    Purchaser shall not assume, in connection with the transaction contemplated hereby, any liability or obligation of Seller or Existing Landlord, and Seller shall retain responsibility for, all liabilities and obligations that (i) relate to the period prior to Closing and/or (ii) arise from Seller’s leasing and operation of the Facilities prior to Closing, whether or not accrued and whether or not disclosed.

4.5Allocation of Purchase Price. An amount equal to the Purchase Price shall be allocated among the Existing Purchase Option and the Purchased Assets as provided in Schedule4.5, and such schedule shall be provided at Closing and Purchaser will use its best efforts such that Schedule 4.5will be final at Closing. The allocation set forth in such schedule is intended to comply with the requirements of Section 1060 of the Internal Revenue Code. Seller and Purchaser agree to file all income tax returns or reports, including, without limitation, IRS Form 8594, for their respective taxable years in which the Closing occurs, to reflect the allocation provided in Schedule 4.5and agree not to take any position inconsistent therewith before any governmental authority charged with the collection of tax or in any other proceeding.

5. Due Diligence; Title and Survey; Licensure.

5.1Due Diligence Materials. Seller has provided Purchaser with the materials in an online data room maintained by IntraLinks, which materials include, among other things, existing title policies, surveys and environmental site assessments related to the Real Property (collectively, to the extent added to the online data room on or before November 26, 2014, the “Due Diligence Materials”).

5.2 Title Matters.

5.2.1Except as set forth in a title and survey objection letter delivered to Seller’s counsel prior to the Execution Date, Purchaser hereby accepts and shall not have the right to disapprove of any mortgages, claims, liens, security interests, pledges, escrows, charges, options or other restrictions or encumbrances on the Real Property that are reflected in the title commitments and surveys contained in the Due Diligence Materials (the “Existing Liens”).

5.2.2As soon as practicable after the Execution Date, Purchaser shall obtain (i) title reports or commitments (collectively, the “Title Commitment”) for an extended coverage title insurance policy with respect to the Real Property issued by the Title Company, along with legible copies of all of the exception documents referenced therein; (ii) ALTA surveys with respect to the

Real Property (collectively, the “Survey”); (iii) zoning reports regarding the Facilities (collectively the “Zoning Reports”); (iv) new Phase I Environmental Reports on each

Facility (the “Phase I Reports”), (v) Property Inspection Reports of each Facility (“Property Inspection Reports”); and UCC Financing Searches on each Seller and Existing Landlord (the “UCC Searches”). All such commitments, reports and searches referred to in this Section 5.2.2, are hereinafter collectively referred to as the “Third Party Reports.” The parties agree to use commercially reasonable efforts to resolve, no later than the Outside Date, Purchaser’s objections, if any, to the matters reflected in the Third Party Reports.

5.2.3At Closing, Purchaser shall cause the Title Company to issue an extended coverage title insurance policy to Purchaser insuring Purchaser’s title to the Real Property as of the Closing Date subject to no exceptions other than the Permitted Liens (defined below) in an amount equal to the Purchase Price (unless a higher amount of title insurance has been specified by Purchaser and the additional premium attributable to such higher amount has been deposited by Purchaser with the Title Company at or prior to Closing and including all endorsements requested by Purchaser (the “Title Policy”).

5.2.4For purposes of this Agreement, “Permitted Liens” means (i) the Existing Liens; (ii) any matter other than the Existing Liens reflected on the Title Commitment or on the Surveys and not objected to by Purchaser or as to which Purchaser waives its objections; (iii) all liens for taxes, assessments, water rates, water meter charges, water frontage charges and sewer taxes, rents and charges, if any, provided that such items are not due and payable; and (iv) any mortgages or deeds of trust granted to or for the benefit of a resident of a Facility to secure refund obligations due to such resident under an occupancy agreement (the “Resident Mortgages”).

5.3Indemnity. Purchaser shall indemnify, defend and hold harmless Seller from and against any and all damages, costs, losses and expenses including, but not limited to, reasonable attorneys’ fees, which Seller may incur as a result of physical damage or injury to any person or property as a result of the acts or omissions of Purchaser or its agents or employees while performing its due diligence investigation of Seller and the Purchased Assets. The indemnity provided for in this Section 5.3 shall survive the termination of this Agreement.

6. Conditions to Closing.

6.1Purchaser’s Conditions. Purchaser’s obligation to consummate the transactions contemplated in this Agreement and pay the Purchase Price and accept title to the Purchased Assets shall be subject to the satisfaction of the following conditions precedent on and as of the Closing Date to the reasonable satisfaction of Purchaser or the waiver thereof by Purchaser, which waiver shall be binding upon Purchaser only to the extent made in writing.

6.1.1There shall not be in force any order, decree, judgment or injunction of any governmental authority enjoining or prohibiting the consummation of the transactions contemplated by this Agreement; and

6.1.2No legal proceeding shall be pending wherein an unfavorable judgment, order, decree, stipulation or injunction would (i) prevent consummation of the transactions contemplated by this Agreement, or (ii) cause the transactions contemplated by this Agreement to be rescinded following consummation.

6.1.3No material adverse effect shall have occurred as to any of the Facilities, any Seller, the Manager, or Donald O. Thompson, Jr.

6.1.4The representations and warranties of Seller contained in this Agreement shall be true and complete in all material respects as of the Closing Date and Seller shall be in compliance in all material respects with the terms and provisions of this Agreement, in each case subject only to exceptions permitted by this Agreement.

6.1.5Purchaser shall receive the Title Policy from the Title Company in form satisfactory to Purchaser.

6.1.6Seller shall deliver, and/or shall cause Existing Landlord to deliver, to Purchaser or, if applicable, to Title Company to be held in escrow in accordance with the terms of this Agreement, on or before the Closing Date the following:

(a)a special warranty deed in proper statutory form for recording, duly executed and acknowledged by Existing Landlord, sufficient to convey to Purchaser (or its designee) fee simple title to the applicable portion of the Real Property free of all liens and encumbrances other than the Permitted Liens, in substantially the applicable form annexed hereto as Exhibit B-1through B-4(collectively, the “Deeds”); provided however that if legal descriptions in any of the Surveys differ from those set forth on Schedule 2.1, then Seller will use its best efforts to also cause Existing Landlord to deliver quitclaim deed(s) containing the legal description from the applicable Survey(s);

(b)a quit claim bill of sale from Existing Landlord in substantially the form annexed hereto as Exhibit C, and a bill of sale from each Seller in substantially the form annexed hereto as Exhibit C-1, each    sufficient to convey to Purchaser (or its designee) the applicable portion of the Purchased Assets;

(c)such title affidavits as may be reasonably required, in connection with the issuance of the Title Policy;

(d)a Foreign Investment in Real Property Tax Act affidavit duly executed by Seller or Existing Landlord, as applicable, in substantially the form annexed hereto as Exhibit D;

(e)a Form 1099 identifying Existing Landlord’s gross proceeds and Existing Landlord’s tax identification number, if required by the Title Company;

(f)a certificate, in form and substance reasonably acceptable to Purchaser, of a duly authorized member or manager of Seller to the effect that the representations and warranties of Seller set forth in this Agreement are true and complete in all material respects on and as of the Closing Date, Seller has complied with all covenants of Seller set forth herein, and confirming the incumbency of the person(s) executing this Agreement and the documents contemplated by this Agreement on behalf of Seller;

(g)termination agreement with respect to the Existing Lease and with respect to any guarantees executed and/or security interests granted by or on behalf of SLC or Sublessees as security for the obligations of SLC or Sublessees under the Existing Lease;

(h)an original payoff statement duly executed by Existing Landlord with respect to the amount of any loans or obligations then-owing by Seller to Existing Landlord, and all documents required to release any and all liens on the Purchased Assets which are security for such obligations along with authorization to the Title Company to duly record/file the same;

(i)an amendment to each of the Sublease and the Management Agreement to reflect the termination of the Existing Lease and the execution of the New Lease (as defined below);

(j)a Lease Agreement between Purchaser and SLC (the “New Lease”) and all collateral/security documents contemplated by the terms of the New Lease (collectively, the “Lease Documents”);

(k)a Loan Agreement between National Health Investors, Inc., as Lender and SLC, as Borrower and all collateral/security documents contemplated thereby (collectively, the “Loan Documents”);

(l)a counterpart copy of the Closing Statement signed by Existing Landlord and Seller;

(m)an assignment of the Existing Purchase Option from SLC to Purchaser, together with any necessary ancillary documents or consents related thereto;

(n)all encumbrances with respect to the personal property, other than Permitted Liens shall have been released;

(o)Seller shall have received all licenses, permits and approvals to operate the Facilities, or filed applicable notices or received applicable consents with respect to the transaction as the case may be, to operate the Facilities after Closing (other than ABC licenses which shall not be a condition to Closing); and

(p)such other closing documents as Purchaser or the Title Company may reasonably require.

6.2Seller’s Conditions.    Seller’s obligation to consummate the transactions contemplated in this Agreement and deliver or cause to be delivered title to the Purchased Assets shall be subject to the following conditions precedent on and as of the Closing Date to the reasonable satisfaction of Seller or the waiver thereof by Seller, which waiver shall be binding upon Seller only to the extent made in writing and dated as of the Closing Date:

6.2.1There shall not be in force any order, decree, judgment or injunction of any governmental authority enjoining or prohibiting the consummation of the transactions contemplated by this Agreement; and

6.2.2No legal proceeding shall be pending wherein an unfavorable judgment, order, decree, stipulation or injunction would (i) prevent consummation of the transactions contemplated by this Agreement, or (ii) cause the transactions contemplated by this Agreement to be rescinded following consummation.

6.2.3 No material adverse effect shall have occurred as to Purchaser.

6.2.4Purchaser shall deliver the Purchase Price due pursuant to Section 4.4 hereof.

6.2.5The representations and warranties of Purchaser contained in this Agreement shall be true and complete in all material respects as of the Closing Date and Purchaser shall be in compliance in all material respects with the terms and provisions of this Agreement, in each case subject only to exceptions permitted by this Agreement.

6.2.6Purchaser shall deliver to Seller or, if applicable, to Title Company to be held in escrow in accordance with the terms of this Agreement, on or before the Closing Date the following:

(a)a certificate of a duly authorized member or manager/officer of Purchaser to the effect that the warranties and representations of Purchaser set forth in this Agreement are true and complete in all material respects on and as of the Closing Date, Purchaser has complied in all material respects with all covenants of Purchaser set forth herein, and confirming the incumbency of the person(s) executing this Agreement and the documents contemplated by this Agreement on behalf of Purchaser; and

(b) a counterpart copy of the Closing Statement signed by Purchaser;

(c) the Lease Documents to which Purchaser is a party;

(d)the Loan Documents to which Purchaser or any of its affiliates is a party;

(e)such other closing documents as Seller or the Title Company may reasonably require.

6.3Conditions Generally. The foregoing conditions are for the benefit only of the party for whom they are specified to be conditions precedent and such party may, in its sole discretion, waive any or all of such conditions and proceed with the Closing under this Agreement without any increase in, abatement of or credit against the Purchase Price; provided, however, that the parties acknowledge and agree that the foregoing conditions may not be waived as to one Facility without being waived as to all Facilities, it being understood and agreed that Seller shall be required to sell, and Purchaser shall be required to purchase, all or none of the Facilities at Closing and that Seller

shall not have the right to sell, and Purchaser shall not have the right to purchase, only one of the Facilities at Closing.

7.Prorations. There shall be no proration of real or personal property taxes or other costs and expenses related to the ownership and/or the operation of the Facilities at Closing it being understood and agreed that Seller shall be responsible therefor both prior to and after Closing.

8.Seller’s Representations, Warranties and Covenants. SLC and each Sublessee jointly and severally represent, warrant and covenant to Purchaser as follows:

8.1Organization. Each of SLC and the Sublessees is duly organized, validly existing and in good standing in their respective states of organization and each is qualified to do business in all states where it is doing business.

8.2Authority. Seller has full power and right to enter into and perform its obligations under this Agreement and any other documents to which it is or will be a party with respect to the transactions contemplated hereby, and this Agreement and such other documents are the valid, binding and enforceable obligations of Seller, except as such enforceability may be limited by creditors’ rights laws and general principles of equity.

8.3No Conflict. Except as set forth on Schedule 8.3, the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby (1) have been duly authorized by all necessary action on the part of Seller, (2) do not require Seller to secure any governmental or other third-party consent and (3) will not result in the breach of any agreement, indenture or other instrument to which Seller is a party or is otherwise bound.

8.4Occupancy Rights. Except as set forth on Schedule 8.4, there are no occupancy rights (written or oral), leases or tenancies granted by Seller or, to Seller’s knowledge, Existing Landlord, with respect to the Purchased Assets, other than the rights of Seller under the Existing Lease and Sublease, the Manager under the Management Agreement and to the residents of the Facilities under occupancy agreements, nor will Seller enter into or consent to Existing Landlord entering into any such leases or grant or consent to Existing Landlord granting any such tenancies between the Execution Date and the Closing Date.

8.5No Condemnation Proceeding.    Seller has not received, and to Seller’s knowledge, Existing Landlord has not received, written notices of any (i) condemnation proceeding relating to the Purchased Assets, (ii) reclassification of any or all of the Purchased Assets for local zoning purposes, or (iii) reassessment or reclassification of any or all of the Purchased Assets for state or local real property taxation purposes. To Seller’s knowledge, no such actions have been threatened.

8.6Lawsuits and Proceedings. Neither Seller nor, to Seller’s knowledge, Existing Landlord is engaged in any legal action or other proceedings before any court or administrative agency which would or would reasonably be expected to prohibit the transactions contemplated hereby or materially adversely affect the Purchased Assets. Neither Seller, nor to Seller’s knowledge, Existing Landlord, is a party to any action or proceeding, nor has Seller, or to Seller’s knowledge, Existing Landlord, been threatened with any such action or proceeding, nor to Seller’s knowledge, does there exist any basis for any action or proceeding whether against Seller or Existing Landlord, which will or would reasonably be expected to have a material adverse effect on the condition, financial or otherwise, of the Purchased Assets or the Facilities.

Neither Seller nor, to Seller’s knowledge, Existing Landlord has, with respect to the Facilities, received notice of the commencement of any investigation proceedings or any governmental investigation or action (including any civil investigative demand or subpoena) under the False Claims Act (31 U.S.C. Section 3729 et seq.), the Anti-Kickback Act of 1986 (41 U.S.C. Section 51 et seq.), the Federal Health Care Programs Anti-Kickback statute (42 U.S.C. Section 1320a- 7a(b)), the Ethics in Patient Referrals Act of 1989, as amended (Stark Law) (42 U.S.C. 1395nn), the Civil Money Penalties Law (42 U.S.C. Section 1320a-7a), or the Truth in Negotiations (10

U.S.C. Section 2304 et seq.), Health Care Fraud (18 U.S.C. 1347), Wire Fraud (18 U.S.C. 1343),

Theft or Embezzlement (18 U.S.C. 669), False Statements (18 U.S.C. 1001), False Statements (18 U.S.C. 1035), or Patient Inducement Statute or any equivalent state statutes or any rule or regulation promulgated by a governmental authority with respect to any of the foregoing healthcare fraud laws (collectively, the “Healthcare Laws”). No order, writ, injunction or decree has been issued by or, to Seller’s knowledge, requested of, any court or governmental agency which results in, or would reasonably be expected to result in, any material adverse change in the Purchased Assets. Seller represents and warrants that there are no workers compensation claims pending with respect to the Facilities which, in the opinion of Seller would not, nor would reasonably be expected to, prohibit the transactions contemplated hereby or materially adversely affect the Purchased Assets or the Facilities.

8.7Condition of Property.    The buildings, plants, structures, furniture, fixtures, machinery, equipment and other items of tangible personal property included in the Purchased Assets are structurally sound, are in good operating condition and repair, and are adequate for the uses to which they are being put, and none of such buildings, plants, structures, furniture, fixtures, machinery, equipment, vehicles and other items of tangible personal property is in need of maintenance or repairs except for ordinary, routine maintenance and repairs that are not material in nature or cost. The Purchased Assets are sufficient for the continued conduct by Seller of its business after the Closing in substantially the same manner as conducted prior to the Closing. No Facility is in a flood plain, windstorm or earthquake zone, except Lakes at Litchfield (Pawleys Island, South Carolina), Marsh’s Edge (St. Simons Island, Georgia) and Osprey Village (Amelia Island, Florida).

8.8Permits, Filings.    Except as set forth on Schedule 8.8, Seller has filed or has caused to be filed all required filings and obtained all consents for the lawful operation of the Facilities and the continued operation of the Facilities after the Closing hereof. Except as set forth on Schedule 8.8, Seller has obtained and maintained all licenses, permits, certificates or other filings which are necessary to own and operate the Facilities in the respective states of operation and which are necessary to continue to own and operate the Facilities after the Closing hereof. Seller has timely filed all reports required to maintain any applicable Facility’s Medicare certification, and has timely filed all required cost reports required to be filed prior to the Execution Date and all such reports were true and correct and complete in all material respects. Seller will take such action as may be necessary to file any cost reports required to be filed between the Execution Date and the Closing Date and all such reports will, as and when filed, be true and correct and complete in all material respects.

8.9Compliance with Law.    Except as set forth on Schedule 8.9, Seller has not received any notice from any governmental body claiming a violation of any applicable foreign, federal, state or municipal laws, regulations or ordinances, including, without limitation,

Healthcare Laws (collectively, the “Applicable Law”) with respect to the Facilities, and the Facilities are being operated by Seller in compliance with all Applicable Law except where the failure to comply with Applicable Law would not reasonably be expected to have a material adverse effect on a Facility or Seller. In connection with its operation of the Facilities, Seller is not relying on any exemption from or deferral of any Applicable Law. The levels of the inventory at the Facilities comply with any requirement of Applicable Law. Seller has not received any notice from any governmental agency requiring the correction of any condition with respect to a Facility which has not either been corrected or been made the subject of a plan of correction which has been accepted by the applicable governmental agency. Seller is not aware of any claims, requirement or demand of any licensing or certifying agency supervising or having authority over the Facilities to rework or redesign them or to provide additional furniture, fixtures, equipment or inventory so as to conform to or comply with any existing law, code or standard which has not been fully satisfied prior to the Execution Date or which will not be satisfied prior to the Closing. To Seller’s knowledge, Existing Landlord holds a valid and currently effective Certificate of Occupancy with respect to the each Facility permitting occupancy of the number of beds/units set forth above.

8.10Employees.    Except as set forth on Schedule 8.10, there is not pending or, to Seller’s knowledge, threatened, any labor dispute, strike or work stoppage against Seller which would reasonably be expected to interfere with the continued operation of the Facilities. Neither Seller nor, to Seller’s knowledge, any representative or employee of Seller has committed any unfair labor practices or unlawful discriminatory act in connection with the operation of the Facilities which remains outstanding as of the Execution Date, and there is not pending or, to Seller’s knowledge, threatened any charge or complaint against Seller by any federal or state agency, including but not limited to the National Labor Relations Board or any California state equivalent thereof. Seller has complied in all material respects with all laws relating to the employment of labor, including provisions thereof relating to wages, hours, equal opportunity, collective bargaining and the payment of social security and other taxes. To Seller’s knowledge, none of its Facility employees have been added to the excluded provider list since the most recent review of the excluded provider lists.

8.11Environmental Matters; Hazardous Substances. The Real Property has not been used by Seller, or to Seller’s knowledge, by any other person or entity for the generating, handling, storage, disposal, or release of any material or substance that is defined, regulated or classified as hazardous or toxic or as a pollutant or contaminant under any Environmental Law (defined below), including any petroleum or fraction thereof, asbestos or asbestos containing material, polychlorinated biphenyls, toxic mold, lead based paint, radon, and any radioactive or infectious material or substance (collectively referred to as “Hazardous Substances”) except such Hazardous Substances as are used, generated, handled, stored, disposed of and/or released at the Facilities in the ordinary course of the operation of the Facilities (or the applicable operations of any prior owner or occupant) where such use, generation, handling, storage, disposal and/or release is in full compliance with applicable Environmental Laws and does not require remediation or abatement under any applicable Environmental Law. For purposes of this Agreement, none of the actions described above will be deemed to be an action that is not in full compliance with applicable Environmental Law if the resulting condition has been remediated or abated in accordance with Environmental Law. “Environmental Law” means any Applicable Law applicable to Seller or the Real Property, any order or permit issued to Seller or with respect

to the Real Property by a governmental authority, and any binding agreement between Seller and a governmental authority regulating or imposing liability or standards of conduct concerning any of the following: (a) discharge of pollution to land, air, or water; (b) generation, storage, transport, and disposal of waste; (c) protection or use of natural resources, including endangered species and wetlands; (d) exposure of employees or third parties to hazardous or toxic materials;

(e)public or worker health and safety; (f) contamination of soil, surface water, or groundwater, including investigation, assessment, testing, monitoring, containment, cleanup, removal, remediation, remedial action, and corrective action; and (g) the production, management, and disposal of products containing any hazardous or toxic material, including the registration, use, labeling, and recycling of such products. Seller has not used nor authorized nor allowed the use of the Real Property, and the Real Property has not been used by Seller, in a matter other than in full compliance with Environmental Laws that does not require remediation or abatement under any applicable Environmental Laws:

(a)Neither Seller nor to Seller’s knowledge, Existing Landlord, has received any notice of any claims, actions, suits or proceedings or investigations relating to Hazardous Substances or Environmental Laws with respect to ownership, condition, or operation of any of the Assets of Seller, including, but not limited to, the Real Property, in any court or before or by any federal, state, or other governmental agency or private arbitration.

(b)No release, discharge, spillage, or disposal, except in compliance with Environmental Law, of any Hazardous Substance by Seller, or, to Seller’s knowledge, any other person, has occurred or is occurring at the Real Property, other than those that have been remediated or abated in accordance with applicable Environmental Law.

(c)To Seller’s knowledge, no soil or water in or around or adjacent to the Real Property was contaminated by any Hazardous Substance that has not been remediated or abated in accordance with applicable Environmental Law.

(d)All waste containing any Hazardous Substance which, during Seller’s leasing and operation of the Facilities, has been generated, used, handled, stored, treated or disposed of (directly or indirectly) by the Facilities, and to Seller’s knowledge, by their contractors, has been disposed of in compliance with all Environmental Laws and in a manner not requiring remediation or abatement under any applicable Environmental Laws.

(e)Seller has and to Seller’s knowledge, Existing Landlord has, complied with all applicable reporting requirements under all Environmental Laws concerning the disposal or release of Hazardous Substances, and neither Seller nor, to Seller’s knowledge, Existing Landlord has, made any such reports concerning any premises, operations or activities of Seller.

(f)Except as disclosed in the Due Diligence Materials, there are no underground tanks or any other underground storage facility presently located on the Real Property and, to Seller’s knowledge, no such tanks or facilities were ever previously located at or around the Real Property.

(g)All properties, structures, machinery, equipment and products used or produced in Seller’s business are free of asbestos and asbestos-containing materials, polychlorinated biphenyls, toxic mold, lead-based paint, and radon.

8.12Changes in Third-Party Payors. Seller has not received written notice that any health plan, insurance company, employer or other third-party payor, which is currently doing business with the Facilities, intends to terminate, limit or restrict its relationship with the Facilities.

8.13Financial Statements. Seller has provided to Purchaser true and correct copies of the audited financial statements of SLC, Manager and each Sublessee for the calendar years ended December 31, 2011, 2012, 2013 and the unaudited financial statements of SLC, Manager and each Sublessee for the 10-month period ending October 31, 2014 (collectively, the “Financial Statements”). The Financial Statements fairly present, in all material respects, the results of operations, cash flows and financial position of Seller, as of the dates referred to in the Financial Statements, all in accordance with GAAP. Except as disclosed in Schedule 8.13or in the Financial Statements, there are no liabilities, debts, claims or obligations related to any Seller, whether accrued, absolute, contingent or otherwise, whether due or to become due, that would reasonably be expected to be asserted against Purchaser or any Seller following the Closing Date.

8.14Solvency.    Immediately after giving effect to the transactions contemplated hereby, each Seller shall be solvent and shall: (a) be able to pay its debts as they become due; (b) owns property that has a fair saleable value greater than the amounts required to pay its debts (including a reasonable estimate of the amount of all contingent liabilities); and (c) has adequate capital to carry on its business. No transfer of property is being made and no obligation is being incurred in connection with the transactions contemplated hereby with the intent to hinder, delay or defraud either present or future creditors of any of Seller.

8.15No Material Defaults. There are currently no events of default outstanding under the Existing Lease nor, to Seller’s knowledge, is there any event outstanding that with the passage of time would reasonably be expected to constitute an event of default under the Existing Lease that would, in either case, prohibit Seller from exercising the Existing Purchase Option or excuse Existing Landlord from its obligation to sell, the Facilities. The Existing Purchase Option constitutes the valid and legally binding obligation of SLC and Existing Landlord and is enforceable against SLC and Existing Landlord in accordance with the terms thereof. No proceedings are pending or, to Seller’s knowledge, threatened that may result in the revocation, cancellation, suspension or modification of the Existing Purchase Option. Neither Seller nor Existing Landlord is in breach of any provision of the Existing Purchase Option. Seller has received all necessary consents of the Existing Landlord to (i) assign or transfer the Existing Purchase Option to Purchaser as described in this Agreement, and (ii) to waive any notice requirement with respect to the Existing Purchase Option.

8.16Taxes. All tax returns required to be filed by Seller for any tax period ending on or before the Closing Date have been, or will be, timely filed. Such tax returns are, or will be, true, complete and correct in all material respects. All taxes due and owing by Seller have been, or will be, timely paid.

8.17Health Care Surveys and Reports. True, correct and complete copies of all health care inspections and survey reports, including any waivers of deficiencies, plans of correction, and any other investigative reports issued since January 1, 2012 with respect to each Facility have been provided by Seller to Purchaser prior to the Execution Date, or will be provided to Purchaser as part of the Due Diligence Review.

8.18Insurance. True, correct and complete copies of all insurance policies providing coverage with respect to any facility have been provided by Seller to Purchaser prior to the Execution Date. Such insurance is adequate and in amounts customary for the industry in which Seller operates. Neither Seller nor to Seller’s knowledge, Existing Landlord, has received any written notice or request from any insurance company or underwriters setting forth any defects in any of the Facilities which such insurance company or underwriters have indicated would reasonably be expected to adversely affect the insurability of any of the Facilities, requesting the performance of any work or alteration of any of the Facilities or setting forth any defect or inadequacy in any of Seller’s operation of its Facility which such insurance company or underwriters have indicated would reasonably be expected to adversely affect the insurability of the affected Facility. All insurance on the Facilities is maintained by Seller and/or Manager and each insurance policy of Seller and/or Manager is in full force and effect (free from any present exercisable right of termination on the part of the insurance company issuing such policy prior to the expiration of the terms of such policy). Neither Seller nor Manager has received any notice of non-renewal or cancellation of any such policies.

8.19 Notice of Certain Events.

8.19.1From the Execution Date until the Closing, Seller shall promptly notify Purchaser in writing of:

(i)any fact, circumstance, event or action the existence, occurrence or taking of which (A) has had, or could reasonably be expected to have, individually or in the aggregate, a material adverse effect, (B) has resulted in, or could reasonably be expected to result in, any representation or warranty made by Seller hereunder not being true and correct or (C) has resulted in, or could reasonably be expected to result in, the failure of any of the conditions set forth in Section 6.1 to be satisfied;

(ii)any notice or other communication from any person alleging that the consent of such person is or may be required in connection with the transactions contemplated by this Agreement;

(iii)any notice or other communication from any governmental authority in connection with the transactions contemplated by this Agreement; and

(iv)any legal action or other proceeding before any court or administrative agency commenced or, to Seller's knowledge, threatened against, relating to or involving or otherwise affecting the Facilities or the Purchased Assets that, if pending on the date of this Agreement, would have been required to

have been disclosed pursuant to this Agreement or that relates to the consummation of the transactions contemplated by this Agreement.

8.19.2Purchaser's receipt of information pursuant to this Section shall not operate as a waiver or otherwise affect any representation, warranty or agreement given or made by Seller in this Agreement and shall not be deemed to amend or supplement any disclosure schedules.

8.20No Monetary Liens. Other than the Resident Mortgages and liens that will be satisfied or released at or before Closing, there are no Monetary Liens encumbering the Purchased Assets, and the Purchased Assets are free and clear of any such Monetary Liens. “Monetary Liens” shall mean liens of the type customarily placed on assets as security in favor of a lender in connection with funded indebtedness.

8.21 8-K Requirements.

8.21.1For a period from the Execution Date until three (3) years after Closing, Seller shall from time to time upon Purchaser’s request, make the Financial Statements, Live Long Well Care, LLC financial statements, any underlying financial data associated therewith, and all other books, records and files relating to any period prior to the Closing (whether in paper or electronic format) available to Purchaser for inspection, copying and audit by Purchaser and Purchaser’s designated accountants, at Purchaser’s expense. Provided that Purchaser agrees to bear any associated third-party expense (i.e. excluding expenses of Seller’s personnel and other overhead expenses), Seller shall provide Purchaser with copies of, or access to, such factual information as may be reasonably requested by Purchaser, and in the possession or under the direct or indirect control of Seller, to enable Purchaser or an affiliate (or their respective successors) to (x) include such information in registration statements, offering memoranda or prospectuses, or similar disclosure documents in connection with syndications, private placements or public offerings of equity or debt securities or interests of Purchaser or any of its affiliates, and (y) comply with all reporting and disclosure requirements of Purchaser or any of its affiliates under applicable federal and state laws and the rules and regulations promulgated thereunder, as such requirements are interpreted in good faith by Purchaser or any such affiliate.

8.21.2Without limiting the foregoing, Seller shall use its best efforts to cause its current auditors as soon as possible, but in any event within 45 days of closing, to (i) revise the audited Financial Statements (and any audited financial statements of Live Long Well Care, LLC) to be in accordance with generally accepted accounting principles as required for public reporting companies filing with the Securities and Exchange Commission; (ii) provide an unqualified audit opinion with respect to such revised audit, (iii) consent to the inclusion of such opinion in one or more reports or registration statements that may be filed by Purchaser or an affiliate with the Securities and Exchange Commission, or in any offering memorandum or similar disclosure documents in connection with any syndications or private placements, (iv) issue one or more customary comfort letters with respect to financial information of Seller, and

(v)perform a review of any interim financial periods in accordance with AU 722 in order to be able to provide customary comfort with respect to such periods. In the event Seller is unable to cause its current auditors to perform the forgoing, Purchaser or its designated independent or other accountants may audit the Financial Statements and any other financial statements of

Seller, Manager or Live Long Well Care, LLC, and Seller shall supply such documentation in their possession or under their direct or indirect control as Purchaser or its accountants may reasonably request in order to complete such audit, and Seller shall execute the form of audit and representation letter reasonably required by such accountants, and take such other actions as shall be reasonably necessary, in order to (i) permit such accountants to provide an unqualified audit opinion in accordance with generally accepted accounting principles with respect to such audit,

(ii) obtain the consent of such accountants to the inclusion of such opinion in one or more reports or registration statements that may be filed by Purchaser or an affiliate with the Securities and Exchange Commission, or in any offering memorandum or similar disclosure documents in connection with any syndications or private placements, (iii) cause such accounting firm to issue one or more customary comfort letters with respect to financial information of Seller, and (iv) cause such accounting firm to perform a review of any interim financial periods in accordance with AU 722 in order to be able to provide customary comfort with respect to such periods. Seller shall otherwise reasonably cooperate with Purchaser and its affiliates, accountants and auditors in connection with any public or private offering of equity or debt securities which, in Purchaser’s (or such affiliate’s) good faith judgment, may require disclosure of information relating to the Real Property or the Facilities for any period prior to the Closing. In this connection, Seller shall cause to be made reasonably available to Purchaser and its affiliates, accountants and auditors such personnel of Seller or of any affiliate of Seller (including, without limitation, management personnel employed in connection with any of the Real Property) to address questions relating to the financial statements, financial data, and/or the ownership, operation and/or financial performance of the Real Property and the Facilities for any period prior to the Closing.

8.21.3In addition, from the Execution Date, in connection with any financing sought to be obtained by Purchaser necessary to consummate the transactions described herein, Seller shall reasonably cooperate (and shall cause associated management personnel reasonably to cooperate) to expedite and assist with the consummation of such financing, provided that Purchaser bears any associated third-party expense. Without limitation, such cooperation shall include, upon Purchaser’s request (with Purchaser bearing any associated third-party expenses): establishing special purpose entities and associated structuring changes, implementing documentation and other changes to facilitate “sale” treatment of Purchaser’s acquisition of the Purchased Assets for accounting and/or “true sale” legal purposes, implementing changes in accounts as the lender may reasonably request, and making appropriate personnel reasonably available to address questions and issues. The obligations of the Parties under this Section 8.21 shall survive the Closing.

9.Purchaser’s Representations and Warranties. Purchaser represents and warrants as follows:

9.1Organization.    Purchaser is a duly organized and validly existing Delaware limited liability company and is in good standing under the laws thereof.

9.2Authority.    Purchaser has full power and right to enter into and perform its obligations under this Agreement and any other documents to which it is or will be a party with respect to the transaction contemplated hereby, and this Agreement and such other documents

are the valid, binding and enforceable obligations of Purchaser except as such enforceability may be limited by creditors’ rights laws and general principles of equity.

9.3No Conflict. Except as set forth in Schedule 9.3, the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby (1) have been duly authorized by all necessary action on the part of Purchaser, (2) do not require any governmental or other consent, and (3) will not result in the breach of any agreement, indenture or other instrument to which Purchaser is a party or is otherwise bound.

9.4Litigation. As of the Execution Date, Purchaser is not a party to, or defending or subject to, any legal proceeding, nor, to Purchaser’s knowledge, is any such legal proceeding threatened in each case, which would have a material adverse effect on Purchaser’s ability to execute, deliver and perform this Agreement, and any other documents and transaction contemplated hereby.

9.5Available Funds. Upon the Closing, Purchaser will have immediately available to it sufficient funds to pay the Purchase Price.

10. Operations Pending Closing/Risk of Loss.

10.1Conduct Pending Closing. Between the Execution Date and the Closing Date, Seller shall fulfill its obligations under the Existing Lease as and when due in accordance with the terms thereof and shall operate the Facilities in accordance with the terms thereof and in the ordinary course of business.

10.2Risk of Loss. The risk of any loss or damage to any of the Purchased Assets by fire or other casualty before the Closing hereunder belongs to Seller and Existing Landlord. Seller shall give Purchaser written notice of any fire or other casualty within three (3) business days of the occurrence of same, which notice shall include a description thereof in reasonable detail and an estimate of the cost of and time to repair. In the event of any material (as hereinafter defined) damage to or destruction of any Facility, Purchaser, by written notice delivered to Seller within ten (10) days after receipt of notice from Seller, shall have the option to terminate this Agreement. If Purchaser so elects to terminate this Agreement as a result of such damage or destruction, it shall be required to do so in whole and not only as to the affected Facility, and, in such event, this Agreement shall thereafter be of no further force and effect and neither party shall have any liability to the other hereunder except for those obligations which by their terms specifically survive termination of this Agreement. If Purchaser does not elect to terminate this Agreement or if the damage or destruction is not material, then the sale of the Purchased Assets shall be consummated as herein provided without abatement to the Purchase Price and any insurance proceeds payable in connection with such damage or destruction and any repair or reconstruction obligations imposed on Seller shall be handled in the manner set forth in the New Lease. For the purposes hereof, “material” damage or destruction shall include any damage or destruction in an amount more than $5,000,000 as to one Facility or multiple Facilities (including in said amount the amount of any revenues lost as a result of said fire or other casualty).

10.3Eminent Domain. The risk of any loss or damage to the Purchased Assets by condemnation before the Closing Date hereunder belongs to Seller and Existing Landlord. In the event any condemnation proceeding is commenced or threatened, Seller shall give Purchaser written notice thereof within three (3) business days after the occurrence of same, together with such reasonable details with respect thereto as to which Seller may have knowledge. As soon as the portion or portions of the Purchased Assets to be taken are reasonably determinable, Seller shall give Purchaser written notice thereof together with Seller’s estimate of the value of the portion or portions of the Purchased Assets to be so taken. In the event of any material taking of the Purchased Assets (as hereinafter defined), Purchaser, by written notice delivered to Seller within ten (10) days after Purchaser’s receipt of notice from Seller of the determination of the portion or portions of the Purchased Assets to be taken, shall have the option to terminate this Agreement. If Purchaser so elects to terminate this Agreement, this Agreement shall thereafter be of no further force and effect and neither party shall have any liability to the other hereunder except for those obligations which by their terms specifically survive termination of this Agreement. For the purposes hereof, a “material” taking shall mean any taking (1) the effect of which would be to require more than $5,000,000 to repair or restore either or both of the Facilities or (2) which would materially impair the use or operation of either or both of the Facilities as determined in the reasonable discretion of Purchaser. If Purchaser shall not so elect to terminate this Agreement or if the taking is not material, then the sale of the Purchased Assets shall be consummated as herein provided without abatement to the Purchase Price, and all awards made in respect of such condemnation and any repair or reconstruction obligations imposed on Seller shall be handled in the manner set forth in the New Lease.

11. Termination/Remedies/Post Closing Indemnities.

11.1 In General. This Agreement may be terminated as follows:

11.1.1By mutual written agreement of Purchaser and Seller;

11.1.2By Purchaser, upon written notice to Seller, if a material adverse effect has occurred to any Facility, any Seller, the Manager or Donald O. Thompson, Jr. since the Execution Date;

11.1.3By Seller, upon written notice to Purchaser, if a material adverse effect has occurred to Purchaser since the Execution Date;

11.1.4By either Seller or Purchaser, upon written notice to the other party (and an opportunity of such party to cure if a cure can reasonably be accomplished before the Outside Date or such later date as agreed by the non-breaching party), in the event of a material default by the other party of its obligations hereunder;

11.1.5By either Seller or Purchaser, upon written notice to the other party, if the Closing has not occurred before the Outside Date, without breach hereof by the terminating party;

11.1.6 By Purchaser pursuant to Section 10.2.

11.1.7 By Purchaser pursuant to Section 10.3.

11.2 Effect of Termination/Remedies on Default.

11.2.1In the event of a material default by one party in its obligations hereunder which gives the other party the right to terminate this Agreement pursuant to Section 11.1.4 the non-defaulting party may choose any one of the following remedies: (i) specific performance by the other party of its obligations under this Agreement, (ii) termination of this Agreement and receipt of a break-up fee in the amount of Seven Million Five Hundred Thousand Dollars ($7,500,000), or (iii) waive such default and proceed with the closing of the transactions provided for herein.

11.2.2If Purchaser terminates this Agreement pursuant to Section 11.1.5, and as of the Outside Date Purchaser had satisfied its closing conditions and was ready and willing to close, except that there existed defects with respect to any of the Third Party Reports (other than, with respect to the Title Commitment or the Survey, any Existing Liens), which Seller refused to correct or cause to be corrected, then Seller shall reimburse up to $300,000 of the actual, reasonable, out-of-pocket costs and expenses incurred by Purchaser in connection with the negotiation of this Agreement through the Outside Date.

11.2.3In the event this Agreement is terminated by a party pursuant to Section 11 not as a result of a default by any other party, then from and after the termination of this Agreement neither party shall have any further rights or obligations hereunder, other than those obligations, if any, which specifically survive termination of this Agreement.

12.Notices. All notices, demands, requests, consents, approvals and other communications (“Notice” or “Notices”) hereunder shall be in writing addressed to the respective parties as follows (or to such other address as a party may hereafter designate) and shall be deemed to have been duly given: (i) when delivered in person (provided a signed receipt is obtained); (ii) when received, if sent by facsimile transmission; (iii) three (3) days after being deposited in the United States mail, certified or registered mail, postage prepaid; or (iv) if sent via Federal Express or similar courier service via overnight delivery, the next business day following receipt:

If to Seller:    c/o Senior Living Communities, LLC

10706 Sikes Place, Suite 200

Charlotte, NC 28277-8019 Attention: Donald O. Thompson, Jr. Phone: 704.246.1620

Fax No.: 704.246.1621

Email: DThompson@Maxwell-Group.com

and a copy to:    Robinson, Bradshaw & Hinson, P.A.

101 North Tryon Street Suite 1900

Charlotte, NC 28246 Attention: Allen K. Robertson Fax No.: 704.373.3968

Email: arobertson@rbh.com

If to Purchaser:    NHI-REIT of Seaside, LLC

222 Robert Rose Drive Murfreesboro, TN 37129 Attention: Kristin S. Gaines Fax No.: 615-225-3030

Email: kgaines@nhireit.com

and a copy to:    Harwell Howard Hyne Gabbert & Manner, P.C.

333 Commerce Street, Suite 1500

Nashville, Tennessee 37201 Attention: John Brittingham Fax No.: 615-251-1059

Email: jmb@h3gm.com

Any notice sent in accordance with the provisions of this Section 12, shall be deemed received upon the actual receipt or refusal of receipt thereof regardless of the method of delivery used. Either party may, by notice given as aforesaid, change the address or addresses, or designate an additional address or additional addresses, for its notices, provided, however, that no notice of a change of address shall be effective until actual receipt of such notice.

13.Closing Costs. As between Seller and Purchaser, Seller shall pay, or shall cause Existing Landlord to pay in accordance with the terms of the Existing Lease, all costs associated with the Closing of the transactions provided for in this Agreement (“Closing Costs”) including, but not limited to: (a) all recording fees related to the conveyance of the Real Property; (b) any city, county and/or state transfer taxes related thereto; (c) all search, abstract and examination fees related to the preparation of the Title Commitment and the issuance of the Title Policy and any requested endorsements and the premiums for the Title Policy and the closing escrow fee; (d) the cost for Purchaser’s due diligence investigation; (e) the cost of any Third Party Reports; (f) any other reasonable transaction and due diligence costs incurred by Purchaser or Seller; (g) any sales or use tax which may be payable with respect to the transfer of the Purchased Assets to Purchaser; and (h) Purchaser’s attorneys’ fees incurred in connection with the negotiation, preparation and consummation of the transactions contemplated.

14.Due Diligence Materials on Termination. Upon any termination of this Agreement prior to Closing, Purchaser shall, (i) upon the request of Seller, destroy or return to Seller all Due Diligence Materials in the possession of Purchaser and (ii) to the extent the cost of such reports has been reimbursed by Seller, or if the termination was the result of Purchaser’s breach, transfer to Seller all Third Party Reports.

15. Miscellaneous.

15.1Entire Agreement. This Agreement constitutes the entire agreement of the parties hereto and supersedes all prior discussions, negotiations or writings, including, but not limited to, that Letter of Intent dated October 30, 2014. This Agreement may not be modified, amended or canceled except pursuant to the terms hereof or an instrument in writing signed by the parties hereto. The Schedules and Exhibits annexed hereto are hereby incorporated herein by reference as fully as though set forth herein. All understandings and agreements heretofore and between

the parties are merged in this Agreement and all exhibits and schedules attached hereto, which alone fully and completely expresses their agreement.

15.2Time is of the Essence.    Time is of the essence with respect to all terms, conditions, provisions and covenants of this Agreement.

15.3Waiver. No waiver of any term, provision or condition of this Agreement shall be deemed to be or be construed as a further or continuing waiver of any such term, provision or condition of this Agreement. No failure to act shall be construed as a waiver of any term, provision, condition or rights granted hereunder.

15.4Attorneys’ Fees in the Event of Litigation. Except as provided otherwise in this Agreement, in the event any dispute between the parties hereto results in litigation, the prevailing party shall be reimbursed for all reasonable costs, including, but not limited to, reasonable attorneys’ fees.

15.5Jurisdiction; Venue.    THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TENNESSEE, WITHOUT REGARD TO THE CONFLICTS OF LAWS RULES OF THE STATE OF TENNESSEE. EACH OF THE PARTIES HERETO HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURTS LOCATED WITHIN SAID STATE. EACH OF THE PARTIES HERETO HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON SUCH PARTIES BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO SUCH PARTY, AT THE ADDRESS SET FORTH FOR NOTICE IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED. THE PARTIES HERETO HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION BROUGHT AGAINST SUCH PARTY IN ACCORDANCE WITH THIS SECTION.

15.6Headings.    The headings of the various Sections of this Agreement have been inserted only for the purposes of convenience, are not part of this Agreement and shall not be deemed in any manner to modify, explain, qualify or restrict any of the provisions of this Agreement.

15.7Counterparts. This Agreement may be executed in any number of counterparts with the same effect as if all parties hereto had executed the same document. All such counterparts shall be construed together and shall constitute one instrument.

15.8Successors and Assigns. This Agreement shall bind and inure to the benefit of the respective heirs, executors, administrators, personal representatives, successors and assigns of the parties hereto; provided, however, that Seller shall not assign this Agreement without the prior written consent of Purchaser, which consent may be withheld in such party’s sole and absolute discretion. Any assignment not permitted hereunder and undertaken without such prior written consent shall be deemed null and void.

15.9Further Assurances. Between the Execution Date and the Closing Date, neither Seller nor Purchaser shall take any action which is inconsistent with its obligations under this Agreement. Further, whether prior to or after Closing, Seller and Purchaser shall provide to the other such further assurances as may reasonably be required hereunder to effectuate the purposes of this Agreement and, without limiting the foregoing, shall execute and deliver such affidavits, certificates and other instruments as may be so required hereunder so long as the same shall not materially increase the liability of the party so executing and delivering said instrument.

15.10Severability. If any term or provision of this Agreement shall to any extent be held invalid or unenforceable, the remaining terms and provisions of this Agreement shall not be affected thereby, but each term and provision shall be valid and be enforced to the fullest extent permitted by law.

15.11Usage. All nouns and pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the person or persons, firm or firms, corporation or corporations, entity or entities or any other thing or things may require, “any” shall mean “any and all”, “or” shall mean “and/or”, and “including” shall mean “including without limitation”.

15.12No Strict Construction. The language used in this Agreement is the language chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against any of the parties hereto.

15.13Confidentiality. In the event the transaction contemplated by this Agreement fails to close for any reason, Purchaser and Seller agree to keep confidential any proprietary information disclosed to them by the other party during the course of this transaction.

15.14Calculation of Time Periods.    Unless otherwise specified, in computing any period of time described herein, the day of the act or event on which the designated period of time begins to run shall not be included and the last day of the period so computed shall be included, unless such last day is a Saturday, Sunday or legal holiday, in which event the period shall run until the next day which is not a Saturday, Sunday or a legal holiday. Further, unless otherwise specified, any reference to a specified number of days shall be deemed to refer to calendar days.

15.15Third Party Beneficiary.    Nothing in this Agreement express or implied is intended to and shall not be construed to confer upon or create in any person (other than the parties hereto) any rights or remedies under or by reason of this Agreement, including without limitation, any right to enforce this Agreement.

15.16Tax Deferred Exchange. Purchaser and Seller acknowledge that either party may wish to structure this transaction as a tax deferred exchange of like kind property within the meaning of Section 1031 of the Internal Revenue Code. Each party agrees to reasonably cooperate with the other party to effect such an exchange; provided, however, that (a) the cooperating party shall not be required to acquire or take title to any exchange property, (b) the cooperating party shall not be required to incur any expense or liability whatsoever in connection with the exchange, including, without limitation, any obligation for the payment of any escrow,

title, brokerage or other costs including attorneys’ fees incurred with respect to the exchange, (c) no substitution of the effectuating party shall release said party from any of its obligations, warranties or representations set forth in this Agreement or from liability for any prior or subsequent default under this Agreement by the effectuating party, its successors, or assigns, which obligations shall continue as the obligations of a principal and not of a surety or guarantor,

(d) the effectuating party shall give the cooperating party at least two (2) business days prior notice of the proposed changes required to effect such exchange and the identity of any party to be substituted in the escrow, (e) the effectuating party shall be responsible for preparing all additional agreements, documents and escrow instructions (collectively, the “Exchange Documents”) required by the exchange, at its sole cost and expense, (f) the effectuating party shall be responsible for making all determinations as to the legal sufficiency, tax considerations and other considerations relating to the proposed exchange, the Exchange Documents and the transactions contemplated thereby, and the cooperating party shall in no event be responsible for, or in any way be deemed to warrant or represent any tax or other consequences of the exchange transaction, and (g) the election to effect such an exchange shall not delay the Closing of the transaction as defined herein.

15.17Exclusivity. Unless this Agreement shall be terminated by Seller or Purchaser as provided herein, neither Seller nor any member, manager, officer, director, employee, authorized representative or agent of Seller shall, directly or indirectly, solicit, seek, enter into, conduct or participate in any discussions or negotiations, or enter into any agreement with any person or entity, regarding the sale, lease or other transfer of the Facilities.

15.18Brokerage Commissions.    Each of Purchaser, on one hand, and Seller, on the other hand, represents and warrants to the other that it has not dealt with any broker or finder in connection with the transaction which is the subject of this Agreement other than Stifel Nicholas, which firm was retained by Seller and which firm shall be paid by Seller. Seller and Purchaser each covenant and agree to indemnify and hold harmless the other from and against any and all costs, expenses, liabilities, claims, demands, suits, judgments and interest, including, without being limited to, reasonable attorneys’ fees and disbursements, arising out of or in connection with any claim by any other broker or agent with respect to this Agreement, the negotiation of this Agreement or the transactions contemplated herein based upon the acts of the indemnifying party.

15.19Survival. Subject to the limitations set forth in this Section 15.19, the representations, warranties and covenants contained in this Agreement shall survive the Closing. The aggregate liability of Seller after the Closing for any damages of Purchaser arising from or relating to breaches of Seller’s representations, warranties and covenants contained in this Agreement shall not exceed the amount of $7,500,000 (the “Cap”). Seller shall have no liability for damages arising from or relating to breaches of its representations, warranties and covenants contained in this Agreement, unless (i) Seller shall have received Notice of a claim specifying the factual basis of that claim in reasonable detail, to the extent then known by Purchaser, on or before December 1, 2015; and (ii) the aggregate amount of such damages exceeds $250,000, after which Seller shall be liable for the full amount of damages up to the Cap. Other than claims for fraud, intentional misrepresentation or pursuant to Section 4.4, Seller shall have no liability for damages arising from or relating to any matters if either (i) any such matter was disclosed in the Phase I Reports, or (ii) to the extent Purchaser had actual knowledge of the facts or

circumstances that relate to any such matter prior to the Closing. Except for the availability of injunctive relief where appropriate and except for remedies for fraud, Purchaser agrees that claims made pursuant to the limitations in this paragraph 15.19 provide the sole and exclusive remedy for Purchaser for or in connection with any breach of warranty or representation, breach or violation of any covenant or agreement, or any other claim, whether in contract, tort or otherwise (including any claim for conspiracy or aiding and abetting any other person), arising directly or indirectly from this Agreement or any of the transactions contemplated herein. Notwithstanding the foregoing limitations, claims for damages arising from or relating to a breach by Seller of Section 4.4 of this Agreement may be brought at any time following the Closing and such damages shall not be subject to the Cap.

[Signatures on following page]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed as of the day and year first above written.

SELLER:

SENIOR LIVING COMMUNITIES, LLC

By:    /s/Donald O. Thompson, Jr.

Donald O. Thompson, Jr.

Title: Manager

OSPREY VILLAGE AT AMELIA ISLAND, LTD.

By: Kapson GP LLC, General Partner

By: Senior Living Communities, LLC, Manager

By:    /s/Donald O. Thompson, Jr.

Donald O. Thompson, Jr.

Title: Manager

LITCHFIELD RETIREMENT, LLC SUMMIT HILLS, LLC RIDGECREST RETIREMENT, LLC

BRIGHTWATER RETIREMENT, LLC

MARSH'S EDGE, LLC CASCADES RETIREMENT, LLC CASCADES NURSING, LLC

By: Senior Living Communities, LLC, Manager

By:    /s/Donald O. Thompson, Jr.

Donald O. Thompson, Jr.

Title: Manager

(Asset Purchase Agreement —Signature Page 1 of 3)

HOMESTEAD HILL RETIREMENT LIMITED PARTNERSHIP

By: Kapson GP LLC, General Partner By: Senior Living Communities, LLC,

Manager

By:    /s/Donald O. Thompson, Jr.

Donald O. Thompson, Jr.

Title: Manager

(Asset Purchase Agreement —Signature Page 2 of 3)

PURCHASER:

NHI--REIT OF SEASIDE, LLC

By: /s/J. Justin Hutchens

J. Justin Hutchens, President

(Asset Purchase Agreement —Signature Page 3 of 3)

EXHIBIT A

FACILITIES

Facility Name Subtenant	Street Address County	Facility Type (per license) Beds/Units
Homestead Hills Homestead Hill Retirement Limited Partnership	3250 Homestead Club Drive Winston-Salem, NC 27013 County: Forsyth	142 independent living units (80 cottages ; 62 apartments) 48 assisted living units and 18 memory care units (licensed for 66 adult care beds, including 18 Alzheimer’s/Dementia special care units) 40 skilled nursing beds Under construction: 33 independent living apartments (expected completion June 2015) Potential cottages to be constructed: 3
RidgeCrest Ridgecrest Retirement, LLC	1000 RidgeCrest Lane Mt. Airy, NC 27030 County: Surry	60 independent living apartments 24 assisted living units (licensed for 28 adult care home beds) Zoned for an additional 60 independent living apartments and 24 health care units
The Lakes at Litchfield Litchfield Retirement, LLC	120 Lakes at Litchfield Drive Pawley’s Island, SC 29585 County: Georgetown	Licensed as a Continuing Care Retirement Community 119 independent living units (59 cottages; 60 apartments) 41 assisted living units and 24 memory care units (licensed for 79 CRCF beds) 24 skilled nursing beds (17 community and 7 institutional) Potential cottages to be constructed: 1 duplex (2 units)

Facility Name Subtenant	Street Address County	Facility Type (per license) Beds/Units
Summit Hills Summit Hills, LLC	110 Summit Hills Drive Spartanburg, SC 29307 County: Spartanburg	Licensed as a Continuing Care Retirement Community 129 independent living units (69 cottages; 60 apartments) 51 assisted living units and 12 memory care units (licensed for 79 CRCF beds) 33 skilled nursing beds Potential cottages to be constructed: 60
Brightwater Brightwater Retirement, LLC	101 Brightwater Drive Myrtle Beach, SC 29579 County: Horry	Licensed as a Continuing Care Retirement Community 114 independent living units (18 cottages; 96 apartments) 24 assisted living units and 24 memory care units (licensed for 56 CRCF beds) 67 skilled nursing beds Development approvals for an additional 90 cottages and 90 apartments
Cascades Verdae Cascades Retirement, LLC (independent living units) Cascades Nursing, LLC (non- independent living units/beds)	10 Fountainview Terrace Greenville, SC 29607 County: Greenville	Licensed as a Continuing Care Retirement Community 207 independent living units (43 cottages; 164 villas) 48 assisted living units and 24 memory care units (licensed for 92 CRCF beds) 44 skilled nursing beds Under construction: horizontal improvements on additional land for 23 cottages Potential cottages and villas to be constructed: 23 cottages and 40 villas

Facility Name Subtenant	Street Address County	Facility Type (per license) Beds/Units
Marsh’s Edge Marsh’s Edge, LLC	136 Marsh’s Edge Lane St. Simons Island, GA 31522 County: Glynn	Licensed as a Continuing Care Retirement Community 140 independent living units (30 cottages; 110 apartments) 20 assisted living units and 12 memory care units (licensed for 32 personal care home beds) 20 skilled nursing beds Development approvals for an additional 60 apartments
Osprey Village Osprey Village at Amelia Island, Ltd.	48 Osprey Village Drive Amelia Island, FL 32034 County: Nassau	130 independent living units (94 cottages; 36 apartments) 30 assisted living units and 10 memory care units (licensed for 44 assisted living with extended congregate care beds)

EXHIBIT B-1

Form of Deed (North Carolina)

THIS INSTRUMENT PREPARED BY:

AFTER RECORDING RETURN TO:

PIN:

Excise Tax $

NORTH CAROLINA                    SPECIAL WARRANTY DEED

COUNTY

THIS DEED made as of the day of, 2014, by and between

,    a(n)     (the    "Grantor"),    whose    address    is    _,    and

,    a(n)     (the "Grantee"), whose address is.    The designation Grantor and Grantee, as used herein, shall include said parties, their heirs, successors and assigns, and shall include singular, plural, masculine, feminine or neuter, as required by context.

This is not the personal residence of Grantor.

W I T N E S S E T H:

NOW, THEREFORE, the Grantor, for a valuable consideration paid by the Grantee, the receipt of which is hereby acknowledged, has and by these presents does grant, bargain, sell and convey unto Grantee in fee simple, that certain lot or parcel of land situated in the City

of, follows:

County, North Carolina and more particularly described as

See Exhibit Aattached hereto and made a part hereof by this reference.

TO HAVE AND TO HOLD the aforesaid lot or parcel of land and all privileges and appurtenances thereto belonging to the Grantee in fee simple.

And the Grantor covenants with the Grantee, that Grantor has done nothing to impair such title as Grantor received, and Grantor will warrant and defend the title against the lawful claims of all persons claiming by, under or through Grantor, except for the exceptions hereinafter stated.

Title to the property hereinabove described is subject to the following exceptions:

All easements restrictions and rights of way of record and the lien for ad valorem taxes for 2015 and subsequent years not yet due and payable.

[signature appears on the following page]

IN WITNESS WHEREOF, the Grantor has caused this instrument to be duly executed as of the day and year first above written.

a(n)

By: Name: Its:

STATE OF_ COUNTY OF_

I certify that the following person personally appeared before me this day, acknowledging to me that he/she signed the foregoing document:

(insert name, not title)

Date:, 2014

Print Name: Notary Public

(Official Seal)    My Commission expires:

Exhibit A

Legal Description

EXHIBIT B-2

Form of Deed

(South Carolina)

THIS INSTRUMENT WAS PREPARED BY

AND SHOULD BE RETURNED TO:

SPACE ABOVE THIS LINE FOR RECORDER'S USE

SPECIAL WARRANTY DEED

THIS SPECIAL WARRANTY DEED, made and executed as of the

day of

,    2014,    by        ,    a(n)         (hereinafter    referred        to        as    the    "Grantor")        whose    address    is

,    to    ,    a(n)

    (hereinafter referred to as the "Grantee"), whose address is.

W I T N E S S E T H:

THAT the Grantor, for and in consideration of the sum of TEN DOLLARS ($10.00) and other valuable considerations, the receipt and sufficiency of which are hereby acknowledged by these presents does grant, bargain, sell, alien, remise, release, convey, and confirm unto the Grantee those certain pieces, parcels or tracts of land situated inCounty, South Carolina, the same being more particularly described on the attached Exhibit "A" (hereinafter referred to as the "Subject Property");

TOGETHER WITH all the tenements, hereditaments, easements and appurtenances, including riparian rights, if any, thereto belonging or in anywise appertaining;

SUBJECT TO all restrictions, covenants, easements and stipulations of record affecting the Property.

TO HAVE AND TO HOLD the Subject Property in fee simple forever.

AND the Grantor does hereby covenant with and warrant to the Grantee that the Grantor is lawfully seized of the Subject Property in fee simple; that the Subject Property is not the homestead of Grantor; that the Grantor has good right and lawful authority to sell and convey the Subject Property; and that the Grantor fully warrants the title to the Subject Property and will defend the same against the lawful claims of all persons claiming by, through or under the Grantor, but against none other.

[Signature Page Follows]

IN WITNESS WHEREOF, the Grantor has caused these presents to be executed in manner and form sufficient to bind it as of the day and year first above written.

A(n)

By: Name: Title:

Witness:

Witness:

STATE OF COUNTY OF

The    foregoing    instrument    was    acknowledged    before    me    this    

day    of

, 2014, by, theof

, a(n), for and on behalf of said

. He/She is personally known to me.

[NOTARY SEAL]

Notary Public Signature

Typed or Printed Notary Name

Notary Public-State of Commission No.: My Commission Expires:

The address for real estate tax bills is as follows:

EXHIBIT A TO SPECIAL WARRANTY DEED

EXHIBIT B-3

Form of Deed (Georgia)

After recording return to:

SPECIAL WARRANTY DEED

THIS    INDENTURE    is    made    this    day    of    _,    2014,    by

, a(n)

(the "Grantor"), and

, a(n)(the "Grantee").

WITNESSETH, that the Grantor, for and in consideration of the sum of One Dollar and no/100ths ($1.00) lawful money of the United States of America, unto it well and truly paid by the Grantee, at or before the sealing and delivery hereof, the receipt whereof is hereby acknowledged, has granted, bargained, sold and conveyed, and by these presents does hereby grant, bargain, sell and convey unto the Grantee, its successors and assigns, the following described property:

ALL THAT CERTAIN lot or parcel of land situate at,

, Georgia, as more fully described on Exhibit A, attached hereto and made a part hereof.

UNDER AND SUBJECT TO, AND TOGETHER WITH, all easements, covenants, restrictions, declarations and encumbrances of record (collectively, the "Permitted Exceptions").

TOGETHER with all and singular the buildings, improvements, ways, streets, alleys, driveways, passages, easements, rights of way, agreements of record, waters, water-courses, rights, liberties, privileges, hereditaments and appurtenances, whatsoever unto the hereby granted premises belonging, or in any wise appertaining, and the reversions and remainders, rents, issues, and profits thereof, and all the estate, right, title, interest, property, claim and demand whatsoever of it, the Grantor, in law, equity, or otherwise howsoever, of, in and to the same and every part thereof.

TO HAVE AND TO HOLD the said bargained premises, together with all and singular the rights, members and appurtenances thereof, to the same being, belonging or in any wise appertaining, to the own proper use, benefit and behoove of Grantee, its successors and assigns, in fee simple.

AND the Grantor will warrant and forever defend the right and title to the above described property unto the Grantee against the claim of all persons whomsoever claiming by, through or under Grantor, subject to the Permitted Exceptions.

IN WITNESS WHEREOF, the Grantor has duly executed this Special Warranty Deed as of the day and year first above written.

Signed, sealed and delivered in the presence of:	Grantor:
Unofficial Witness	A(n)
Notary Public	By:
	Name:
My commission expires:	Title:
Seal

Exhibit A

Legal Description

EXHIBIT B-4

Form of Deed (Florida)

PREPARED BY:

AFTER RECORDING RETURN TO:

SPECIAL WARRANTY DEED

THIS SPECIAL WARRANTY DEED is made and entered into as of thisday of, 2014 by, a(n), whose post office address is(hereinafter called the “Grantor”), to

, a(n), whose post office address is

    (hereinafter    called    the    “Grantee”). Wherever used herein, the terms “grantor” and “grantee” shall include singular and plural, heirs, legal representatives, and assigns of individuals, and the successors and assigns of corporations, wherever the context so admits or requires.

W I T N E S S E T H:

The Grantor, for and in consideration of the sum of Ten and No/100 Dollars ($10.00) and other valuable considerations, receipt whereof is hereby acknowledged, by these presents does grant, bargain, sell, alien, remise, release, convey and confirm unto the Grantee, all that certain

land situated in

County, Florida (the “Property”), as more particularly

described on Exhibit Aattached hereto and incorporated herein by this reference.

TOGETHER with all the tenements, hereditaments and appurtenances thereto belonging or in anywise appertaining.

TO HAVE AND TO HOLD, the same in fee simple forever.

AND, the Grantor hereby covenants with the Grantee that it is lawfully seized of the Property in fee simple; that it has good right and lawful authority to sell and convey the Property; and the Grantor hereby covenants that Grantor will warrant and defend title to the Property against the lawful claims of all persons claiming by, through or under Grantor alone, but against none other.

This Deed is hereby made expressly subject to (a) zoning laws, rules and regulations affecting the Property, if any, (b) the lien of current ad valorem taxes not yet due and payable, which taxes shall be prorated as of the date of this Deed and are hereby assumed by Grantee, and the lien of all

future ad valorem taxes, which taxes Grantee hereby assumes and agrees to pay, and (c) all restrictions, covenants, easements and stipulations of record affecting the Property.

IN WITNESS WHEREOF, the Grantor has caused these presents to be executed the day and year first above written.

Signed, sealed and delivered in the presence of:

Witnesses:

GRANTOR:

, a(n)_

[Print Name]

By: Name: Its:

[Print Name]

STATE OF COUNTY OF

)

) ss:

)

The foregoing instrument was acknowledged before me thisday of,

2014,    by    ,    the        of

,    a(n)    ,    on    behalf    of    the

. He/She is personally known to me or has produced a valid driver’s license as identification.

(Signature)

(SEAL)

(Print Name) NOTARY PUBLIC

STATE OF

EXHIBIT “A”

TO SPECIAL WARRANTY DEED LEGAL DESCRIPTION OF THE PROPERTY

EXHIBIT C

FORM OF QUITCLAIM BILL OF SALE

BILL OF SALE

HEALTHCARE REIT, INC. a Delaware corporation (“Grantor”), for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, does hereby grant, remise, release and quitclaim unto NHI-REIT OF SEASIDE, LLC, a Delaware limited liability company (“Grantee”), all of the fixtures and articles of personal property of every kind and nature that are owned by Grantor and used in the operation of

    (the    “Facility”),    including,    without    limitation,    all machinery, equipment, furniture, furnishings, accessories, plans, specifications, drawings, architectural renderings, and all other tangible personal property used in the operation of the Facility (collectively, the “Assets”).

TO HAVE AND TO HOLD the same unto Grantee and its successors and assigns forever.

This Bill of Sale is made without representations or warranties of any kind, either express or implied, it being specifically intended that the assignment of the Assets is on an “as is, where is” basis only. THERE ARE NO IMPLIED WARRANTIES OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE AND IN NO EVENT SHALL GRANTOR BE LIABLE FOR INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES.

IN WITNESS WHEREOF, Grantor has executed this Bill of Sale as of the

day of, 2014.

[GRANTOR]

By: [Name]

[Title]

EXHIBIT C-1

FORM OF BILL OF SALE

BILL OF SALE

,    a    

(“Grantor”),    for    good    and    valuable

consideration, the receipt and sufficiency of which are hereby acknowledged, does hereby grant, bargain, sell, transfer and deliver unto NHI-REIT OF SEASIDE, LLC, a Delaware limited liability company (“Grantee”), all of the fixtures and articles of personal property of every kind and nature that are owned by Grantor and used in the operation of

    (the    “Facility”),    including,    without    limitation,    all machinery, equipment, furniture, furnishings, accessories, plans, specifications, drawings, architectural renderings, and all other tangible personal property used in the operation of the Facility (collectively, the “Assets”).

TO HAVE AND TO HOLD the same unto Grantee and its successors and assigns forever.

This Bill of Sale is made without representations or warranties of any kind, either express or implied, except as to title, it being specifically intended that the assignment of the Assets is on an “as is, where is” basis only. THERE ARE NO IMPLIED WARRANTIES OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE AND IN NO EVENT SHALL GRANTOR BE LIABLE FOR INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES.

IN WITNESS WHEREOF, Grantor has executed this Bill of Sale as of the

day of, 2014.

[GRANTOR]

By: [Name]

[Title]

EXHIBIT D

FIRPTA AFFIDAVIT

Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. To inform the transferee that withholding of tax is not required upon the disposition of certain premises as more particularly described in Exhibit Aattached hereto, the undersigned hereby certifies the following on behalf of HEALTH CARE REIT, INC. (“Seller”):

1.Seller is not a foreign person, foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations);

2. Seller’s federal tax identification number is [•];

3. Seller’s address is [•];

4.Seller understands that this certification may be disclosed to the Internal Revenue Service by transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.

Under penalties of perjury, I declare that I have examined this certification and to the best of my actual and current knowledge and belief it is true, correct and complete this [•] day of December, 2014.

HEALTH CARE REIT, INC.

By:

EXHIBIT A to FIRPTA AFFIDAVIT PROPERTY DESCRIPTION

EX-10.32

Exhibit 10.32

Execution Version

NATIONAL HEALTH INVESTORS, INC.

$125,000,000 3.99% Series A Senior Notes due January 13, 2023

$100,000,000 4.51% Series B Senior Notes due January 13, 2027

NOTE PURCHASE AGREEMENT

Dated January 13, 2015

TABLE OF CONTENTS

SECTION HEADING    PAGE SECTION 1.    AUTHORIZATION OF NOTES         1

SECTION 2.    SALE AND PURCHASE OF NOTES    1

SECTION 3.    CLOSING    2

SECTION 4.    CONDITIONS TO CLOSING    2

Section 4.1.    Representations and Warranties    2

Section 4.2.    Performance; No Default    2

Section 4.3.    Certificates    2

Section 4.4.    Opinions of Counsel    3

Section 4.5.    Guaranty Agreements    3

Section 4.6.    Purchase Permitted By Applicable Law, Etc    3

Section 4.7.    Sale of Other Notes    4

Section 4.8.    Payment of Special Counsel Fees    4

Section 4.9.    Private Placement Number    4

Section 4.10.    Changes in Corporate Structure    4

Section 4.11.    Funding Instructions    4

Section 4.12.    Amendment to Credit Agreement    4

Section 4.13.    Proceedings and Documents    4

SECTION 5.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY    5

Section 5.1.    Existence, Qualification and Power    5

Section 5.2.    Authorization; No Contravention    5

Section 5.3.    Governmental Authorization; Consents    5

Section 5.4.    Binding Effect    5

Section 5.5.    Financial Statements; No Material Adverse Effect    5

Section 5.6.    Litigation    6

Section 5.7.    No Default    6

Section 5.8.    Ownership of Property; Liens    6

Section 5.9.    Environmental Compliance    6

Section 5.10.    Insurance    6

Section 5.11.    Taxes    6

Section 5.12.    ERISA Compliance    7

Section 5.13.    Subsidiaries    8

Section 5.14.    Disclosure    8

Section 5.15.    Compliance with Law    8

Section 5.16.    Margin Regulations; Investment Company Act; Etc.    8

Section 5.17.    Solvency    9

Section 5.18.    Permits; Franchises    9

Section 5.19.    Material Agreements    9

Section 5.20.    REIT Status    9

Section 5.21.    Lease Property    9

Section 5.22.    Intellectual Property Matters    9

Section 5.23.    Employee Relations     10

Section 5.24.    Burdensome Provisions     10

Section 5.25.    [Reserved]     10

Section 5.26.    Private Offering by the Company     10

Section 5.27.    Foreign Assets Control Regulations, Etc     10

SECTION 6.    REPRESENTATIONS OF THE PURCHASERS     12

Section 6.1.    Purchase for Investment     12

Section 6.2.    Source of Funds     12

SECTION 7.    GUARANTIES     14

SECTION 8.    PAYMENT AND PREPAYMENT OF THE NOTES     14

Section 8.1.    Maturity     14

Section 8.2.    Optional Prepayments with Make-Whole Amount     14

Section 8.3.    Allocation of Partial Prepayments     14

Section 8.4.    Maturity; Surrender, Etc     15

Section 8.5.    Purchase of Notes     15

Section 8.6.    Make-Whole Amount     15

Section 8.7.    Payments Due on Non-Business Days     16

SECTION 9.    AFFIRMATIVE COVENANTS     17

Section 9.1.    Financial Statements; Budget     17

Section 9.2.    Certificates; Other Information     18

Section 9.3.    Notices     18

Section 9.4.    Payment of Obligations     19

Section 9.5.    Preservation of Existence, Etc     19

Section 9.6.    Maintenance of Properties     19

Section 9.7.    Maintenance of Insurance     19

Section 9.8.    Compliance with Law     19

Section 9.9.    Books and Records     19

Section 9.10.    Inspection Rights     20

Section 9.11.    Use of Proceeds     20

Section 9.12.    Financial Covenants     20

Section 9.13.    New Subsidiaries     20

Section 9.14.    Compliance with Agreements     21

Section 9.15.    Further Assurances     21

Section 9.16.    Status     21

Section 9.17.    Covenant to Secure Notes     21

Section 9.18.    Most Favored Lender Status     22

Section 9.19.    Information Required by Rule 144A     22

SECTION 10.    NEGATIVE COVENANTS     22

Section 10.1.    Liens     22

Section 10.2.    Investments     24

Section 10.3.    Indebtedness     25

Section 10.4.    Fundamental Changes     27

Section 10.5.    Dispositions     27

Section 10.6.    Change in Nature of Business     28

Section 10.7.    Transactions with Affiliates     28

Section 10.8.    Use of Proceeds; Margin Regulations.     28

Section 10.9.    Burdensome Agreements     29

Section 10.10.    Dissolution, Etc     29

Section 10.11.    Sale and Leaseback Transactions (as Lessee)     29

Section 10.12.    Amendments of Certain Agreements     30

Section 10.13.    Restricted Payments     30

Section 10.14.    Accounting Change     30

Section 10.15.    Terrorism Sanctions Regulations     30

SECTION 11.    EVENTS OF DEFAULT     30

SECTION 12.    REMEDIES ON DEFAULT, ETC     33

Section 12.1.    Acceleration     33

Section 12.2.    Other Remedies     33

Section 12.3.    Rescission     33

Section 12.4.    No Waivers or Election of Remedies, Expenses, Etc     34

SECTION 13.    REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES     34

Section 13.1.    Registration of Notes     34

Section 13.2.    Transfer and Exchange of Notes     34

Section 13.3.    Replacement of Notes     35

SECTION 14.    PAYMENTS ON NOTES     35

Section 14.1.    Place of Payment     35

Section 14.2.    Home Office Payment     35

SECTION 15.    EXPENSES, INDEMNITY, ETC     36

Section 15.1.    Transaction Expenses     36

Section 15.2.    Indemnification     36

Section 15.3.    Survival     37

SECTION 16.    SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE

AGREEMENT     37

SECTION 17.    AMENDMENT AND WAIVER     37

Section 17.1.    Requirements     37

Section 17.2.    Solicitation of Holders of Notes     38

Section 17.3.    Binding Effect, etc     38

Section 17.4.    Notes Held by Company, Etc     39

SECTION 18.    NOTICES     39

SECTION 19.    REPRODUCTION OF DOCUMENTS     39

SECTION 20.    CONFIDENTIAL INFORMATION     40

SECTION 21.    SUBSTITUTION OF PURCHASER     41

SECTION 22.    MISCELLANEOUS     41

Section 22.1.    Successors and Assigns     41

Section 22.2.    Accounting Terms     41

Section 22.3.    Severability     42

Section 22.4.    Construction, etc     42

Section 22.5.    Counterparts     42

Section 22.6.    Governing Law     42

Section 22.7.    Jurisdiction and Process; Waiver of Jury Trial     42

Section 22.8.    Rules of Interpretation     43

Section 22.9.    Accounting for Derivatives     44

Section 22.10.    Transaction References     44

SCHEDULE A	---	DEFINED TERMS
SCHEDULE A(1)	---	LIMITED GUARANTORS
SCHEDULE A(2)	---	SUBSIDIARY GUARANTORS
SCHEDULE 1(a)	---	FORM OF 3.99% SERIES A SENIOR NOTE DUE JANUARY 13, 2023
SCHEDULE 1(b)	---	FORM OF 4.51% SERIES B SENIOR NOTE DUE JANUARY 13, 2027
SCHEDULE 4.4	---	FORM OF OPINION OF SPECIAL COUNSEL FOR THE COMPANY, THE
	---	SUBSIDIARY GUARANTORS AND THE LIMITED GUARANTORS
SCHEDULE B	---	INFORMATION RELATING TO PURCHASERS
SCHEDULE 5.12(d)	---	PENSION PLANS
SCHEDULE 5.13	---	SUBSIDIARIES
SCHEDULE 5.21(a)	---	LEASE PROPERTIES
SCHEDULE 5.21(b)	---	UNENCUMBERED LEASE PROPERTIES
SCHEDULE 10.1	---	EXISTING LIENS
SCHEDULE 10.3	---	EXISTING DEBT
EXHIBIT B	---	COMPLIANCE CERTIFICATE

NATIONAL HEALTH INVESTORS, INC.

222 Robert Rose Drive Murfreesboro, TN 37129

$125,000,000 3.99% Series A Senior Notes due January 13, 2023

$100,000,000 4.51% Series B Senior Notes due January 13, 2027

January 13, 2015

TO EACH OF THE PURCHASERS LISTED IN

SCHEDULE B HERETO:

Ladies and Gentlemen:

National Health Investors, Inc., a Maryland corporation (together with any successor thereto that becomes a party hereto pursuant to Section 10.4, the “Company”), agrees with each of the Purchasers as follows:

SECTION 1.    AUTHORIZATION OF NOTES.

The Company will authorize the issue and sale of (i) $125,000,000 aggregate principal amount of its 3.99% Series A Senior Notes due January 13, 2023 (as amended, restated or otherwise modified from time to time pursuant to Section 17 and including any such notes issued in substitution therefor pursuant to Section 13, the “Series A Notes”) and (ii) $100,000,000 aggregate principal amount of its 4.51% Series B Senior Notes due January 13, 2027 (as amended, restated or otherwise modified from time to time pursuant to Section 17 and including any such notes issued in substitution therefor pursuant to Section 13, the “Series B Notes”; and together with the Series A Notes, the “Notes”). The Series A Notes and the Series B Notes shall be substantially in the form set out in Schedule 1(a) and Schedule 1(b), respectively. Certain capitalized and other terms used in this Agreement are defined in Schedule A. References to a “Schedule” are references to a Schedule attached to this Agreement unless otherwise specified. References to a “Section” are references to a Section of this Agreement unless otherwise specified.

SECTION 2.    SALE AND PURCHASE OF NOTES.

Subject to the terms and conditions of this Agreement, the Company will issue and sell to each Purchaser and each Purchaser will purchase from the Company, at the Closing provided for in Section 3, Notes in the principal amount specified opposite such Purchaser’s name in Schedule B at the purchase price of 100% of the principal amount thereof. The Purchasers’

obligations hereunder are several and not joint obligations and no Purchaser shall have any liability to any Person for the performance or non-performance of any obligation by any other Purchaser hereunder.

SECTION 3. CLOSING.

The sale and purchase of the Notes to be purchased by each Purchaser shall occur at the offices of King & Spalding LLP, 1185 Avenue of the Americas, New York, New York 10036, at 11:00 a.m., New York city time, at a closing (the “Closing”) on January 13, 2015 or on such other Business Day thereafter on or prior to January 13, 2015 as may be agreed upon by the Company and the Purchasers. At the Closing the Company will deliver to each Purchaser the Notes to be purchased by such Purchaser in the form of a single Note (or such greater number of Notes in denominations of at least $100,000 as such Purchaser may request) dated the date of the Closing and registered in such Purchaser’s name (or in the name of its nominee), against delivery by such Purchaser to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the

Company to account number 5003254 at Pinnacle National Bank, 150 3rd Avenue South,

Nashville, Tennessee 37201. If at the Closing the Company shall fail to tender such Notes to any Purchaser as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to such Purchaser’s satisfaction, such Purchaser shall, at its election, be relieved of all further obligations under this Agreement, without thereby waiving any rights such Purchaser may have by reason of any of the conditions specified in Section 4 not having been fulfilled to such Purchaser’s satisfaction or such failure by the Company to tender such Notes.

SECTION 4. CONDITIONS TO CLOSING.

Each Purchaser’s obligation to purchase and pay for the Notes to be sold to such Purchaser at the Closing is subject to the fulfillment to such Purchaser’s satisfaction, prior to or at the Closing, of the following conditions:

Section 4.1. Representations and Warranties. The representations and warranties of the Company in this Agreement shall be correct when made and at the Closing.

Section 4.2. Performance; No Default. The Company shall have performed and complied with all agreements and conditions contained in this Agreement required to be performed or complied with by it prior to or at the Closing. Before and after giving effect to the issue and sale of the Notes (and the application of the proceeds thereof as contemplated by Section 9.11, no Default or Event of Default shall have occurred and be continuing.

Section 4.3.    Certificates.

(a)Officer’s Certificate. The Company shall have delivered to such Purchaser an Officer’s Certificate, dated the date of the Closing, certifying that the conditions specified in Sections 4.1, 4.2 and 4.10 have been fulfilled.

(b)Secretary’s Certificate of the Company. The Company shall have delivered to such Purchaser a certificate of its Secretary or Assistant Secretary, dated the date of the Closing, certifying as to (i) the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of the Notes and this Agreement and (ii) the Company’s organizational documents as then in effect.

(c)Secretary’s Certificate of the Guarantors. Each Subsidiary Guarantor and Limited Guarantor shall have delivered to such Purchaser a certificate of its Secretary or Assistant Secretary, dated the date of the Closing, certifying as to (i) the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of the Note Documents to which it is a party and (ii) the Company’s organizational documents as then in effect.

(d)Good Standing Certificates. Each Credit Party shall deliver to such Purchaser a certificate of good standing or existence dated as of a recent date for each Credit Party from the Secretary of State of such Credit Party’s state of formation and each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to be so qualified could not reasonably be expected to have a Material Adverse Effect.

(e)Certified Articles. Each Credit Party shall deliver to such Purchaser certified copies of the articles or certificate of incorporation, certificate of organization or limited partnership, or other registered organizational documents from the Secretary of State of Company’s state of formation.

Section 4.4. Opinions of Counsel. Such Purchaser shall have received opinions in form and substance satisfactory to such Purchaser, dated the date of the Closing (a) from Harwell Howard Hyne Gabbert & Manner, P.C. and Loeb & Loeb PLC, counsel for the Credit Parties, covering the matters set forth in Schedule 4.4 and covering such other matters incident to the transactions contemplated hereby as such Purchaser or its counsel may reasonably request (and the Company hereby instructs its counsel to deliver such opinion to the Purchasers) and (b) from King & Spalding LLP, the Purchasers’ special counsel in connection with such transactions, covering such matters incident to such transactions as such Purchaser may reasonably request.

Section 4.5.    Guaranty Agreements.

(a)Subsidiary Guaranty Agreement. Such Purchaser shall have received a Subsidiary Guaranty Agreement duly executed by each Subsidiary Guarantor in form and substance satisfactory to such Purchaser

(b)Limited Guaranty Agreement. Such Purchaser shall have received a Limited Guaranty Agreement duly executed by each Limited Guarantor in form and substance satisfactory to such Purchaser.

Section 4.6.    Purchase Permitted By Applicable Law, Etc.    On the date of the

Closing such Purchaser’s purchase of Notes shall (a) be permitted by the laws and regulations of each jurisdiction to which such Purchaser is subject, without recourse to provisions (such as section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (b) not violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) not subject such Purchaser to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date hereof. If requested by such Purchaser, such Purchaser shall have received an Officer’s Certificate certifying as to such matters of fact as such Purchaser may reasonably specify to enable such Purchaser to determine whether such purchase is so permitted.

Section 4.7. Sale of Other Notes. Contemporaneously with the Closing the Company shall sell to each other Purchaser and each other Purchaser shall purchase the Notes to be purchased by it at the Closing as specified in Schedule B.

Section 4.8. Payment of Special Counsel Fees. Without limiting Section 15.1, the Company shall have paid on or before the Closing the fees, charges and disbursements of the Purchasers’ special counsel referred to in Section 4.4 to the extent reflected in a statement of such counsel rendered to the Company at least one Business Day prior to the Closing.

Section 4.9. Private Placement Number. A Private Placement Number issued by Standard & Poor’s CUSIP Service Bureau (in cooperation with the SVO) shall have been obtained for the Series A Notes and the Series B Notes.

Section 4.10. Changes in Corporate Structure. The Company shall not have changed its jurisdiction of incorporation or organization, as applicable, or been a party to any merger or consolidation or succeeded to all or any substantial part of the liabilities of any other entity since December 31, 2013.

Section 4.11. Funding Instructions. At least three Business Days prior to the date of the Closing, each Purchaser shall have received written instructions signed by a Responsible Officer on letterhead of the Company confirming the information specified in Section 3 including (i) the name and address of the transferee bank, (ii) such transferee bank’s ABA number and (iii) the account name and number into which the purchase price for the Notes is to be deposited.

Section 4.12. Amendment to Credit Agreement. Such Purchaser shall have received a duly executed amendment to the Credit Agreement, in form and substance satisfactory to such Purchasers.

Section 4.13. Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be satisfactory to such Purchaser and its special counsel, and such Purchaser and its special counsel shall have received all such counterpart originals or certified or other copies of such documents as such Purchaser or such special counsel may reasonably request.

SECTION 5.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to each Purchaser that:

Section 5.1. Existence, Qualification and Power. Each Credit Party (a) is duly organized or formed and validly existing under the Applicable Law of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own its assets and carry on its business and (ii) execute, deliver, and perform its obligations under the Note Documents to which it is a party and consummate the transactions contemplated hereby or thereby, and (c) is duly qualified and is licensed and in good standing under the Applicable Law of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or licenses, except in each case referred to in clause (b)(i) or (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

Section 5.2. Authorization; No Contravention. The execution, delivery and performance by each Credit Party of each Note Document to which such Person is party, have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, (i) any Contractual Obligation to which such Person is a party or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (c) violate any law.

Section 5.3. Governmental Authorization; Consents. No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Credit Party of this Agreement, any other Note Document or the consummation of the transactions contemplated hereby or thereby.

Section 5.4. Binding Effect. This Agreement has been, and each other Note Document, when delivered hereunder, will have been, duly executed and delivered by each Credit Party that is party thereto. This Agreement constitutes, and each other Note Document when so delivered will constitute, a legal, valid and binding obligation of such Credit Party, enforceable against each Credit Party that is party thereto in accordance with its terms, except as enforceability may be limited by bankruptcy laws and general principles of equity.

Section 5.5.    Financial Statements; No Material Adverse Effect.

(a)The Company has heretofore furnished to the Purchasers the Audited Financial Statements. Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Company and its Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to normal year-end adjustments and the absence of footnotes in the case of the statements referred to in clause (ii) above.

(b)Since the date of the Audited Financial Statements, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect.

Section 5.6. Litigation. There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Company, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against the Company or any of its Subsidiaries or against any of their properties or revenues that (a) purport to affect or pertain to this Agreement, any other Note Document or the transactions contemplated hereby or thereby, or

(b)either individually or in the aggregate, if determined adversely, could reasonably be expected to have a Material Adverse Effect (after the application of any proceeds of insurance as to which the insurance carrier has been notified of the potential claim and does not dispute the coverage of such payment).

Section 5.7. No Default. Neither the Company nor any Subsidiary is in default under or with respect to any Contractual Obligation that could either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Note Document.

Section 5.8. Ownership of Property; Liens. The Company and each Subsidiary has good and marketable title in fee simple to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The property of the Company and its Subsidiaries is subject to no Liens, other than Permitted Liens.

Section 5.9. Environmental Compliance. There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Company, overtly threatened in writing, at law, in equity, in arbitration or before any Governmental Authority, by or against the Company or any of its Subsidiaries or against any of their properties or revenues that allege any material Environmental Liability that could reasonably be expected to have a Material Adverse Effect.

Section 5.10. Insurance. The properties of the Company and its Subsidiaries (or, in the case of real property, equipment or other personal property leased to others, their respective lessees) are insured with financially sound and reputable insurance companies not Affiliates of the Company, in such amounts, after giving effect to any self-insurance compatible with the following standards, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Company or the applicable Subsidiary operates.

Section 5.11. Taxes. The Company and its Subsidiaries have filed all Federal, state and other material tax returns and reports required to be filed, and have paid all Federal, state and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP. There is no proposed tax

assessment against the Company or any Subsidiary that would, if made, have a Material Adverse Effect.

Section 5.12. ERISA Compliance.

(a)Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or state laws. Each Pension Plan which is intended to be a qualified plan under Section 401(a) of the Code as currently in effect has been determined by the Internal Revenue Service to be qualified under Section 401(a) of the Code and the trust related thereto has been determined by the Internal Revenue Service to be exempt from federal income tax under Section 501(a) of the Code. To the best knowledge of the Company, nothing has occurred that would prevent or cause the loss of such tax-qualified status.

(b)There are no pending or, to the best knowledge of the Company, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect.

(c)(i) No ERISA Event has occurred, and neither the Company nor any ERISA Affiliate is aware of any fact, event or circumstance that could reasonably be expected to constitute or result in an ERISA Event with respect to any Pension Plan; (ii) the Company and each ERISA Affiliate has met all applicable requirements under the Pension Funding Rules in respect of each Pension Plan, and no waiver of the minimum funding standards under the Pension Funding Rules has been applied for or obtained; (iii) as of the most recent valuation date for any Pension Plan, the funding target attainment percentage (as defined in Section 430(d)(2) of the Code) is 60% or higher and neither the Company nor any ERISA Affiliate knows of any facts or circumstances that could reasonably be expected to cause the funding target attainment percentage for any such plan to drop below 60% as of the most recent valuation date; (iv) neither the Company nor any ERISA Affiliate has incurred any liability to the PBGC other than for the payment of premiums, and there are no premium payments which have become due that are unpaid; (v) neither the Company nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or Section 4212(c) of ERISA; and (vi) no Pension Plan has been terminated by the plan administrator thereof nor by the PBGC, and no event or circumstance has occurred or exists that could reasonably be expected to cause the PBGC to institute proceedings under Title IV of ERISA to terminate any Pension Plan.

(d)Neither the Company nor any ERISA Affiliate maintains or contributes to, or has any unsatisfied obligation to contribute to, or liability under, any active or terminated Pension Plan other than those listed on Schedule 5.12(d) hereto.

(e)The execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions of

section 406 of ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation by the Company to each Purchaser in the first sentence of this Section 5.12(e) is made in reliance upon and subject to the accuracy of such Purchaser’s representation in Section 6.2 as to the sources of the funds to be used to pay the purchase price of the Notes to be purchased by such Purchaser.

Section 5.13. Subsidiaries. As of the Closing Date, the Company has no Subsidiaries other than those specifically disclosed on Schedule 5.13.

Section 5.14. Disclosure. The Company has disclosed to the Purchasers all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No report, financial statement, certificate or other information furnished (whether in writing or orally) by or on behalf of any Credit Party in connection with any Note Document to the Purchasers in connection with the transactions contemplated hereby or thereby and the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

Section 5.15. Compliance with Law. The Company and each Subsidiary is in compliance in all material respects with the requirements of all Applicable Laws (including, without limitation, as applicable, all Healthcare Laws) and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

Section 5.16. Margin Regulations; Investment Company Act; Etc.

(a)None of the proceeds of any Note issued hereunder will be used, directly or indirectly, for the purpose of (i) purchasing or carrying any margin stock, (ii) reducing or retiring any Indebtedness which was originally incurred to purchase or carry margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System) or (iii) any other purpose which violates or which would be inconsistent with Regulation U (12 CFR Part 221) or Regulation X (12 CFR Part 224) of the Board of Governors of the Federal Reserve System. Without limitation of the foregoing, at no time shall more than 25% of the value of the assets of the Company and its Subsidiaries on a consolidated basis consist of margin stock.

(b)Neither the Company nor any Subsidiary is (i) an “investment company”, a company “controlled” by an “investment company,” or an “investment advisor,” in each case as defined in, or subject to regulation under, the Investment Company Act of

1940, as amended, or (ii) otherwise subject to any other regulatory scheme limiting its ability to incur debt under this Agreement or the other Note Documents.

Section 5.17. Solvency. Each Credit Party is Solvent after giving effect to the transactions contemplated hereby.

Section 5.18. Permits; Franchises. The Company and each Subsidiary possesses, and will hereafter possess, all permits, consents, approvals, franchises and licenses required and rights to all trademarks, trade names, patents, and fictitious names, if any, necessary to or used in the course of business granted to it and enable it to conduct the business in which it is now engaged in compliance with Applicable Law, without known conflict with any trademark, trade names, patents or other proprietary right of any Person where the failure to possess such asset could reasonably be expected to have a Material Adverse Effect.

Section 5.19. Material Agreements. There is no existing default or event of default (after the expiration of any applicable grace or cure period) by any Credit Party under any Material Agreement, which might reasonably be expected to give rise to a Material Adverse Effect.

Section 5.20. REIT Status. The Company: (a) is a REIT, (b) has not revoked its election to be a REIT, (c) has not engaged in any “prohibited transactions” as defined in Section 856(b)(6)(iii) of the Internal Revenue Code (or any successor provision thereto), and (d) for its current “tax year” as defined in the Internal Revenue Code is and for all prior tax years subsequent to its election to be a REIT has been entitled to a dividends paid deduction which meets the requirements of Section 857 of the Internal Revenue Code.

Section 5.21. Lease Property.

(a)As of the Closing Date, Schedule 5.21(a) is a correct and complete list of each Lease Property of the Company and its Subsidiaries.

(b)As of the Closing Date, Schedule 5.21(b) is a correct and complete list of each Unencumbered Lease Property with respect to any Credit Party.

(c)Each of the properties included by the Company in the calculation of Aggregate Total Fixed Asset Value satisfies all of the requirements contained in the definition of Lease Property. Each of the properties included by the Company in the calculation of Aggregate Unencumbered Fixed Asset Value satisfies all of the requirements contained in the definition of Unencumbered Lease Property.

Section 5.22. Intellectual Property Matters. Each Credit Party and each Subsidiary thereof owns or possesses rights to use all material franchises, licenses, copyrights, copyright applications, patents, patent rights or licenses, patent applications, trademarks, trademark rights, service mark, service mark rights, trade names, trade name rights, copyrights and other rights with respect to the foregoing which are reasonably necessary to conduct its business. No event has occurred which permits, or after notice or lapse of time or both would permit, the revocation or termination of any such rights, and no Credit Party nor any Subsidiary thereof is liable to any

Person for infringement under Applicable Law with respect to any such rights as a result of its business operations.

Section 5.23. Employee Relations. No Credit Party or any Subsidiary thereof is party to any collective bargaining agreement or has any labor union been recognized as the representative of its employees. The Company knows of no pending, threatened or contemplated strikes, work stoppage or other collective labor disputes involving its employees or those of its Subsidiaries.

Section 5.24. Burdensome Provisions. The Credit Parties and their respective Subsidiaries do not presently anticipate that future expenditures needed to meet the provisions of any statutes, orders, rules or regulations of a Governmental Authority will be so burdensome as to have a Material Adverse Effect. No Subsidiary is party to any agreement or instrument or otherwise subject to any restriction or encumbrance that restricts or limits its ability to make dividend payments or other distributions in respect of its Equity Interests to the Company or any Subsidiary or to transfer any of its assets or properties to the Company or any other Subsidiary in each case other than existing under or by reason of the Note Documents or Applicable Law or as expressly permitted pursuant to Section 10.9.

Section 5.25. [Reserved].

Section 5.26. Private Offering by the Company. Neither the Company nor anyone acting on its behalf has offered the Notes or any similar Securities for sale to, or solicited any offer to buy the Notes or any similar Securities from, or otherwise approached or negotiated in respect thereof with, any Person other than the Purchasers and not more than 10 other Institutional Investors, each of which has been offered the Notes at a private sale for investment. Neither the Company nor anyone acting on its behalf has taken, or will take, any action that would subject the issuance or sale of the Notes to the registration requirements of section 5 of the Securities Act or to the registration requirements of any Securities or blue sky laws of any applicable jurisdiction.

Section 5.27. Foreign Assets Control Regulations, Etc. (a) Neither the Company nor any Controlled Entity is (i) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by the Office of Foreign Assets Control, United States Department of the Treasury (“OFAC”) (an “OFAC Listed Person”) (ii) an agent, department, or instrumentality of, or is otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, (x) any OFAC Listed Person or (y) any Person, entity, organization, foreign country or regime that is subject to any OFAC Sanctions Program, or (iii) otherwise blocked, subject to sanctions under or engaged in any activity in violation of other United States economic sanctions, including but not limited to, the Trading with the Enemy Act, the International Emergency Economic Powers Act, the Comprehensive Iran Sanctions, Accountability and Divestment Act (“CISADA”) or any similar law or regulation with respect to Iran or any other country, the Sudan Accountability and Divestment Act, any OFAC Sanctions Program, or any economic sanctions regulations administered and enforced by the United States or any enabling legislation or executive order relating to any of the foregoing (collectively, “U.S. Economic Sanctions”) (each OFAC Listed Person and each other Person, entity, organization and government of a country described in clause (i), clause (ii) or clause (iii), a “Blocked Person”). Neither the Company nor any Controlled Entity has been notified that its name

appears or may in the future appear on a state list of Persons that engage in investment or other commercial activities in Iran or any other country that is subject to U.S. Economic Sanctions.

(b)No part of the proceeds from the sale of the Notes hereunder constitutes or will constitute funds obtained on behalf of any Blocked Person or will otherwise be used by the Company or any Controlled Entity, directly or indirectly, (i) in connection with any investment in, or any transactions or dealings with, any Blocked Person, or (ii) otherwise in violation of U.S. Economic Sanctions.

(c)Neither the Company nor any Controlled Entity (i) has been found in violation of, charged with, or convicted of, money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes under the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as the Bank Secrecy Act), the USA PATRIOT Act or any other United States law or regulation governing such activities (collectively, “Anti-Money Laundering Laws”) or any U.S. Economic Sanctions violations, (ii) to the Company’s actual knowledge after making due inquiry, is under investigation by any Governmental Authority for possible violation of Anti-Money Laundering Laws or any U.S. Economic Sanctions violations, (iii) has been assessed civil penalties under any Anti-Money Laundering Laws or any U.S. Economic Sanctions, or (iv) has had any of its funds seized or forfeited in an action under any Anti-Money Laundering Laws. The Company has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that the Company and each Controlled Entity is and will continue to be in compliance with all applicable current and future Anti-Money Laundering Laws and U.S. Economic Sanctions.

(d)(1) Neither the Company nor any Controlled Entity (i) has been charged with, or convicted of bribery or any other anti-corruption related activity under any applicable law or regulation in a U.S. or any non-U.S. country or jurisdiction, including but not limited to, the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010 (collectively, “Anti-Corruption Laws”), (ii) to the Company’s actual knowledge after making due inquiry, is under investigation by any U.S. or non-U.S. Governmental Authority for possible violation of Anti-Corruption Laws, (iii) has been assessed civil or criminal penalties under any Anti-Corruption Laws or (iv) has been or is the target of sanctions imposed by the United Nations or the European Union;

(2)To the Company’s actual knowledge after making due inquiry, neither the Company nor any Controlled Entity has, within the last five years, directly or indirectly offered, promised, given, paid or authorized the offer, promise, giving or payment of anything of value to a Governmental Official or a commercial counterparty for the purposes of: (i) influencing any act, decision or failure to act by such Government Official in his or her official capacity or such commercial counterparty, (ii) inducing a Governmental Official to do or omit to do any act in violation of the Governmental Official’s lawful duty, or (iii) inducing a Governmental Official or a commercial counterparty to use his or her influence with a government or instrumentality to affect any act or decision of such government or entity; in each case in order to obtain, retain or direct business or to otherwise secure an improper advantage in violation of any applicable law or regulation or which would cause any holder to be in violation of any law or regulation applicable to such holder; and

(3)No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for any improper payments, including bribes, to any Governmental Official or commercial counterparty in order to obtain, retain or direct business or obtain any improper advantage. The Company has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that the Company and each Controlled Entity is and will continue to be in compliance with all applicable current and future Anti-Corruption Laws.

Section 5.28. Organization; Power and Authority.    The Notes are not of the same class as securities of the Company, if any, listed on a national securities exchange, registered under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system.

SECTION 6.    REPRESENTATIONS OF THE PURCHASERS.

Section 6.1. Purchase for Investment. Each Purchaser severally represents that it is purchasing the Notes for its own account or for one or more separate accounts maintained by such Purchaser or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of such Purchaser’s or their property shall at all times be within such Purchaser’s or their control. Each Purchaser understands that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes. Each Purchaser severally represents that it is an institutional accredited investor for the purposes of the Securities Act.

Section 6.2. Source of Funds. Each Purchaser severally represents that at least one of the following statements is an accurate representation as to each source of funds (a “Source”) to be used by such Purchaser to pay the purchase price of the Notes to be purchased by such Purchaser hereunder:

(a)the Source is an “insurance company general account” (as the term is defined in the United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the NAIC (the “NAIC Annual Statement”)) for the general account contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with such Purchaser’s state of domicile; or

(b)the Source is a separate account that is maintained solely in connection with such Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to any participant or beneficiary of such plan (including any

annuitant)) are not affected in any manner by the investment performance of the separate account; or

(c)the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90-1 or (ii) a bank collective investment fund, within the meaning of the PTE 91-38 and, except as disclosed by such Purchaser to the Company in writing pursuant to this clause (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or

(d)the Source constitutes assets of an “investment fund” (within the meaning of Part VI of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM Exemption), no employee benefit plan’s assets that are managed by the QPAM in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, represent more than 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM maintains an ownership interest in the Company that would cause the QPAM and the Company to be “related” within the meaning of Part VI(h) of the QPAM Exemption and (i) the identity of such QPAM and (ii) the names of any employee benefit plans whose assets in the investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization, represent 10% or more of the assets of such investment fund, have been disclosed to the Company in writing pursuant to this clause (d);or

(e)the Source constitutes assets of a “plan(s)” (within the meaning of Part IV(h) of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM” (within the meaning of Part IV(a) of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or controlled by the INHAM (applying the definition of “control” in Part IV(d)(3) of the INHAM Exemption) owns a 10% or more interest in the Company and (i) the identity of such INHAM and (ii) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Company in writing pursuant to this clause (e); or

(f) the Source is a governmental plan; or

(g)the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this clause (g); or

(h)the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA.

As used in this Section 6.2, the terms “employee benefit plan,” “governmental plan,” and “separate account” shall have the respective meanings assigned to such terms in section 3 of ERISA.

SECTION 7. GUARANTIES.

All Obligations of the Company to the holders of the Notes shall be Guaranteed jointly and severally by each Subsidiary of the Company (other than any Excluded Subsidiaries), as evidenced by and subject to the terms of guaranties in form and substance satisfactory to the holders of the Notes; provided that non-Wholly Owned Subsidiaries of the Company may be Limited Guarantors subject to compliance with Section 9.13(a)(i). To the extent that any Subsidiary is designated as an Excluded Subsidiary in accordance with the definition of Excluded Subsidiary or the release of a Subsidiary is otherwise approved by the Required Holders in accordance with Section 17.1, the holders of the Notes, promptly upon such designation or approval shall, at the Company’s cost and expense, execute and deliver a release of such Subsidiary from the Subsidiary Guaranty Agreement or the Limited Guaranty Agreement, as applicable.

SECTION 8. PAYMENT AND PREPAYMENT OF THE NOTES.

Section 8.1. Maturity. As provided therein, the entire unpaid principal balance of each Note shall be due and payable on the Maturity Date thereof.

Section 8.2. Optional Prepayments with Make-Whole Amount. The Company may, at its option, upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes, in an amount not less than $1,000,000 in the case of a partial prepayment, at 100% of the principal amount so prepaid, and the Make-Whole Amount determined for the prepayment date with respect to such principal amount. The Company will give each holder of Notes written notice of each optional prepayment under this Section 8.2 not less than ten days and not more than 60 days prior to the date fixed for such prepayment unless the Company and the Required Holders agree to another time period pursuant to Section 17. Each such notice shall specify such date (which shall be a Business Day), the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.3), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation. Two Business Days prior to such prepayment, the Company shall deliver to each holder of Notes a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount as of the specified prepayment date.

Section 8.3. Allocation of Partial Prepayments. In the case of each partial prepayment of the Notes pursuant to Section 8.2, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment.

Section 8.4. Maturity; Surrender, Etc. In the case of each optional prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment, together with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if any. From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue. Any Note paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.

Section 8.5. Purchase of Notes. The Company will not and will not permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except upon the payment or prepayment of the Notes in accordance with this Agreement and the Notes. The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment or prepayment of Notes pursuant to this Agreement and no Notes may be issued in substitution or exchange for any such Notes.

Section 8.6.    Make-Whole Amount.

“Make-Whole Amount” means, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal, provided that the Make-Whole Amount may in no event be less than zero. For the purposes of determining the Make-Whole Amount, the following terms have the following meanings:

“Called Principal” means, with respect to any Note, the principal of such Note that is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

“Discounted Value” means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal.

“Reinvestment Yield” means, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by the yield(s) reported as of 10:00 a.m. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PX1” (or such other display as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on-the-run U.S. Treasury securities (“Reported”) having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date. If there are no such U.S. Treasury securities Reported having a maturity equal to such Remaining Average Life, then such implied yield to maturity will be determined by (a) converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between the yields Reported for the applicable most recently issued actively traded on-the-run U.S. Treasury

securities with the maturities (1) closest to and greater than such Remaining Average Life and

(2)closest to and less than such Remaining Average Life. The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.

If such yields are not Reported or the yields Reported as of such time are not ascertainable (including by way of interpolation), then “Reinvestment Yield” means, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by the U.S. Treasury constant maturity yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for the U.S. Treasury constant maturity having a term equal to the Remaining Average Life of such Called Principal as of such Settlement Date. If there is no such U.S. Treasury constant maturity having a term equal to such Remaining Average Life, such implied yield to maturity will be determined by interpolating linearly between (1) the U.S. Treasury constant maturity so reported with the term closest to and greater than such Remaining Average Life and (2) the U.S. Treasury constant maturity so reported with the term closest to and less than such Remaining Average Life. The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.

“Remaining Average Life” means, with respect to any Called Principal, the number of years obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years, computed on the basis of a 360-day year composed of twelve 30-day months and calculated to two decimal places, that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.

“Remaining Scheduled Payments” means, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.4 or Section 12.1.

“Settlement Date” means, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

Section 8.7. Payments Due on Non-Business Days. Anything in this Agreement or the Notes to the contrary notwithstanding, (x) subject to clause (y), any payment of interest on any Note that is due on a date that is not a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day; and (y) any payment of principal of or Make- Whole Amount on any Note (including principal due on the Maturity Date of such Note) that is due on a date that is not a Business Day shall be made on the next succeeding Business Day and

shall include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.

SECTION 9.    AFFIRMATIVE COVENANTS.

So long as any of the Notes are outstanding, the Company shall, and shall (except in the case of the covenants set forth in Sections 9.1, 9.2, 9.3, 9.11 and 9.16) cause each Subsidiary to, unless otherwise consented to by the Required Holders:

Section 9.1. Financial Statements; Budget. Deliver the following to each holder of a Note, in form and detail satisfactory to the Required Holders:

(a)as soon as available, but in any event within 120 days after the end of each fiscal year of the Company, a consolidated and, if requested by the Required Holders, consolidating, balance sheet of the Company and its Subsidiaries as at the end of such fiscal year, and the related consolidated and consolidating statements of income or operations, retained earnings and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, and, in the case of such consolidated statements, audited and accompanied by a report and opinion of BDO USA, LLP or another independent certified public accountant reasonably acceptable to the Required Holders, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any qualification or exception and accompanied by a certificate of the chief executive officer, chief financial officer or chief accounting officer of the Company stating that no Event of Default was discovered or occurred during the examination of the Company;

(b)as soon as available, but in any event within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Company, a consolidated balance sheet of the Company and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated and consolidating statements of income or operations and retained earnings for such fiscal quarter and for the portion of the Company’s fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail and certified by a Responsible Officer of the Company as fairly presenting the financial condition, results of operations and shareholders’ equity of the Company and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes;

(c)as soon as available, but in any event not later than the last Business Day of each fiscal year of the Company, a budget of the Company and its Subsidiaries on a consolidated basis consisting of a consolidated statement of income, statement of cash flows and consolidated balance sheet for the upcoming fiscal year; and

(d)simultaneously with the delivery of each set of financial statements referred to in clauses (a) and (b) above, consolidating statements of income (or operations) and cash flow and consolidating balance sheets prepared by management of the Company

reflecting the assets, liabilities and results of operations of such non-Wholly Owned Subsidiaries.

Section 9.2.    Certificates; Other Information. Deliver to each holder of a Note each of the following, in form and detail satisfactory to the Required Holders:

(a)concurrently with the delivery of the financial statements referred to in Sections 9.1(a) and (b), a duly completed Compliance Certificate signed by a Responsible Officer of the Company;

(b)promptly after any request by any holder of a Note, copies of any audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of the Company by independent accountants in connection with the accounts or books of the Company or any Subsidiary, or any audit of any of them;

(c)promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of the Company, and copies of all annual, regular, periodic and special reports and registration statements which the Company may file or be required to file with the Securities and Exchange Commission under Section 13 or 15(d) of the Securities Exchange Act of 1934, and not otherwise required to be delivered to the holders of the Notes pursuant hereto; and

(d)promptly, such additional information regarding the business, financial or corporate affairs of the Company or any Subsidiary, or compliance with the terms of the Note Documents, as any holder of a Note may from time to time reasonably request.

Section 9.3.    Notices. Promptly notify each holder of a Note:

(a)of the existence of any Default;

(b)of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect, including (i) breach or non-performance of, or any default under, a Contractual Obligation of the Company or any Subsidiary; (ii) any dispute, litigation, investigation, proceeding or suspension between the Company or any Subsidiary and any Governmental Authority; or (iii) the commencement of, or any material development in, any litigation or proceeding affecting the Company or any Subsidiary, including pursuant to any applicable Environmental Laws;

(c) the occurrence of any ERISA Event; and

(d)of any material change in accounting policies or financial reporting practices by the Company or any Subsidiary.

Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer of the Company setting forth details of the occurrence referred to therein and stating

what action (if any) the Company has taken and proposes to take with respect thereto. Each notice pursuant to Section 9.3(a) shall describe with particularity any and all provisions of this Agreement and any other Note Document that have been breached.

Section 9.4. Payment of Obligations. Pay and discharge prior to delinquency all its obligations and liabilities, including (a) all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Company or such Subsidiary; (b) all lawful claims which, if unpaid, would by law become a Lien upon its property (other than Permitted Liens); and (c) all Material Indebtedness, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness.

Section 9.5. Preservation of Existence, Etc. (a) Preserve, renew and maintain in full force and effect its legal existence and good standing (or the local equivalent) under the laws of the jurisdiction of its organization, except (x) in a transaction permitted by Section 10.4 or 10.5 or (y) in the case of good standing (or the local equivalent), to the extent the failure to do so could not reasonably be expected to have a Material Adverse Effect; (b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) preserve or renew all of its registered patents, trademarks, trade names and service marks, if any, the non-preservation of which could reasonably be expected to have a Material Adverse Effect.

Section 9.6. Maintenance of Properties. (a) Maintain, preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted; (b) make all necessary repairs thereto and renewals and replacements thereof, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) use the standard of care typical in the industry in the operation and maintenance of its facilities.

Section 9.7. Maintenance of Insurance. Maintain with financially sound and reputable insurance companies not Affiliates of the Company, (or, in the case of real property, equipment or other personal property leased to others, cause its lessees to maintain) insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts (after giving effect to any self-insurance compatible with the following standards) as are customarily carried under similar circumstances by such other Persons.

Section 9.8. Compliance with Law. Comply in all material respects with the requirements of all Applicable Law (including, without limitation, as applicable, all Healthcare Laws), and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which (i) such requirement of law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (ii) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

Section 9.9.    Books and Records. (a) Maintain proper books of record and account, in

which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of the Company or such Subsidiary, as the case may be; and (b) maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the Company or such Subsidiary, as the case may be.

Section 9.10. Inspection Rights. Permit representatives and independent contractors of any holder of a Note to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at the expense of the Company and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Company; provided, however, that (i) when no Default exists, only one such inspection shall be done at the expense of the Company per calendar year, and (ii) when a Default exists any holder of a Note (or any of its representatives or independent contractors) may do any of the foregoing at the expense of the Company at any time during normal business hours, as often as may be desired, with reasonable advance notice to the Company.

Section 9.11. Use of Proceeds. Use the proceeds of the Notes (a) to refinance existing Indebtedness and (b) for general corporate purposes (including (i) working capital and (ii) other permitted Investments) not in contravention of Section 10.8, any law or any other provision of this Agreement or any other Note Document.

Section 9.12. Financial Covenants.

(a)Maximum Consolidated Total Leverage Ratio.Maintain at all times a Consolidated Total Leverage Ratio not greater than 0.50 to 1.00.

(b)Minimum Consolidated Fixed Charge Coverage Ratio.Maintain at all time, a Consolidated Fixed Charge Coverage Ratio of not less than 2.00 to 1.00.

(c)Minimum Consolidated Tangible Net Worth.Maintain at all times a Consolidated Tangible Net Worth of at least (i) $650,000,000 plus (ii) eighty-five percent (85%) of the net cash proceeds from any equity offering conducted on or after the Closing Date.

(d)Minimum Consolidated Unencumbered Fixed Asset Coverage Ratio.Maintain a Consolidated Unencumbered Fixed Asset Coverage Ratio at all times of not less than

1.67 to 1.00

Section 9.13. New Subsidiaries. As soon as practicable but in any event within 10 Business Days following, (i) in the case of clause (a) and (b), (A) the acquisition or creation of any Subsidiary (other than any Excluded Subsidiary) or (B) pursuant to the requirements of the definition of Excluded Subsidiary, any Subsidiary which was an Excluded Subsidiary no longer meeting the requirements of an Excluded Subsidiary and (ii) in the case of clause (c), the Required Holder’s therefor, cause to be delivered to the holders of the Notes each of the following:

(a)(i) with respect to any non-Wholly Owned Subsidiary, a Limited Guaranty Agreement or, if applicable, a Limited Guaranty Joinder Agreement or (ii) with respect to any Wholly Owned Subsidiary, a Subsidiary Guaranty Joinder Agreement, in each case executed and delivered by such Subsidiary;

(b)current copies of the Organization Documents of such Subsidiary and resolutions of the board of directors, or equivalent governing body, of such Subsidiary, together with such other documents and certificates as the Required Holders or their counsel may reasonably request relating to the organization, existence and good standing (or the local equivalent) of such Subsidiary, the authorization of the transactions contemplated by the Note Documents and any other legal matters relating to such Subsidiary, the Note Documents or the transactions contemplated thereby; and

(c)to the extent requested by the Required Holders, an opinion of counsel to such Subsidiary, addressed to the holders of the Notes, in form and substance reasonably acceptable to the Required Holders.

Section 9.14. Compliance with Agreements. Comply in all respects with each term, condition and provision of all leases, agreements and other instruments entered into in the conduct of its business including, without limitation, any Material Agreement, except to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect.

Section 9.15. Further Assurances. At the Company’s cost and expense, upon request of the Required Holders, duly execute and deliver or cause to be duly executed and delivered, to the holders the Notes such further instruments, documents and certificates, and do and cause to be done such further acts that may be reasonably necessary or advisable in the reasonable opinion of the Required Holders to carry out more effectively the provisions and purposes of this Agreement and the other Note Documents.

Section 9.16. Status.

(a)Maintain the Company’s status as a REIT such that (i) all of the representations and warranties set forth in clauses (a), (b) and (d) of Section 5.20 shall remain true and correct at all times and (ii) all of the representations and warranties set forth in clause (c) of Section 5.20 shall remain true and correct in all material respects.

(b)Do or cause to be done all things necessary to maintain the listing of the Company’s Equity Interest on the New York Stock Exchange, the American Stock Exchange or the Nasdaq National Market System (or any successor thereof).

Section 9.17. Covenant to Secure Notes. If the Company or any Subsidiary shall create or assume any Lien upon any of its property or assets, whether now owned or hereafter acquired, to secure the Indebtedness under any Material Credit Facility, the Company will make or cause to be made effective provision whereby the Notes (and any related guarantees) will be secured by such Lien equally and ratably with any and all Indebtedness thereby secured so long as any such Indebtedness shall be so secured.

Section 9.18. Most Favored Lender Status. If the Company or any Subsidiary enters into, assumes or otherwise becomes bound or obligated under any agreement creating, evidencing or governing any Material Credit Facility containing one or more Additional Covenants or Additional Defaults, or amends or otherwise modifies any agreement creating, evidencing or governing such Material Credit Facility to include any Additional Covenants or Additional Defaults, then the terms of this Agreement shall, without any further action on the part of the Company or any of the holders of the Notes, be deemed to be amended automatically to include each Additional Covenant and each Additional Default contained in such agreement. The Company further covenants to promptly execute and deliver at its expense (including the fees and expenses of counsel for the holders of the Notes) an amendment to this Agreement in form and substance satisfactory to the Required Holders evidencing the amendment of this Agreement to include such Additional Covenants and Additional Defaults, provided that the execution and delivery of such amendment shall not be a precondition to the effectiveness of such amendment as provided for in this Section 9.18, but shall merely be for the convenience of the parties hereto.

Section 9.19. Information Required by Rule 144A. The Company will, upon the request of the holder of any Note, provide such holder, and any qualified institutional buyer designated by such holder, such financial and other information as such holder may reasonably determine to be necessary in order to permit compliance with the information requirements of Rule 144A under the Securities Act in connection with the resale of Notes, except at such times as the Company is subject to and in compliance with the reporting requirements of section 13 or 15(d) of the Exchange Act. For the purpose of this Section 9.19, the term “qualified institutional buyer” shall have the meaning specified in Rule 144A under the Securities Act.

SECTION 10.    NEGATIVE COVENANTS.

So long as any of the Notes are outstanding, the Company shall not, nor shall it permit any Subsidiary to, directly or indirectly, without the consent of the Required Holders:

Section 10.1. Liens. Create, incur, assume or suffer to exist, any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following:(a) Liens in favor of the holders of the Notes or any collateral agent for such holders;

(b)Liens with respect to the payment of taxes, assessments or governmental charges in each case that are not yet due or that are being contested in good faith by appropriate proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained to the extent required by GAAP;

(c)Liens of landlords arising by statute and Liens of suppliers, mechanics, carriers, materialmen, warehousemen or workmen and other similar Liens, in each case

(i) imposed by law or arising in such Person’s Ordinary Course of Business, (ii) for amounts not yet due or that are being contested in good faith by appropriate proceedings, and (iii) with respect to which adequate reserves or other appropriate provisions are being maintained to the extent required by GAAP;

(d)deposits made in such Person’s Ordinary Course of Business in connection with workers’ compensation or unemployment insurance, or other types of social security benefits or to secure the performance of bids, tenders, sales, contracts (other than for the repayment of borrowed money) and surety, appeal, customs or performance bonds-entered into in such Person’s Ordinary Course of Business;

(e)encumbrances arising by reason of zoning restrictions, easements, licenses, reservations, covenants, rights-of-way, utility easements, building restrictions and other similar encumbrances on the use of real property not materially detracting from the value of such real property or not materially interfering with the ordinary conduct of the business conducted and proposed to be conducted at such real property;

(f)encumbrances arising under leases or subleases of real property that do not, in the aggregate, materially detract from the value of such real property or interfere with the ordinary conduct of the business conducted and proposed to be conducted at such real property;

(g)financing statements with respect to a lessor’s rights in and to personal property leased to such Person in such Person’s Ordinary Course of Business other than through a Capitalized Lease;

(h)judgment Liens in existence for less than 45 days after the entry thereof or with respect to which execution has been stayed or the payment of which is covered in full (subject to a customary deductible) by insurance maintained with nationally recognized insurance companies and which do not otherwise result in a Default;

(i)Liens consisting of rights of set-off of a customary nature or bankers’ liens on an amount of deposit, whether arising by contract or operation of law, incurred in such Person’s Ordinary Course of Business so long as such deposits are not intended as collateral for any obligation that constitutes Indebtedness;

(j) Liens securing Indebtedness permitted under Section 10.3(f); provided that

(i) such Liens shall be created substantially simultaneously with the acquisition, repair, improvement or lease, as applicable, of the related property, (ii) such Liens do not at any time encumber any property other than the property financed by such Indebtedness, (iii) the amount of Indebtedness secured thereby is not increased and (iv) the principal amount of Indebtedness secured by any such Lien shall at no time exceed one hundred percent (100%) of the original price for the purchase, repair improvement or lease amount (as applicable) of such property at the time of purchase, repair, improvement or lease (as applicable);

(k)Liens in existence on the Closing Date and described on Schedule 10.1, including Liens incurred in connection with the renewal, refinancing, extension and replacement of Indebtedness pursuant to Section 10.3(e) (solely to the extent that such Liens were in existence on the Closing Date and described on Schedule 10.1); provided that the scope of any such Lien shall not be increased, or otherwise expanded, to cover any

additional property or type of asset, as applicable, beyond that in existence on the Closing Date, except for products and proceeds of the foregoing; and

(l)other Liens not otherwise permitted under this Section 10.1 securing Indebtedness in an aggregate principal amount not to exceed, in the aggregate, after giving effect to any such Lien and any Indebtedness incurred in connection therewith, fifteen percent (15%) of the Aggregate Total Fixed Asset Value of the Company and its Subsidiaries (excluding amounts properly attributable to Minority Interests); provided that, after giving effect to any such Lien and any Indebtedness incurred in connection therewith, the Company shall be in compliance, on a Pro Forma Basis, with each financial covenant contained in Section 9.12 hereof; provided furtherthat, prior to the creation, assumption or suffering to exist of any such Lien and any Indebtedness incurred in connection therewith in an amount in excess of $25,000,000, the Company shall deliver to the each holder of a Note a certification, together with financial and other information in detail reasonably requested by the Required Holders, (A) demonstrating such compliance and (B) certifying that no Default will exist either immediately before or after giving effect to any such Lien and any Indebtedness incurred in connection therewith; provided furtherthat notwithstanding the foregoing, the Company shall not, and shall not permit any of its Subsidiaries to, secure pursuant to this clause (l) any Material Credit Facility unless and until the Notes (and any guaranty delivered in connection therewith) will concurrently be secured equally and ratably with any and all other obligations thereby secured, such security to be pursuant to documentation in form and substance reasonably satisfactory to the Required Holders, including without limitation, an intercreditor agreement and opinions of counsel to the Company and/or such Subsidiary, as the case may be, from counsel reasonably acceptable to the Required Holders.

Section 10.2. Investments. Make or permit to exist any Investments, except:

(a)Investments held by the Company or any Subsidiary in the form of cash equivalents, short-term marketable debt securities or, to the extent constituting Investments, Swap Contracts otherwise permitted or required by this Agreement;

(b)Investments of any Credit Party in any other Credit Party (other than a Non- Bickford Limited Guarantor);

(c)Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss;

(d) Guarantees permitted by Section 10.3;

(e) the Holiday Acquisition;

(f) Investments by the Company or any Subsidiary in any Health Care Facilities;

provided that, prior to and after giving effect to any such Investment and any

Indebtedness incurred in connection therewith, (i) no Default will exist and (ii) the Company shall be in compliance, on a Pro Forma Basis, with each financial covenant contained in Section 9.12 hereof; provided further that, prior to the consummation of any such Investment involving aggregate consideration with respect thereto in excess of

$25,000,000, the Company shall deliver to each holder of a Note a certification, together

with financial and other information in detail reasonably requested by the Required Holders, (A) certifying that no Default will exist and (B) demonstrating such compliance;

(g)any other Investment not otherwise permitted under this Section 10.2 (including, without limitation, Investments in (i) unimproved land holdings, (ii) mortgages, mezzanine loans and notes receivable, (iii) construction in progress, (iv) Excluded Subsidiaries and Non-Bickford Limited Guarantors, and (v) real property assets that are not medical office buildings, general office buildings, skilled nursing facilities, assisted living facilities, independent living facilities, continuing care retirement communities, mental health facilities, life science facilities, and hospitals) in an aggregate principal amount not to exceed, in the aggregate, after giving effect to any such Investment, twenty percent (20%) of the Aggregate Total Fixed Asset Value of the Company and its Subsidiaries (excluding amounts properly attributable to Minority Interests); provided that, after giving effect to any such Investment and any Indebtedness incurred in connection therewith, the Company shall be in compliance, on a Pro Forma Basis, with each financial covenant contained in Section 9.12 hereof; provided further that, prior to the consummation of any such Investment involving aggregate consideration with respect thereto in excess of $25,000,000, the Company shall deliver to each holder of a Note a certification, together with financial and other information in detail reasonably requested by the Required Holders, (A) demonstrating such compliance and

(B) certifying that no Default will exist either immediately before or after giving effect to the consummation of any such Investment; and

(h)in connection with a tax-deferred exchange under Section 1031 of the Code involving the sale or disposition of a Health Care Facility (a “1031 Transaction”), Investments by the Company or any Subsidiary consisting of a loan to a Person acting as an intermediary under Section 1031 of the Code and/or the subsequent Acquisition of the Equity Interests of such Person at the conclusion of a 1031 Transaction.

provided that (i) any Investment in the form of an intercompany loan or advance pursuant to this Section 10.2 in any non-Wholly Owned Subsidiary of the Company shall be evidenced by a promissory note and (ii) for purposes of determining the amount of any Investment outstanding for purposes of this Section 10.2, such amount shall be deemed to be the amount of such Investment when made, purchased or acquired (without adjustment for subsequent increases or decreases in the value of such Investment) less any amount realized in respect of such Investment upon the sale, collection or return of capital (not to exceed the original amount invested).

Section 10.3. Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:(a)    Indebtedness under the Note Documents;

(b)Guarantees of any Credit Party in respect of Indebtedness otherwise permitted hereunder of any other Credit Party (other than a Limited Guarantor);

(c)obligations (contingent or otherwise) of the Company or any Subsidiary existing or arising under any Swap Contract; provided that such obligations are (or were) entered into by such Person in the ordinary course of business for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Person, or changes in the value of securities issued by such Person and not for purposes of speculation or taking a “market view;”

(d)Indebtedness of any Credit Party (other than a Limited Guarantor) owing to any other Credit Party (which Indebtedness shall be evidenced by a promissory note and subordinated to the Obligations on terms satisfactory to the Required Holders to the extent required by the Required Holders);

(e)Indebtedness existing on the Closing Date and listed on Schedule 10.3, and the renewal, refinancing, extension and replacement (but not the increase in the aggregate principal amount) thereof;

(f)Indebtedness incurred in connection with Capitalized Leases and purchase money Indebtedness in an aggregate amount not to exceed $30,000,000 at any time outstanding;

(g) unsecured intercompany Indebtedness:

(i)owed by any Credit Party (other than a Non-Bickford Limited Guarantor) to another Credit Party; provided that any Indebtedness owed by any Credit Party (other than a Limited Guarantor) to a Limited Guarantor shall be subordinated to the Obligations in a manner reasonably satisfactory to the Required Holders;

(ii)owed by any Non-Bickford Limited Guarantor to another Non- Bickford Limited Guarantor;

(iii)owed by any Credit Party to any non-Wholly Owned Subsidiary of the Company that is not a Credit Party; provided that such Indebtedness shall be subordinated to the Obligations in a manner reasonably satisfactory to the Required Holders; and

(iv)owed by any non-Wholly Owned Subsidiary of the Company that is not a Credit Party to any other non-Wholly Owned Subsidiary of the Company that is not a Credit Party;

(h)Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or other similar instrument drawn against insufficient funds in the ordinary course of business; and

(i)other Indebtedness not otherwise permitted pursuant to this Section 10.3; provided that, after giving effect to any such Indebtedness, the Company shall be in compliance, on a Pro Forma Basis, with each financial covenant contained in Section

9.12 hereof; provided further that, prior to the creation, incurrence, assumption or suffering to exist of any such Indebtedness in excess of $25,000,000, the Company shall

deliver to each holder of a Note a certification, together with financial and other information in detail reasonably requested by the Required Holders, (A) demonstrating such compliance and (B) certifying that no Default will exist either immediately before or after giving effect to any such Indebtedness.

provided that any Indebtedness pursuant to this Section 10.3 of any non-Wholly Owned Subsidiary of the Company to any Credit Party shall be evidenced by a promissory note.

Section 10.4. Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into, another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except that:(a) so long as no Default or Event of Default exists or would result therefrom: any Subsidiary may merge with (i) the Company; provided that the Company

shall be the continuing or surviving Person, or (ii) any one or more other Subsidiaries; provided that (A) when any Wholly Owned Subsidiary is merging with another Subsidiary, the Wholly Owned Subsidiary shall be the continuing or surviving Person,

(B) when any Credit Party (other than a Limited Guarantor) is merging with another

Subsidiary, a Credit Party (other than a Limited Guarantor) shall be the continuing or surviving Person, (C) when any Limited Guarantor is merging with another Subsidiary, a Credit Party shall be the continuing or surviving Person and (D) any Excluded Subsidiary may merge with any other Excluded Subsidiary or Person that, after such merger, will be an Excluded Subsidiary;

(b)any Subsidiary may Dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to any Credit Party (other than a Limited Guarantor); provided that if the transferor in such a transaction is a Wholly Owned Subsidiary (other than in the case of any Excluded Subsidiary), then the transferee must also be a Wholly Owned Subsidiary; and

(c)the Company or any Subsidiary may merge with any Person in order to consummate any Acquisition or other Investment permitted hereby; provided (i) in the case of any merger involving the Company, the Company shall be the surviving Person and (ii) in any other case, a Wholly Owned Subsidiary or an Excluded Subsidiary shall be the surviving Person of such merger.

Section 10.5.    Dispositions. Make any Disposition or enter into any agreement to make any Disposition, except:

(a)Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in the ordinary course of business;

(b) Dispositions of inventory in the ordinary course of business;

(c)Dispositions of equipment or real property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property, or (ii) the proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement property;

(d)Dispositions of property by any Subsidiary to the Company or to a Wholly Owned Subsidiary; provided that if the transferor of such property is a Credit Party, the transferee thereof must be a Credit Party (other than a Limited Guarantor);

(e) Dispositions permitted by Section 10.4; and

(f)other Dispositions of assets not otherwise permitted by clauses (a) through (e), the result of which, after taking such Disposition into account, would not trigger a Default under any financial covenant contained in Section 9.12 hereof; provided, that, prior to the consummation of any Disposition involving aggregate consideration with respect to such Disposition in excess of $25,000,000, the Company shall deliver to each holder of a Note a certification, together with financial and other information in detail reasonably requested by the Required Holders to demonstrate, that no Default or Event of Default (whether under Section 9.12 or otherwise) will exist either immediately before or immediately after giving effect thereto; provided further, that any Disposition pursuant to clauses (a), (b), (c) and (f) shall be for fair market value.

Section 10.6. Change in Nature of Business. Engage in any material line of business substantially different from those lines of business conducted by the Company and its Subsidiaries on the date hereof and other lines of business incidental or reasonably related thereto.

Section 10.7. Transactions with Affiliates. Enter into any transaction of any kind with any Affiliate of the Company, whether or not in the ordinary course of business, other than on fair and reasonable terms substantially as favorable to the Company or such Subsidiary as would be obtainable by the Company or such Subsidiary at the time in a comparable arm’s length transaction with a Person other than an Affiliate; provided that the foregoing restriction shall not apply to transactions between or among Credit Parties (other than Limited Guarantors).

Section 10.8. Use of Proceeds; Margin Regulations.

(a)Use (nor shall the Company permit its or any of its Wholly Owned Subsidiaries’, directors, officers, employees to use) the proceeds of any Note (i) in payment to any Person in violation of any Anti-Corruption Laws, (ii) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Blocked Person, or in any country that is subject to U.S. Economic Sanctions, or (iii) in any manner that would result in the violation of any Anti-Money Laundering Laws or Anti-Corruption Laws applicable to any party hereto.

(b)Use the proceeds of any Note, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System) or to

extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose.

Section 10.9. Burdensome Agreements. Enter into any Contractual Obligation (other than this Agreement or any other Note Document) that:

(a)limits the ability (i) of any Subsidiary (other than an Excluded Subsidiary) to make Restricted Payments to the Company or any other Credit Party or to otherwise transfer property to any Credit Party (other than (x) restrictions on transfers of property encumbered by Permitted Liens in favor of the holders of the Indebtedness or other obligations secured thereby), and (y) restrictions contained in the Credit Agreement and any other instruments, agreements, documents and writings executed by a Loan Party (as defined in the Credit Agreement) in connection therewith so long as such prohibitions and restrictions are not more restrictive than those set forth in the Credit Agreement in effect on the date hereof), or (ii) of any Subsidiary (other than an Excluded Subsidiary) to Guarantee the Indebtedness of the Company pursuant to the Subsidiary Guaranty Agreement or the Limited Guaranty Agreement, as applicable; or

(b)prohibits or otherwise restricts the creation or assumption of any Lien upon the properties or assets of the Company or any Subsidiary (other than an Excluded Subsidiary), whether now owned or hereafter acquired, or requires the grant of any security for such obligation if security is given for some other obligation, except (i) pursuant to this Agreement and the other Note Documents, (ii) pursuant to any document or instrument governing Indebtedness incurred pursuant to Section 10.3(f) (provided that any such restriction contained therein relates only to the asset or assets financed thereby),

(iii) customary restrictions contained in the organizational documents of any Excluded Subsidiary, (iv) customary restrictions in connection with any Permitted Lien or any document or instrument governing any Permitted Lien (provided that any such restriction contained therein relates only to the asset or assets subject to such Permitted Lien) and

(v)restrictions and requirements contained in the Credit Agreement and any other instruments, agreements, documents and writings executed by a Loan Party (as defined in

the Credit Agreement) in connection with any of the foregoing so long as such restrictions and requirements are not more restrictive than those set forth in the Credit Agreement in effect on the date hereof.

Section 10.10. Dissolution, Etc. Wind up, liquidate or dissolve (voluntarily or involuntarily) or commence or suffer any proceedings seeking any such winding up, liquidation or dissolution, except (a) in connection with a merger or consolidation permitted pursuant to Section 10.4 or (b) that any Excluded Subsidiary may dissolve itself in accordance with Applicable Law.

Section 10.11. Sale and Leaseback Transactions (as Lessee). Enter into any arrangement, directly or indirectly, (as lessee) whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereinafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred

Section 10.12. Amendments of Certain Agreements.

(a)Amend, modify or waive any of its Organization Documents in a manner materially adverse to the holders of the Notes.

(b)Amend, modify or waive (or permit the modification or amendment of) any of the terms or provisions of the Master Lease that would adversely affect the rights or interests of the holders of the Notes.

Section 10.13. Restricted Payments. Make any Restricted Payment other than (a) Restricted Payments by any Credit Party to another Credit Party (other than Limited Guarantor),

(b) cash dividends necessary to qualify and maintain its qualification as a REIT and (c) so long as no Default or Event of Default exists or will exist after giving effect thereto on the date thereof and on a pro forma basis as if such Restricted Payment occurred on the last day of the most recently ended Four-Quarter Period, other cash dividends and cash distributions the result of which, after taking such Restricted Payment into account, would not trigger a Default under any financial covenant contained in Section 9.12 hereof.

Section 10.14. Accounting Change. Make any material change in accounting treatment or reporting practices, except as required by GAAP, or change the fiscal year of the Company or any Subsidiary, except to change the fiscal year of a Subsidiary to conform its fiscal year to that of the Company.

Section 10.15. Terrorism Sanctions Regulations. The Company will not and will not permit any Controlled Entity (a) to become (including by virtue of being owned or controlled by a Blocked Person), own or control a Blocked Person or any Person that is the target of sanctions imposed by the United Nations or by the European Union, or (b) directly or indirectly to have any investment in or engage in any dealing or transaction (including, without limitation, any investment, dealing or transaction involving the proceeds of the Notes) with any Person if such investment, dealing or transaction (i) would cause any holder to be in violation of any law or regulation applicable to such holder, or (ii) is prohibited by or subject to sanctions under any

U.S.Economic Sanctions, or (c) to engage, nor shall any Affiliate of either engage, in any activity that could subject such Person or any holder to sanctions under CISADA or any similar law or regulation with respect to Iran or any other country that is subject to U.S. Economic Sanctions.

SECTION 11. EVENTS OF DEFAULT.

An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:

(a)the Company defaults in the payment of any principal or Make-Whole Amount, if any, on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or

(b)the Company defaults in the payment of any interest on any Note for more than five days after the same becomes due and payable; or

(c)the Company shall fail to observe or perform any covenant or agreement contained in (i) Section 9.1 or 9.2, and such failure shall continue for a period of five (5) days from its occurrence or (ii) Section 9.3(a) or (b), 9.5, 9.11, 9.12, 9.13, 9.15, 9.16 or

Section 10.

(d)any default in the performance of or compliance with any obligation, agreement or other provision contained herein or in any other Note Document (other than those referred to in subsections (a) and (b) above), and with respect to any such default which by its nature can be cured, such default shall continue for a period of thirty (30) days from its occurrence.

(e)any financial statement or certificate furnished to any holder of a Note in connection with, or any representation or warranty made by or on behalf of the Company or any Subsidiary under this Agreement or any other Note Document shall prove to be incorrect, false or misleading in any material respect when furnished or made.

(f)the Company or any Subsidiary (whether as primary obligor or as guarantor or other surety) shall fail to pay any principal of or premium or interest on any Indebtedness (other than the Notes) of any one or more of the Company or any of its Subsidiaries in an aggregate principal amount exceeding $10,000,000 (whether singly or in the aggregate, “Material Indebtedness”) that is outstanding, when and as the same shall become due and payable (whether at scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument evidencing such Material Indebtedness; or any other event shall occur or condition shall exist under any agreement or instrument relating to such Material Indebtedness (or, with respect to any Swap Contract, any Swap Termination Value in excess of $10,000,000) and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or permit the acceleration of, the maturity of such Material Indebtedness; or any such Material Indebtedness shall be declared to be due and payable; or required to be prepaid or redeemed (other than by a regularly scheduled required payment or redemption), purchased or defeased, or any offer to prepay, redeem, purchase or defease such Material Indebtedness shall be required to be made, in each case prior to the stated maturity thereof.

(g) one or more judgments or orders for the payment of money in excess of

$10,000,000 in the aggregate (net of independent third-party insurance as to which the insurance carrier has been notified of the claim and does not dispute the coverage of such payment) shall be rendered against the Company or any Subsidiary, and either (i) enforcement proceedings shall have been commenced by any creditor upon any such judgment or order or (ii) there shall be a period of ten (10) consecutive days during which a stay of enforcement of any such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect.

(h)the Company or any Subsidiary shall (i) commence a voluntary case or other proceeding or file any petition seeking liquidation, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency or other similar law now or

hereafter in effect or seeking the appointment of a custodian, trustee, receiver, liquidator or other similar official of it or any substantial part of its property, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Section, (iii) apply for or consent to the appointment of a custodian, trustee, receiver, liquidator or other similar official for the Company or any Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, or (vi) take any action for the purpose of effecting any of the foregoing.

(i)an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Company or any Subsidiary or any such Person’s debts, or any substantial part of any such Person’s assets, under any federal, state or foreign bankruptcy, insolvency or other similar law now or hereafter in effect or (ii) the appointment of a custodian, trustee, receiver, liquidator or other similar official for the Company or any Subsidiary or for a substantial part of any such Person’s assets, and in any such case, such proceeding or petition shall remain undismissed for a period of sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered.

(j)the Company or any Subsidiary shall become unable to pay, shall admit in writing its inability to pay, or shall fail to pay, its debts as they become due.

(k) any Change of Control shall occur or exist.

(l)(i) any Material Agreement shall cease to be in full force and effect for any reason, (ii) any of the material rights of the Company or any of its Subsidiaries under any Material Agreement shall be terminated or suspended, (iii) the Company or any of its Subsidiaries shall receive notice under any Material Agreement of the occurrence of an event which, if not cured, could permit the termination of any Material Agreement, and such event is not cured and/or waived by the date specified in such notice as a deadline for such cure (as the same may be extended by the Person giving such notice), or, if the notice does not contain a deadline, within forty-five (45) days from the date of such notice (or such later date as may be specified by the Person giving such notice), (iv) any proceeding or action shall otherwise be taken or commenced to renounce, terminate or suspend any of the material rights of the Company or any of its Subsidiaries under any Material Agreement, or (v) any lease or leases under the Master Lease that accounted for 10% or more of gross revenues of the Company in the Four-Quarter Period most recently ended are terminated, expire or are otherwise no longer in effect.

(m)any provision of any Note Document shall for any reason cease to be valid and binding on, or enforceable against, any Credit Party, or any Credit Party shall so state in writing or seek to terminate its obligations thereunder.

(n)(i) an ERISA Event occurs with respect to a Pension Plan which has resulted or could reasonably be expected to result in liability of the Company under Title IV of ERISA to the Pension Plan or the PBGC in an aggregate amount in excess of

$10,000,000, or (ii) the Company or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of $10,000,000.

SECTION 12.    REMEDIES ON DEFAULT, ETC.

Section 12.1. Acceleration. (a) If an Event of Default with respect to the Company described in Section 11(h) or (i) has occurred, all the Notes then outstanding shall automatically become immediately due and payable.

(b)If any other Event of Default has occurred and is continuing, any holder or holders of more than 51% in principal amount of the Notes at the time outstanding may at any time at its or their option, by notice or notices to the Company, declare all the Notes then outstanding to be immediately due and payable.

(c)If any Event of Default described in Section 11(a) or (b) has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Company, declare all the Notes held by it or them to be immediately due and payable.

Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest thereon (including, but not limited to, interest accrued thereon at the Default Rate) and (y) the Make-Whole Amount determined in respect of such principal amount (to the full extent permitted by applicable law), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived. The Company acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided for) and that the provision for payment of a Make-Whole Amount by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.

Section 12.2. Other Remedies. If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note, Guaranty Agreement, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.

Section 12.3. Rescission. At any time after any Notes have been declared due and payable pursuant to Section 12.1(b) or (c), the holders of not less than 51% in principal amount of the Notes then outstanding, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Notes,

all principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) neither the Company nor any other Person shall have paid any amounts which have become due solely by reason of such declaration, (c) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 17, and (d) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes. No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.

Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies. No right, power or remedy conferred by this Agreement, any Guaranty Agreement or any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise. Without limiting the obligations of the Company under Section 15, the Company will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including, without limitation, reasonable attorneys’ fees, expenses and disbursements.

SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

Section 13.1. Registration of Notes. The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes. The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register. If any holder of one or more Notes is a nominee, then (a) the name and address of the beneficial owner of such Note or Notes shall also be registered in such register as an owner and holder thereof and (b) at any such beneficial owner’s option, either such beneficial owner or its nominee may execute any amendment, waiver or consent pursuant to this Agreement. Prior to due presentment for registration of transfer, the Person(s) in whose name any Note(s) shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary. The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes.

Section 13.2. Transfer and Exchange of Notes. Upon surrender of any Note to the Company at the address and to the attention of the designated officer (all as specified in Section 18(iii)), for registration of transfer or exchange (and in the case of a surrender for registration of transfer accompanied by a written instrument of transfer duly executed by the registered holder of such Note or such holder’s attorney duly authorized in writing and accompanied by the relevant name, address and other information for notices of each transferee of such Note or part thereof), within ten Business Days thereafter, the Company shall execute and deliver, at the Company’s expense (except as provided below), one or more new Notes (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to

the unpaid principal amount of the surrendered Note. Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of Schedule 1(a) or Schedule 1(b), as applicable. Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon. The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes. Notes shall not be transferred in denominations of less than

$100,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than $100,000. Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in Section 6.2.

Section 13.3. Replacement of Notes. Upon receipt by the Company at the address and to the attention of the designated officer (all as specified in Section 18(iii)) of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and

(a)in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser or another holder of a Note with a minimum net worth of at least

$100,000,000 or a Qualified Institutional Buyer, such Person’s own unsecured agreement of indemnity shall be deemed to be satisfactory), or

(b) in the case of mutilation, upon surrender and cancellation thereof,

within ten Business Days thereafter, the Company at its own expense shall execute and deliver, in lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

SECTION 14. PAYMENTS ON NOTES.

Section 14.1. Place of Payment. Subject to Section 14.2, payments of principal, Make- Whole Amount, if any, and interest becoming due and payable on the Notes shall be made in New York, New York at the principal office of JPMorgan Chase Bank, N.A. in such jurisdiction. The Company may at any time, by notice to each holder of a Note, change the place of payment of the Notes so long as such place of payment shall be either the principal office of the Company in such jurisdiction or the principal office of a bank or trust company in such jurisdiction.

Section 14.2. Home Office Payment. So long as any Purchaser or its nominee shall be the holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, Make- Whole Amount, if any, interest and all other amounts becoming due hereunder by the method and at the address specified for such purpose below such Purchaser’s name in Schedule B, or by such other method or at such other address as such Purchaser shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of

such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, such Purchaser shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Company pursuant to Section 14.1. Prior to any sale or other disposition of any Note held by a Purchaser or its nominee, such Purchaser will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 13.2. The Company will afford the benefits of this Section 14.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by a Purchaser under this Agreement and that has made the same agreement relating to such Note as the Purchasers have made in this Section 14.2.

SECTION 15. EXPENSES, INDEMNITY, ETC.

Section 15.1. Transaction Expenses. Whether or not the transactions contemplated hereby are consummated, the Company will pay all costs and expenses (including reasonable attorneys’ fees of a special counsel and, if reasonably required by the Required Holders, local or other counsel) incurred by the Purchasers and each other holder of a Note in connection with such transactions and in connection with any amendments, waivers or consents under or in respect of this Agreement, any Guaranty Agreement or the Notes (whether or not such amendment, waiver or consent becomes effective), including, without limitation: (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement, any Guaranty Agreement or the Notes or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement, any Guaranty Agreement or the Notes, or by reason of being a holder of any Note, (b) the costs and expenses, including financial advisors’ fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby and by the Notes and any Guaranty Agreement and (c) the costs and expenses incurred in connection with the initial filing of this Agreement and all related documents and financial information with the SVO provided, that such costs and expenses under this clause (c) shall not exceed $3,500. The Company will pay, and will save each Purchaser and each other holder of a Note harmless from, (i) all claims in respect of any fees, costs or expenses, if any, of brokers and finders (other than those, if any, retained by a Purchaser or other holder in connection with its purchase of the Notes) and (ii) any and all wire transfer fees that any bank deducts from any payment under such Note to such holder or otherwise charges to a holder of a Note with respect to a payment under such Note.

Section 15.2. Indemnification. The Company shall indemnify the holders of the Notes and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, and shall pay or reimburse any such Indemnitee for, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Company or any other Credit Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Note Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder

or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Note or the use or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Company or any of its Subsidiaries, or any Environmental Liability related in any way to the Company or any of its Subsidiaries, (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Company, any other Credit Party or any Subsidiary thereof, and regardless of whether any Indemnitee is a party thereto, or (v) any claim, investigation, litigation or other proceeding (whether or not the holders of the Notes are party thereto) and the prosecution and defense thereof, arising out of or in any way connected with the Notes, this Agreement, any other Note Document, or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby, including without limitation, reasonable attorneys and consultant’s fees; providedthat such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or

(y)result from a claim brought by the Company, any other Credit Party or any Subsidiary thereof against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Note Document, if the Company, such Credit Party or such Subsidiary has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.

Section 15.3. Survival. The obligations of the Company under this Section 15 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement, any Guaranty Agreement or the Notes, and the termination of this Agreement.

SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by any Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by the Company or any subsequent holder of a Note, as applicable, regardless of any investigation made at any time by or on behalf of such Person. All statements contained in any certificate or other instrument delivered by or on behalf of the Company pursuant to this Agreement shall be deemed representations and warranties of the Company under this Agreement. Subject to the preceding sentence, this Agreement, the Notes and each Guaranty Agreement embody the entire agreement and understanding between each Purchaser and the Company and supersede all prior agreements and understandings relating to the subject matter hereof.

SECTION 17. AMENDMENT AND WAIVER.

Section 17.1. Requirements. This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), only with the written consent of the Company and the Required Holders, except that:

(a)no amendment or waiver of any of Sections 1, 2, 3, 4, 5, 6, 7 or 21 hereof, or any defined term (as it is used therein), will be effective as to any Purchaser unless consented to by such Purchaser in writing;

(b)no amendment or waiver may, without the written consent of each Purchaser and the holder of each Note at the time outstanding, (i) subject to Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of (x) interest on the Notes or

(y) the Make-Whole Amount, (ii) change the percentage of the principal amount of the Notes the

holders of which are required to consent to any amendment or waiver, or (iii) amend any of Sections 8 (except as set forth in the second sentence of Section 8.2 and Section 17.1(c)), 11(a), 11(b), 12, 17 or 20; and

(c) Section 8.5 may be amended or waived to permit offers to purchase made by the Company or an Affiliate pro rata to the holders of all Notes at the time outstanding upon the same terms and conditions only with the written consent of the Company and the Super-Majority Holders.

Section 17.2. Solicitation of Holders of Notes. (a) Solicitation. The Company will provide each holder of a Note with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes or any Guaranty Agreement. The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to this Section 17 or any Guaranty Agreement to each holder of a Note promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes.

(b)Payment. The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security or provide other credit support, to any holder of a Note as consideration for or as an inducement to the entering into by such holder of any waiver or amendment of any of the terms and provisions hereof or of any Guaranty Agreement or any Note unless such remuneration is concurrently paid, or security is concurrently granted or other credit support concurrently provided, on the same terms, ratably to each holder of a Note even if such holder did not consent to such waiver or amendment.

(c)Consent in Contemplation of Transfer. Any consent given pursuant to this Section 17 or any Guaranty Agreement by a holder of a Note that has transferred or has agreed to transfer its Note to the Company, any Subsidiary or any Affiliate of the Company (either pursuant to a waiver under Section 17.1(c) or subsequent to Section 8.5 having been amended pursuant to Section 17.1(c)) in connection with such consent shall be void and of no force or effect except solely as to such holder, and any amendments effected or waivers granted or to be effected or granted that would not have been or would not be so effected or granted but for such consent (and the consents of all other holders of Notes that were acquired under the same or similar conditions) shall be void and of no force or effect except solely as to such holder.

Section 17.3. Binding Effect, etc. Any amendment or waiver consented to as provided

in this Section 17 or any Guaranty Agreement applies equally to all holders of Notes and is binding upon them and upon each future holder of any Note and upon the Company without regard to whether such Note has been marked to indicate such amendment or waiver. No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon. No course of dealing between the Company and any holder of a Note and no delay in exercising any rights hereunder or under any Note or Guaranty Agreement shall operate as a waiver of any rights of any holder of such Note.

Section 17.4. Notes Held by Company, Etc. Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement, any Guaranty Agreement or the Notes, or have directed the taking of any action provided herein or in any Guaranty Agreement or the Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall be deemed not to be outstanding.

SECTION 18. NOTICES.

Except to the extent otherwise provided in Section 9, all notices and communications provided for hereunder shall be in writing and sent (a) by telecopy if the sender on the same day sends a confirming copy of such notice by an internationally recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by an internationally recognized overnight delivery service (with charges prepaid). Any such notice must be sent:

(i)if to any Purchaser or its nominee, to such Purchaser or nominee at the address specified for such communications in Schedule B, or at such other address as such Purchaser or nominee shall have specified to the Company in writing,

(ii)if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Company in writing, or

(iii)if to the Company, to the Company at its address set forth at the beginning hereof to the attention of Roger Hopkins, or at such other address as the Company shall have specified to the holder of each Note in writing.

Notices under this Section 18 will be deemed given only when actually received.

SECTION 19. REPRODUCTION OF DOCUMENTS.

This Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by any Purchaser at the Closing (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to any Purchaser, may be reproduced by such Purchaser by any photographic, photostatic, electronic, digital, or other

similar process and such Purchaser may destroy any original document so reproduced. The Company agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by such Purchaser in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. This Section 19 shall not prohibit the Company or any other holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.

SECTION 20. CONFIDENTIAL INFORMATION.

For the purposes of this Section 20, “Confidential Information” means information delivered to any Purchaser by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified when received by such Purchaser as being confidential information of the Company or such Subsidiary, provided that such term does not include information that (a) was publicly known or otherwise known to such Purchaser prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by such Purchaser or any Person acting on such Purchaser’s behalf, (c) otherwise becomes known to such Purchaser other than through disclosure by the Company or any Subsidiary or (d) constitutes financial statements delivered to such Purchaser under Section 9.1 that are otherwise publicly available. Each Purchaser will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by such Purchaser in good faith to protect confidential information of third parties delivered to such Purchaser, provided that such Purchaser may deliver or disclose Confidential Information to

(i) its directors, officers, employees, agents, attorneys, trustees and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by its Notes and such parties are bound by an obligation of confidentiality with respect to the Confidential Information), (ii) its auditors, financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with this Section 20,

(iii) any other holder of any Note, (iv) any Institutional Investor to which it sells or offers to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing

prior to its receipt of such Confidential Information to be bound by this Section 20), (v) any Person from which it offers to purchase any Security of the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by this Section 20),

(vi) any federal or state regulatory authority having jurisdiction over such Purchaser, (vii) the NAIC or the SVO or, in each case, any similar organization, or any nationally recognized rating agency that requires access to information about such Purchaser’s investment portfolio, or (viii) any other Person to which such delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to such Purchaser, (x) in response to any subpoena or other legal process, (y) in connection with any litigation to which such Purchaser is a party or (z) if an Event of Default has occurred and is continuing, to the extent such Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under such Purchaser’s Notes, this Agreement or any Guaranty Agreement. Each holder of a Note, by its

acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement. On reasonable request by the Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Company embodying this Section 20.

In the event that as a condition to receiving access to information relating to the Company or its Subsidiaries in connection with the transactions contemplated by or otherwise pursuant to this Agreement, any Purchaser or holder of a Note is required to agree to a confidentiality undertaking (whether through IntraLinks, another secure website, a secure virtual workspace or otherwise) which is different from this Section 20, this Section 20 shall not be amended thereby and, as between such Purchaser or such holder and the Company, this Section 20 shall supersede any such other confidentiality undertaking.

SECTION 21. SUBSTITUTION OF PURCHASER.

Each Purchaser shall have the right to substitute any one of its Affiliates or another Purchaser or any one of such other Purchaser’s Affiliates (a “Substitute Purchaser”) as the purchaser of the Notes that it has agreed to purchase hereunder, by written notice to the Company, which notice shall be signed by both such Purchaser and such Substitute Purchaser, shall contain such Substitute Purchaser’s agreement to be bound by this Agreement and shall contain a confirmation by such Substitute Purchaser of the accuracy with respect to it of the representations set forth in Section 6. Upon receipt of such notice, any reference to such Purchaser in this Agreement (other than in this Section 21), shall be deemed to refer to such Substitute Purchaser in lieu of such original Purchaser. In the event that such Substitute Purchaser is so substituted as a Purchaser hereunder and such Substitute Purchaser thereafter transfers to such original Purchaser all of the Notes then held by such Substitute Purchaser, upon receipt by the Company of notice of such transfer, any reference to such Substitute Purchaser as a “Purchaser” in this Agreement (other than in this Section 21), shall no longer be deemed to refer to such Substitute Purchaser, but shall refer to such original Purchaser, and such original Purchaser shall again have all the rights of an original holder of the Notes under this Agreement.

SECTION 22. MISCELLANEOUS.

Section 22.1. Successors and Assigns. All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not.

Section 22.2. Accounting Terms. (a) Unless otherwise defined or specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared, in accordance with GAAP as in effect from time to time, applied on a basis consistent (except for such changes approved by the Required Holders in writing) with the Audited Financial Statements. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Note Document, and either the Company or the Required

Holders shall so request, the Required Holders and the Company shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Holders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Company shall provide to the holders of the Notes financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP. Without limiting the foregoing, leases shall continue to be classified and accounted for on a basis consistent with that reflected in the Audited Financial Statements for all purposes of this Agreement, notwithstanding any change in GAAP relating thereto, unless the parties hereto shall enter into a mutually acceptable amendment addressing such changes, as provided for above.

(b) For purposes of determining compliance with this Agreement (including, without limitation, Section 9, Section 10 and the definition of “Indebtedness”), any election by the Company to measure any financial liability using fair value (as permitted by Financial Accounting Standards Board Accounting Standards Codification Topic No. 825-10-25 – Fair Value Option, International Accounting Standard 39 – Financial Instruments: Recognition and Measurement or any similar accounting standard) shall be disregarded and such determination shall be made as if such election had not been made.

Section 22.3. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.

Section 22.4. Construction, etc. Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant. Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.

Section 22.5. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.

Section 22.6. Governing Law. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

Section 22.7. Jurisdiction and Process; Waiver of Jury Trial. (a) The Company irrevocably submits to the non-exclusive jurisdiction of any New York State or federal court

sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or relating to this Agreement or the Notes. To the fullest extent permitted by applicable law, the Company irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

(b)The Company consents to process being served by or on behalf of any holder of Notes in any suit, action or proceeding of the nature referred to in Section 22.7(a) by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, return receipt requested, to it at its address specified in Section 18 or at such other address of which such holder shall then have been notified pursuant to said Section. The Company agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it. Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.

(c)Nothing in this Section 22.7 shall affect the right of any holder of a Note to serve process in any manner permitted by law, or limit any right that the holders of any of the Notes may have to bring proceedings against the Company in the courts of any appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

(d)THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT, THE NOTES OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THEREWITH.

Section 22.8. Rules of Interpretation. (a) Unless the context requires otherwise or such term is otherwise defined herein, each term defined in Articles 1, 8 or 9 of the UCC shall have the meaning given therein.

(b)The headings, subheadings and table of contents used herein or in any other Note Document are solely for convenience of reference and shall not constitute a part of any such document or affect the meaning, construction or effect of any provision thereof.

(c)Except as otherwise expressly provided, references in any Note Document to articles, sections, paragraphs, clauses, annexes, appendices, exhibits and schedules are references to articles, sections, paragraphs, clauses, annexes, appendices, exhibits and schedules in or to such Note Document.

(d)All definitions set forth herein or in any other Note Document shall apply to the singular as well as the plural form of such defined term, and all references to the masculine gender shall include reference to the feminine or neuter gender, and vice versa, as the context may require.

(e)When used herein or in any other Note Document, words such as “hereunder”, “hereto”, “hereof” and “herein” and other words of like import shall, unless the context clearly indicates to the contrary, refer to the whole of the applicable document and not to any particular article, section, subsection, paragraph or clause thereof.

(f)References to “including” means including without limiting the generality of any description preceding such term, and such term shall not limit a general statement to matters similar to those specifically mentioned.

(g)Whenever interest rates or fees are established in whole or in part by reference to a numerical percentage expressed as “ %”, such arithmetic expression shall be interpreted in accordance with the convention that 1% = 100 basis points.

(h)Each of the parties to the Note Documents and their counsel have reviewed and revised, or requested (or had the opportunity to request) revisions to, the Note Documents, and any rule of construction that ambiguities are to be resolved against the drafting party shall be inapplicable in the construing and interpretation of the Note Documents and all exhibits, schedules and appendices thereto.

(i)Any definition of or reference to any agreement, instrument or other document (including any organizational document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Note Document).

(j)Any financial ratios required to be maintained by the Company pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

Section 22.9. Accounting for Derivatives. In making any computation or determining any amount pursuant to Section 9.12 by reference to any item appearing on the balance sheet or other financial statement of Company and its Subsidiaries, all adjustments to such computation or amount resulting from the application of FASB ASC Topic 815 shall be disregarded; provided that any realized gain or loss shall be included in such computations.

Section 22.10. Transaction References. The Company agrees that Prudential Capital Group may, with the prior written consent of the Company (not to be unreasonably withheld or delayed), (a) refer to its role in originating the purchase of the Notes from the Company, as well as the identity of the Company and the aggregate principal amount and issue date of the Notes, on its internet site or in marketing materials, press releases, published “tombstone” announcements or any other print or electronic medium and (b) display the Company’s corporate logo in conjunction with any such reference

*    *    *    *    *

If you are in agreement with the foregoing, please sign the form of agreement on a counterpat1 of this Agreement and return it to the Company, whereupon this Agreement shall become a binding agreement between you and the Company.

Very truly yours,

NATIONAL HEALTH INVESTORS, INC.

By: /s/J. Justin Hutchens

Name: J. Justin Hutchens

Title: President and Chief Executive Officer

This Agreement is hereby accepted and agreed to as of the date hereof.

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

By:    /s/Ashley Dexter

Vice President

FARMERS INSURANCE EXCHANGE

By:    Prudential Private Placement Investors,

L.P. (as Investment Advisor)

By: Prudential Private Placement Investors, Inc. (as its General Partner)

By: /s/Ashley Dexter

Vice President

MID CENTURY INSURANCE COMPANY

By:    Prudential Private Placement Investors,

L.P. (as Investment Advisor)

By:    Prudential Private Placement Investors, Inc. sits General Partner)

By: /s/Ashley Dexter

Vice President

[Signature Page to Note Purchase Agreement]

FARMERS NEW WORLD LIFE INSURANCE COMPANY

By:    Prudential Private Placement Investors,

L.P. (as Investment Advisor)

By: Prudential Private Placement Investors, Inc. (as its General Partner)

By: /s/Ashley Dexter

Vice President

PRUDENTIAL ANNUITIES LIFE ASSURANCE CORPORATION

By: Prudential Investment Management, Inc. as investment manager

By: /s/Ashley Dexter

Vice President

PICA HARTFORD LIFE & ANNUITY

COMFORT TRUST

By: The Prudential Insurance Company of America, as Grantor

By: /s/Ashley Dexter

Name: Ashley Dexter    

Title: Vice President

PRUCO LIFE INSURANCE COMPANY

By: /s/Ashley Dexter

Assistant Vice President

[Signature Page to Note Purchase Agreement]

THE PRUDENTIAL LIFE INSURANCE COMPANY, LTD.

By: Prudential Investment Management (Japan), Inc., as Investment Manager

By: Prudential Investment Management, Inc., as Sub-Adviser

By: /s/Ashley Dexter

Vice President

By: PRUDENTIAL RETIREMENT GUARANTEED COST BUSINESS TRUST

By: Prudential Investment Management, Inc., as investment manager

By: /s/Ashley Dexter

Vice President

THE INDEPENDENT ORDER OF FORESTERS

By:    Prudential Private Placement Investors,

L.P. (as Investment Advisor)

By: Prudential Private Placement Investors, Inc. as its General Partner)

By: /s/Ashley Dexter

Vice President

[Signature Page to Note Purchase Agreement]

THE GIBRALTAR LIFE INSURANCE CO., LTD.

By : Prudential Investment Managem ent Japan Co., Ltd., as Investment Manager

By: Prudential Investment Management, Inc., as Sub-Adviser

By: /s/Ashley Dexter

Vice President

[Signature Page to Note Purchase Agreement]

DEFINED TERMS

As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:

“Acquisition” means any acquisition (whether in a single transaction or series of related transactions) of (a) all or substantially all of the assets of any Person, or any material assets or material line of business (including any real property and related assets) (with “materiality” being determined by having a fair market value in excess of $10,000,000), whether through purchase, merger or otherwise; or (b) Equity Interests or Voting Power of a non-Subsidiary if, as a result of such transaction or transactions, such non-Subsidiary becomes a Subsidiary.

“Additional Covenant” means any affirmative or negative covenant or similar restriction applicable to the Company or any Subsidiary (regardless of whether such provision is labeled or otherwise characterized as a covenant) the subject matter of which either (i) is similar to that of any covenant in Sections 9 or 10 of this Agreement, or related definitions in paragraph 10 of this Agreement, but contains one or more percentages, amounts or formulas that is more restrictive than those set forth herein or more beneficial to the holder or holders of the Indebtedness created or evidenced by the document in which such covenant or similar restriction is contained (and such covenant or similar restriction shall be deemed an Additional Covenant only to the extent that it is more restrictive or more beneficial) or (ii) is different from the subject matter of any covenant in Section 9 or 10 of this Agreement, or related definitions in Schedule A of this Agreement.

“Additional Default” means any provision contained in any document or instrument creating or evidencing Indebtedness of the Company or any Subsidiary which permits the holder or holders of Indebtedness to accelerate (with the passage of time or giving of notice or both) the maturity thereof or otherwise requires the Company or any Subsidiary to purchase such Indebtedness prior to the stated maturity thereof and which either (i) is similar to any Default or Event of Default contained in Section 11 of this Agreement, or related definitions in Schedule A of this Agreement, but contains one or more percentages, amounts or formulas that is more restrictive or has a shorter grace period than those set forth herein or is more beneficial to the holders of such other Indebtedness (and such provision shall be deemed an Additional Default only to the extent that it is more restrictive, has a shorter grace period or is more beneficial) or

(ii) is different from the subject matter of any Default or Event of Default contained in Section

11 of this Agreement, or related definitions in Schedule A of this Agreement.

“Affiliate” means, at any time, and with respect to any Person, any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person, and, with respect to the Company, shall include any Person beneficially owning or holding, directly or indirectly, 10% or more of any class of voting or equity interests of the Company or any Subsidiary or any Person of which the Company and its Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly, 10% or more of any class of voting or equity interests. As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by

SCHEDULE A

(to Note Purchase Agreement)

contract or otherwise. Unless the context otherwise clearly requires, any reference to an “Affiliate” is a reference to an Affiliate of the Company.

“Aggregate Total Fixed Asset Value” means, as of any date of determination for the Company and its Subsidiaries calculated on a consolidated basis, without duplication, (a) the aggregate Total Lease Property Net Operating Income for all Lease Property owned by the Company and its Subsidiaries (but excluding all amounts properly attributable to Minority Interests) for the Four-Quarter Period ending on or immediately prior to such date of determination divided by (b) the applicable Capitalization Rate for such Lease Property.

“Aggregate Unencumbered Fixed Asset Value” means, as of any date of determination, without duplication, the sum of (a) the aggregate Unencumbered Fixed Asset Values of all Unencumbered Lease Properties owned by any Credit Party (other than a Limited Guarantor) as of such date of determination plus (b) the aggregate Joint Venture Unencumbered Fixed Asset Values of all Unencumbered Lease Properties owned by any Credit Party that is a non-Wholly Owned Subsidiary of the Company as of such date of determination minus (c) the aggregate value of the Resident Mortgage Liens as of such date of determination.

“Agreement” means this Agreement, including all Schedules attached to this Agreement, as it may be amended, restated, supplemented or otherwise modified from time to time.

“Anti-Corruption Laws” is defined in Section 5.27(d)(1).

“Anti-Money Laundering Laws” is defined in Section 5.27(c).

“Applicable Law” means, collectively, all applicable international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

“Audited Financial Statements” means the audited consolidated balance sheet of the Company and its Subsidiaries for the fiscal year ended December 31, 2013, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the Company and its Subsidiaries, including the notes thereto.

“Bickford Opco” means Bickford Master II, LLC, a Delaware limited liability company.

“Bickford Propco” means NHI-Bickford RE, LLC, a Delaware limited liability company.

“Bickford Limited Guarantors” means, collectively, Bickford Opco, Bickford Propco and their respective Subsidiaries that, in each case, are Limited Guarantors.

“Blocked Person” is defined in Section 5.27(a).

“Business Day” means (a) for the purposes of Section 8.6 only, any day other than a Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized to be closed, and (b) for the purposes of any other provision of this Agreement, any day other than a Saturday, a Sunday or a day on which commercial banks in New York, New York or Charlotte, North Carolina are required or authorized to be closed.

“Capitalization Rate” means (a) for properties and facilities other than those acquired in the Holiday Acquisition or the Senior Living Acquisition, (i) 10% for skilled nursing facilities,

(ii) 11% for hospitals and (iii) 8.25% for all properties other than skilled nursing facilities and hospitals and (b) 6.50% for properties and facilities acquired in the Holiday Acquisition or the Senior Living Acquisition.

“Capitalized Lease” means a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.

“Change of Control” means any event or series of events by which an event or series of events by which (a) any Person or group of Persons acting in concert or other group shall, as a result of a tender or exchange offer, open market purchases, privately negotiated purchases or otherwise, have become, after the date of this Agreement, the “beneficial owner” (within the meaning of such term under Rule 13d-3 under the Exchange Act) of Equity Interests of the Company representing Voting Power having the right to elect at least 35% of the members of the Governing Body of the Company; or (b) the Governing Body of the Company shall cease to consist of a majority of the individuals who constituted the Governing Body of the Company as of the date of this Agreement or who shall have become a member thereof subsequent to the date of this Agreement after having been nominated, or otherwise approved in writing, by at least a majority of individuals who constitute the Governing Body of the Company as of the date of this Agreement.

Act.

“CISADA” means the Comprehensive Iran Sanctions, Accountability and Divestment

“Closing” is defined in Section 3.

“Closing Date” means January 13, 2015.

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time.

“Company” means National Health Investors, Inc., a Maryland corporation or any successor that becomes such in the manner prescribed in Section 10.4.

“Compliance Certificate” means a certificate substantially in the form of Exhibit B or such other form as may be acceptable to the Required Holders.

“Confidential Information” is defined in Section 20.

“Consolidated EBITDA” means, for any period of determination for the Company and its Subsidiaries (other than any Excluded Subsidiaries) calculated on a consolidated basis, the sum of the following, without duplication, in accordance with GAAP: (a) Consolidated Net Income for such period plus (b) the sum of the following, without duplication, to the extent deducted in determining Consolidated Net Income for such period: (i) Consolidated Interest Expense for such period, (ii) income and franchise taxes accrued during such period, (iii) amortization, depreciation and other non-cash charges for such period (except to the extent that such non-cash charges are reserved for cash charges to be taken in any future period), (iv) extraordinary losses during such period (excluding losses from discontinued operations), (v) net losses from discontinued operations during such period and (vi) any non-recurring charges in connection with any Acquisition or Investment in an aggregate amount not to exceed $5,000,000 for such period less (c) the sum of the following, without duplication, to the extent added in determining Consolidated Net Income for such period (i) interest income on cash and cash equivalents during such period, (ii) any extraordinary gains during such period and (iii) net earnings from discontinued operations during such period. For the avoidance of doubt, Consolidated EBITDA shall exclude all amounts attributable to (x) Minority Interests and (y) Excluded Subsidiaries. For purposes of this Agreement, Consolidated EBITDA shall be adjusted on a Pro Forma Basis.

“Consolidated Fixed Charge Coverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated EBITDA as of such date of determination to (b) Consolidated Fixed Charges as of such date of determination.

“Consolidated Fixed Charges” means, as of any date of determination for the Company and its Subsidiaries calculated on a consolidated basis, the sum of (a) Consolidated Interest Expense for the Four-Quarter Period ending on or immediately prior to such date, plus (b) scheduled principal payments of Indebtedness for such Four-Quarter Period (excluding any “balloon” payment or final payment at maturity), plus (c) cash dividends and distributions on preferred stock, if any, for such Four-Quarter Period, in each case, as determined in accordance with GAAP.

“Consolidated Funded Debt” means, as of any date of determination for the Company and its Subsidiaries calculated on a consolidated basis, without duplication, (a) all of the Indebtedness, which is Indebtedness (i) for borrowed money or evidenced by bonds, debentures, notes or similar instruments, or upon which interest payments are customarily made, or (ii) in respect of any Capitalized Lease or the deferred purchase price of property, whether or not interest-bearing and whether or not, in accordance with GAAP, classified as a current liability or long-term Indebtedness at such date, and whether secured or unsecured, excluding, however, to the extent constituting Indebtedness, accounts payable, accrued expenses and similar current liabilities incurred in the Ordinary Course of Business.

“Consolidated Interest Expense” means, for any period of determination for the Company and its Subsidiaries (excluding any Excluded Subsidiaries) calculated on a consolidated basis, without duplication, an amount equal to the sum of the following: (a) all interest expense in respect of Indebtedness of the Company and its Subsidiaries deducted in determining Consolidated Net Income for such period, together with all interest capitalized or

deferred during such period and not deducted in determining Consolidated Net Income for such period, plus (b) all debt discount and expense amortized or required to be amortized in determination of Consolidated Net Income for such period. For the avoidance of doubt, Consolidated Interest Expense shall exclude all amounts attributable to (x) Minority Interests and

(y) Excluded Subsidiaries. For purposes of this Agreement, Consolidated Interest Expense shall

be adjusted on a Pro Forma Basis.

“Consolidated Net Income” means, for any period, the net income (or loss) of the Company and its Subsidiaries for such period, calculated on a consolidated basis, without duplication, in accordance with GAAP; provided that in calculating Consolidated Net Income of the Company and its Subsidiaries for any period, there shall be excluded (a) any gains or losses on the sale or other disposition of investments or fixed or capital assets, and any taxes on such excluded gains and any tax deductions or credits on account of any such excluded losses, (b) the proceeds of any life insurance policy, (c) net earnings and losses of any Subsidiary accrued prior to the date it became a Subsidiary, (d) net earnings and losses of any corporation, substantially all the assets of which have been acquired in any manner, realized by such other corporation prior to the date of such acquisition, (e) net earnings and losses of any corporation with which the Company or a Subsidiary shall have consolidated or which shall have merged into or with the Company or a Subsidiary realized by such other corporation prior to the date of such consolidation or merger, (f) net earnings of any business entity in which the Company or any Subsidiary has an ownership interest unless such net earnings shall have actually been received by the Company or such Subsidiary in the form of distributions in cash, certificates of deposit, cash equivalents, bankers’ acceptance or marketable securities, (g) earnings resulting from any reappraisal, revaluation or write-up of assets, (h) any deferred or other credit representing any excess of the equity in any Subsidiary at the date of acquisition thereof over the amount invested in such Subsidiary and (i) any gain arising from the acquisition of any securities of the Company or any Subsidiary.

“Consolidated Performing Mortgage Note Receivables” means, as of any date of determination for the Credit Parties (other than with respect to the Limited Guarantors) calculated on a consolidated basis, without duplication, receivables due on any promissory notes payable to the Credit Parties (other than the Limited Guarantors) that meet each of the following conditions: (a) such receivables are due from Persons that are not Affiliates of any Credit Party;

(b) such promissory notes are secured by real property and related personal property in favor of any Credit Party (other than a Limited Guarantor); (c) such receivables are not subject to any Lien; and (d) such receivables are not due from a Non-Performing Note. “Non-Performing Note” means, collectively, any promissory note payable to any Credit Party (other than a Limited Guarantor) with respect to which (a) the payment terms have been subject to modification and

(b) has been overdue for a period of ninety (90) days after the effective date of such modification.

“Consolidated Tangible Net Worth” means, as of any date of determination for the Company and its Subsidiaries calculated on a consolidated basis, without duplication, after eliminating all amounts properly attributable to Minority Interests, if any, in the stock and surplus of Subsidiaries, (a) the total assets of the Company and its Subsidiaries that would be reflected on the Company’s consolidated balance sheet as of such date prepared in accordance

with GAAP, minus (b) the sum of (i) the total liabilities of the Company and its Subsidiaries that would be reflected on the Company’s consolidated balance sheet as of such date prepared in accordance with GAAP, and (ii) the net book value of all assets of the Company and its Subsidiaries that would be classified as intangible assets on a consolidated balance sheet of the Company and its Subsidiaries as of such date prepared in accordance with GAAP.

“Consolidated Total Debt” means, as of any date of determination for the Credit Parties calculated on a consolidated basis, without duplication, all Indebtedness of the Credit Parties that would be reflected on a consolidated balance sheet of the Credit Parties prepared in accordance with GAAP as of such date.

“Consolidated Total Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Funded Debt as of such date of determination to (b) Aggregate Total Fixed Asset Value as of such date of determination.

“Consolidated Unencumbered Fixed Asset Coverage Ratio” means, as of any date of determination, the ratio of (a) the sum of (i) Aggregate Unencumbered Fixed Asset Value as of such date of determination and (ii) the aggregate amount of all Consolidated Performing Mortgage Note Receivables as of such date of determination (not to exceed $40 million as of any date of determination) to (b) the aggregate amount of unsecured Consolidated Total Debt as of such date of determination.

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

“Controlled Entity” means (i) any of the Subsidiaries of the Company and any of their or the Company’s respective Controlled Affiliates and (ii) if the Company has a parent company, such parent company and its Controlled Affiliates. As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“Credit Agreement” means that certain Third Amended and Restated Credit Agreement, dated as of March 27, 2014, by and among the Company, each lender from time to time party thereto and Wells Fargo Bank, National Association, as amended, restated, supplemented or otherwise modified from time to time.

“Credit Parties” means the Company, the Subsidiary Guarantors and the Limited Guarantors, collectively.

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect.

“Default” means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.

“Default Rate” means that rate of interest that is the greater of (i) 2.00% per annum above the rate of interest stated in clause (a) of the first paragraph of the Notes or (ii) 2.00% over the rate of interest publicly announced by JPMorgan Chase Bank, N.A. in New York, New York as its “base” or “prime” rate.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

“Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Company, any other Credit Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Company within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) the withdrawal of the Company or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Company or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Section 4041 or 4041A of ERISA; (e) the institution by the PBGC of proceedings to terminate a Pension Plan; (f) any event or condition which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan of the Company or any ERISA Affiliate; (g) the determination that any Pension Plan is considered an at-risk plan or a plan in endangered or critical status within the meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA; or (h) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Company or any ERISA Affiliate.

“Excluded Subsidiaries” means, collectively, (a) any Subsidiary from time to time formed or acquired by the Company or any Subsidiary that is designated by the Company by written notice to the holders of the Notes as an Excluded Subsidiary within five (5) days following such formation or acquisition, and (b) any Subsidiary that is designated as an Excluded Subsidiary by written notice to the holders of the Notes and released from the requirement to Guarantee the Obligations pursuant to Section 7 of this Agreement; provided, that (i) in no event shall the portion of the Aggregate Total Fixed Asset Value attributable to any Excluded Subsidiary at any time equal or exceed 15% of the Aggregate Total Fixed Asset Value of the Company and its Subsidiaries (in each case, excluding all amounts properly attributable to Minority Interests), calculated as of the end of the most recent fiscal period end for which financial statements are available, (ii) in no event shall the portion of the Aggregate Total Fixed Asset Value attributable to all Excluded Subsidiaries, in the aggregate, at any time equal or exceed 20% of the Aggregate Total Fixed Asset Value of the Company and its Subsidiaries (in each case, excluding all amounts properly attributable to Minority Interests), calculated as of the end of the most recent fiscal period end for which financial statements are available, (iii) in no event shall any Excluded Subsidiary provide a Guarantee of any Indebtedness of the Company or any other Subsidiary of the Company (other than an Excluded Subsidiary) nor shall the Company or any Subsidiary (other than an Excluded Subsidiary) provide any Guarantee of the Indebtedness of an Excluded Subsidiary, (iv) the Company may from time to time remove any Subsidiary from the definition of “Excluded Subsidiary” by delivery of written notice of such removal to the holders of the Notes and delivery of the documentation required by Section 9.13 (as if such Excluded Subsidiary were formed or acquired on the date of the delivery such notice), and (v) no Subsidiary that has been designated as an Excluded Subsidiary and then removed from such definition pursuant to clause (iv) shall be subsequently re-designated as an Excluded Subsidiary.

“Event of Default” is defined in Section 11.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Four-Quarter Period” means a period of four full consecutive fiscal quarters of the Company, taken together as one accounting period.

“GAAP” means generally accepted principles of accounting in effect from time to time in the United States applied in a manner consistent with those used in preparing such financial statements as have heretofore been furnished to holders of the Notes by the applicable Person (to the extent heretofore furnished).

“Governing Body” means the board of directors of a Person (or any Person or group of Persons exercising similar authority).

“Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

“Governmental Official” means any governmental official or employee, employee of any government-owned or government-controlled entity, political party, any official of a political party, candidate for political office, official of any public international organization or anyone else acting in an official capacity.

“Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

“Guaranty Agreement” means, collectively, any Subsidiary Guaranty Agreement and any Limited Guaranty Agreement.

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

“Health Care Facilities” means (a) a health care facility offering health care-related products and services, including, without limitation, any acute care hospital, rehabilitation hospital, nursing facility, assisted living facility, independent care living facility, retirement center, long-term care facility, out-patient diagnostic facility or medical office building, life science research and development facility or office and any related or ancillary facility, service or product or (b) housing intended to be occupied primarily by persons over the age of 55 and related or ancillary facilities, services or products.

“Healthcare Laws” means all applicable statutes, laws, ordinances, rules and regulations of any Governmental Authority with respect to regulatory matters primarily relating to patient healthcare, including without limitation Section 1128B(b) of the Social Security Act, as amended, 42 U.S.C. Section 1320a 7(b) (Criminal Penalties Involving Medicare or State Health Care Programs), commonly referred to as the “Federal Anti-Kickback Statute,” and the Social Security Act, as amended, Section 1877, 42 U.S.C. Section 1395nn (Prohibition Against Certain Referrals), commonly referred to as “Stark Statute.”

“holder” means, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Company pursuant to Section 13.1, provided, however, that if such Person is a nominee, then for the purposes of Sections 7, 12, 17.2 and 18 and any related definitions in this Schedule B, “holder” shall mean the beneficial owner of such Note whose name and address appears in such register.

“Holiday Acquisition” means the acquisition of the Holiday Business by the Holiday NHI Purchaser and the other transactions related to such acquisition in accordance with the Holiday Acquisition Agreement and the other Holiday Acquisition Documents.

“Holiday Acquisition Agreement” means the Purchase Agreement dated as of November 18, 2013 between Holiday NHI Purchaser and the Holiday Seller.

“Holiday Acquisition Documents” means the Holiday Acquisition Agreement, the Holiday Master Lease, the Holiday Master Lease Guaranty Agreement and each other material document, instrument, certificate and agreement (together with all exhibits, schedules and other attachments thereto) executed or delivered in connection with the Holiday Acquisition Agreement.

“Holiday Business” means (a) all the land, buildings, furniture, fixtures and equipment used to operate certain independent living facilities from the Holiday Seller and (b) and the equity interests of the Holiday Subsidiaries.

“Holiday Master Lease” means the Master Lease dated as of December 23, 2013 between the Holiday NHI Purchaser, Myrtle Beach Retirement Residence LLC and Voorhees Retirement Residence LLC, as landlords, and NH Master Tenant, LLC, as tenant.

“Holiday Master Lease Guarantor” means Holiday AL Holdings LP, a Delaware limited partnership.

“Holiday Master Lease Guaranty Agreement” means the Guaranty of Lease dated as of December 23, 2013 executed by the Holiday Master Lease Guarantor in favor of the Holiday NHI Purchaser and Myrtle Beach Retirement Residence LLC and Voorhees Retirement Residence LLC.

“Holiday NHI Purchaser” means NHI-REIT of Next House, LLC, a Delaware limited liability company.

“Holiday Seller” means certain subsidiaries of Holiday Acquisition Holdings LLC, a Delaware limited liability company, party to the Holiday Acquisition Agreement.

“Holiday Subsidiaries” means Myrtle Beach Retirement Residence LLC and Voorhees Retirement Residence LLC.

“Indebtedness” means, with respect to any Person, the following, without duplication:

(a) all obligations of such Person for borrowed money; (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, or upon which interest payments are customarily made; (c) all indebtedness Guaranteed, directly or indirectly, in any manner, or endorsed (other than for collection or deposit in the Ordinary Course of Business) or discounted with recourse; (d) all indebtedness in effect Guaranteed, directly or indirectly, by such Person;

(e) all indebtedness secured by (or which the holder of such indebtedness has a right, contingent or otherwise, to be secured by) any Lien upon property owned or acquired subject thereto,

whether or not the liabilities secured thereby have been assumed; (f) all indebtedness under (x) any Capitalized Lease or (y) incurred as the lessee of goods or services under leases that, in accordance with GAAP, should be reflected on the lessee’s balance sheet; (g) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (h) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances and (i) all net obligations of such Person under any Swap Contracts. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. Subject to Section 22.9, the amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date.

“INHAM Exemption” is defined in Section 6.2(e).

“Institutional Investor” means (a) any Purchaser of a Note, (b) any holder of a Note holding (together with one or more of its affiliates) more than 5% of the aggregate principal amount of the Notes then outstanding, (c) any bank, trust company, savings and loan association

or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form, and (d) any Related Fund of any holder of any Note.

“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of any Equity Interest or other ownership or profit interest, warrants, rights, options, obligations or other securities of another Person (excluding any interests or other securities included in clause (b) of this definition), (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person, or (c) any Acquisition. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

“Joint Venture Unencumbered Fixed Asset Value” means, with respect to each Unencumbered Lease Property owned by any Credit Party that is a non-Wholly Owned Subsidiary of the Company as of any date of determination, without duplication, the result of (a)

(i) the Unencumbered Lease Property Net Operating Income for the Four-Quarter Period ending

on or immediately prior to such date of determination for such Unencumbered Lease Property divided by (ii) the applicable Capitalization Rate for such Unencumbered Lease Property multiplied by (b) the percentage of Equity Interests in such non-Wholly Owned Subsidiary owned by the Company or any of its Wholly Owned Subsidiaries as of such date of determination.

“Lease Property” means each Real Property that satisfies all of the following requirements: (a) such Real Property is owned in fee simple solely by the Company or any of its Subsidiaries, (b) such Real Property is leased to another Person solely by the Company or any of its Subsidiaries, as lessor, pursuant to a long-term lease that is subject to customary market terms and conditions at the time such lease is executed; and (c) such Real Property has been designated by the Company as a “Lease Property” on Schedule 5.21(a) or on a Compliance Certificate delivered by the Company to the holders of the Notes pursuant to Section 9.2.

“Lease Property Expenses” means, with respect to the Company and its Subsidiaries, the cost (including, but not limited to, payroll, taxes, assessments, insurance, utilities, landscaping and other similar charges) of operating and maintaining any Lease Property of the Company or any of its Subsidiaries that are the responsibility of such Person and not paid directly by the tenant of such property, but excluding depreciation, amortization, interest costs and maintenance capital expenditures to the extent such property is under a triple-net lease. For purposes of this Agreement, Lease Property Expenses shall be adjusted on a Pro Forma Basis.

“Lease Property Income” means, for any period of determination with respect to the Company and its Subsidiaries calculated on a consolidated basis, without duplication, the cash rents (excluding, as an abundance of caution, non-cash straight-line rent) and other cash revenues received by the Company or any of its Subsidiaries in the ordinary course of business attributable to any Lease Property of such Person, but excluding (a) security deposits and prepaid rent except to the extent applied in satisfaction of any tenant’s obligations for rent and (b) rent or other cash

revenues received by the Company or any of its Subsidiaries from any tenant that is the subject of a proceeding under any Debtor Relief Law; provided that, for purposes of determining Lease Property Income for any period of determination that includes the fiscal quarter during which any Subsidiary is formed or acquired and for each of the three (3) fiscal quarters thereafter, the determination of the amount of cash rents and other cash revenues attributable to any Lease Property of such Subsidiary shall be deemed to be the amount of:

(i)for the four fiscal quarter period ending during the fiscal quarter during which such Subsidiary is formed or acquired, contract rents and revenues attributable to any Lease Property of such Subsidiary times four (4);

(ii)for the four consecutive fiscal quarter period ending the first fiscal quarter following the fiscal quarter during which such Subsidiary is formed or acquired, the amount of cash rents and other cash revenues attributable to any Lease Property of such Subsidiary for such fiscal quarter times four (4);

(iii)for the four consecutive fiscal quarter period ending the second fiscal quarter following the fiscal quarter during which such Subsidiary is formed or acquired, the amount of cash rents and other cash revenues attributable to any Lease Property of such Subsidiary for the preceding two consecutive fiscal quarters times two (2); and

(iv)for the four consecutive fiscal quarter period ending the third fiscal quarter following the fiscal quarter during which such Subsidiary is formed or acquired, the amount of cash rents and other revenues attributable to any Lease Property of such Subsidiary for the preceding three consecutive fiscal quarters times four-thirds (4/3).

For purposes of this Agreement, Lease Property Income shall be adjusted on a Pro Forma Basis.

“Lien” means any mortgage, pledge, encumbrance, charge, security interest, lien, assignment or other preferential arrangement of any nature whatsoever, including any conditional sale agreement or other title retention agreement.

“Limited Guarantors” means, collectively or individually as the context may indicate, each non-Wholly Owned Subsidiary identified on Schedule A(1), and any other non-Wholly Owned Subsidiary who may from time to time become party to a Limited Guaranty Agreement.

“Limited Guaranty Agreement” means any Limited Guaranty Agreement (in form and substance reasonably acceptable to the Required Holders) made by each Limited Guarantor in favor of the holders of the Notes, as amended, restated, supplemented or otherwise modified from time to time.

“Limited Guaranty Joinder Agreement” means each Limited Guaranty Joinder Agreement, substantially in the form thereof attached to a Limited Guaranty Agreement, executed and delivered by a non-Wholly Owned Subsidiary of the Company to the holders of the Notes pursuant to Section 9.13.

“Make-Whole Amount” is defined in Section 8.6.

“Master Lease” means that certain Master Agreement Lease dated as of October 17, 1991 between the Company and National HealthCare Corporation (as amended), which, as of the date hereof, currently expires December 31, 2021 (excluding 3 additional 5-year renewal options).

“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, liabilities (actual and contingent), or condition (financial or otherwise) of the Company and the other Credit Parties taken as a whole; (b) a material impairment of the ability of any Credit Party to perform its obligations under any Note Document to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Credit Party of any Note Document to which it is a party.

“Material Agreement” means the Master Lease and any other contract or agreement to which any Credit Party is a party, by which any Credit Party or its properties are bound, or to which any Credit Party is subject and which contract or agreement, if on account of any breach or termination thereof, could reasonably be expected to result in a Material Adverse Effect.

“Material Credit Facility” means, as to the Company and its Subsidiaries, (a) the Credit Agreement, including any renewals, extensions, amendments, supplements, restatements, replacements or refinancing thereof; and (b) any other agreement(s) creating, evidencing or governing Indebtedness in an aggregate principal amount of $50,000,000 or more incurred after the Closing Date by the Company or any of its Subsidiaries pursuant to Section 10.3(b) or Section 10.3(i) (but excluding Indebtedness incurred after the Closing Date owed to the U.S. Department of Housing and Urban Development or Fannie Mae of a type similar to the Indebtedness listed as items 1, 5, 6, 7, 8, 9, 10, 11, 12, 13 and 14 on Schedule 10.3).

“Material Indebtedness” has the meaning set forth in Section 11.1(f).

“Maturity Date” is defined in the first paragraph of each Note.

“Minority Interests” means any Equity Interest of any class of a Subsidiary (other than directors’ qualifying shares as required by law) that are not owned by the Company and/or one or more of their Subsidiaries. Minority Interests shall be valued by valuing Minority Interests constituting Preferred Stock at the voluntary or involuntary liquidation value of such Preferred Stock, whichever is greater, and by valuing Minority Interests constituting common stock at the book value of capital and surplus applicable thereto adjusted, if necessary, to reflect any changes from the book value of such common stock required by the foregoing method of valuing Minority Interests in Preferred Stock.

“Multiple Employer Plan” means a Plan which has two (2) or more contributing sponsors (including the Company or any ERISA Affiliate) at least two (2) of whom are not under common control, as such a plan is described in Section 4064 of ERISA.

“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five (5) plan years, has made or been obligated to make contributions.

“NAIC” means the National Association of Insurance Commissioners or any successor thereto.

“Non-Bickford Limited Guarantors” means, collectively, any Limited Guarantor that is not a Bickford Limited Guarantor.

“Note Documents” means, collectively, this Agreement, each Note, each Subsidiary Guaranty Agreement, each Limited Guaranty Agreement, and any and all other instruments, agreements, documents and writings executed by a Credit Party in connection with any of the foregoing.

“Notes” is defined in Section 1.

“Obligations” means all amounts owing by any Credit Party to the holders of the Notes pursuant to or in connection with this Agreement or any other Note Document or otherwise with respect to any Note, including without limitation, all principal, interest (including any interest accruing after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization or like proceeding relating to any Credit Party, whether or not a claim for post- filing or post-petition interest is allowed in such proceeding), all reimbursement obligations, fees, expenses, indemnification and reimbursement payments, costs and expenses (including all fees and expenses of counsel to the holders of the Notes incurred pursuant to this Agreement or any other Note Document), whether direct or indirect, absolute or contingent, liquidated or unliquidated, now existing or hereafter arising hereunder or thereunder, together with all renewals, extensions, modifications or refinancings thereof.

“OFAC” is defined in Section 5.27(a).

“OFAC Listed Person” is defined in Section 5.27(a).

“OFAC Sanctions Program” means any economic or trade sanction that OFAC is responsible for administering and enforcing. A list of OFAC Sanctions Programs may be found at http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx.

“Officer’s Certificate” means a certificate of a Senior Financial Officer or of any other officer of the Company whose responsibilities extend to the subject matter of such certificate.

“Ordinary Course of Business” means an action taken by a Person only if such action is consistent with the past practices of such Person and is taken in the ordinary course of the normal operations of such Person.

“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents

with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Act” means the Pension Protection Act of 2006, as amended from time to time.

“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum required contributions (including any installment payment thereof) to Pension Plans and set forth in, with respect to plan years ending prior to the effective date of the Pension Act, Section 412 of the Code and Section 302 of ERISA, each as in effect prior to the Pension Act and, thereafter, Section 412, 430, 431 and 432 of the Code and Sections 302, 303, 304 and 305 of ERISA.

“Pension Plan” means any employee pension benefit plan (including a Multiple Employer Plan or a Multiemployer Plan) that is covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code and is maintained or is contributed to by the Company and any ERISA Affiliate.

“Permitted Liens” means any Lien permitted under Section 10.1.

“Person” means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization, business entity or Governmental Authority.

“Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA (including a Pension Plan), maintained for employees of the Company or any ERISA Affiliate or any such Plan to which the Company or any ERISA Affiliate is required to contribute on behalf of any of its employees.

“Preferred Stock” shall mean, in respect of any corporation or other legal entity, shares of the capital stock of such corporation or comparable interests in such other legal entity that are entitled to preference or priority over any other shares of the capital stock of such corporation or other equity interests in such other legal entity in respect of payment of dividends or distributions upon liquidation or otherwise.

“Pro Forma Basis” means, for purposes of calculating Consolidated EBITDA, Consolidated Interest Expense, Lease Property Expenses, Lease Property Income and Unencumbered Lease Property Income for any period during which one or more Specified Transactions occurs, that such Specified Transaction (and all other Specified Transactions that have been consummated during the applicable period) shall be deemed to have occurred as of the first day of the applicable period of measurement and all income statement items (whether positive or negative) attributable to the Property or Person disposed of in a Specified Disposition shall be excluded and all income statement items (whether positive or negative) attributable to

the Property or Person acquired in a Specified Acquisition permitted hereunder shall be included (provided that such income statement items to be included are reflected in financial statements or other financial data reasonably acceptable to the Required Holders and based upon reasonable assumptions and calculations which are expected to have a continuous impact); provided that the foregoing costs, expenses and adjustments shall be without duplication of any costs, expenses or adjustments that are already included in the calculation of Consolidated EBITDA, Consolidated Interest Expense, Lease Property Expenses, Lease Property Income and Unencumbered Lease Property Income.

“property” or “properties” means, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, choate or inchoate.

“PTE” is defined in Section 6.2(a).

“Purchaser” or “Purchasers” means each of the purchasers that has executed and delivered this Agreement to the Company and such Purchaser’s successors and assigns (so long as any such assignment complies with Section 13.2), provided, however, that any Purchaser of a Note that ceases to be the registered holder or a beneficial owner (through a nominee) of such Note as the result of a transfer thereof pursuant to Section 13.2 shall cease to be included within the meaning of “Purchaser” of such Note for the purposes of this Agreement upon such transfer.

“Qualified Institutional Buyer” means any Person who is a “qualified institutional buyer” within the meaning of such term as set forth in Rule 144A(a)(1) under the Securities Act.

“QPAM Exemption” is defined in Section 6.2(d).

“Real Property” means the real property owned by any Credit Party, or in which any such Person has a leasehold interest.

“REIT” means a domestic trust or corporation that qualifies as a real estate investment trust under the provisions of Section 856, et seq. of the Internal Revenue Code.

“Related Fund” means, with respect to any holder of any Note, any fund or entity that

(i)invests in Securities or bank loans, and (ii) is advised or managed by such holder, the same investment advisor as such holder or by an affiliate of such holder or such investment advisor.

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

“Required Holders” means at any time on or after the Closing, the holders of at least 51% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates).

“Resident Mortgage Liens” means, collectively, the Liens in existence on the Closing Date on Real Property acquired in the Senior Living Acquisition in favor of individual residents that, in the aggregate, do not in any case materially detract from the value of such Real Property,

or materially interfere with the ordinary conduct of the business of the Company and its Subsidiaries taken as a whole.

“Responsible Officer” means, with respect to any Person, the chief executive officer, president, treasurer, chief financial officer or chief accounting officer of such Person. Any document delivered hereunder that is signed by a Responsible Officer of a Credit Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Credit Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Credit Party.

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interest of the Company or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interest or of any option, warrant or other right to acquire any such Equity Interest.

“SEC” means the Securities and Exchange Commission of the United States, or any successor thereto.

“Securities” or “Security” shall have the meaning specified in section 2(1) of the Securities Act.

“Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.

“Senior Financial Officer” means the chief financial officer, principal accounting officer, treasurer or comptroller of the Company.

“Senior Living Acquisition” means the acquisition of the Senior Living Business by the Senior Living NHI Purchaser and the other transactions related to such acquisition in accordance with the Senior Living Acquisition Agreement and the other Senior Living Acquisition Documents.

“Senior Living Acquisition Agreement” means the Purchase Agreement dated as of December 1, 2014 between Senior Living NHI Purchaser and the Senior Living Seller.

“Senior Living Acquisition Documents” means the Senior Living Acquisition Agreement, the Senior Living Master Lease, the Senior Living Master Guaranty Agreement and each other material document, instrument, certificate and agreement (together with all exhibits, schedules and other attachments thereto) executed or delivered in connection with the Senior Living Acquisition Agreement.

“Senior Living Business” means all of the land, buildings, furniture, fixtures and equipment used to operate certain senior living communities to the extent purchased from the Senior Living Seller.

“Senior Living Master Lease” means the Master Lease dated as of December 1, 2014 between the Senior Living NHI Purchaser and Senior Living Seller, as tenant.

“Senior Living Master Lease Guaranty Agreement” means, collectively, the Unconditional and Continuing Lease Guaranty dated as of December 17, 2013 executed by Maxwell Group, Inc. and Live Long Well Care, LLC, and the Limited Lease Guaranty dated December 17, 2014 executed by Donald O. Thompson, Jr.

“Senior Living NHI Purchaser” means NHI-REIT of Seaside, LLC, a Delaware limited liability company.

“Senior Living Seller” means Senior Living Communities, LLC and certain other affiliated entities party to the Senior Living Acquisition Agreement.

“Solvent” and “Solvency” mean, with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“Source” is defined in Section 6.2.

“Specified Acquisition” means any acquisition by the Company or any of its Subsidiaries of all or substantially all of the assets or Equity Interests of any other Person or any division, business unit, product line or line of business, in each case that involves the payment of consideration by the Company or any of its Subsidiaries in excess of $50,000,000.

“Specified Disposition” means any disposition of all or substantially all of the assets or Equity Interests of any Subsidiary of the Company or any division, business unit, product line or line of business, in each case that results in the receipt by the Company or any of its Subsidiaries of net cash proceeds in excess of $50,000,000.

“Specified Transactions” means (a) any Specified Disposition and (b) any Specified Acquisition (including the Holiday Acquisition).

“Subsidiary” means, with respect to any Person (the “parent”), any other Person the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other Person (a) of which Equity Interests representing more than 50% of the equity or more than 50% of the ordinary voting power, or in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, Controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. Unless otherwise indicated, all references to “Subsidiary” hereunder means a Subsidiary of the Company.

“Subsidiary Guarantors” means, collectively or individually as the context may indicate, each Subsidiary of the Company (including, without limitation, each Subsidiary who may from time to time become a party to the Subsidiary Guaranty Agreement), other than (i) any Excluded Subsidiary and (ii) any non-Wholly Owned Subsidiary that is a Limited Guarantor. The Subsidiary Guarantors existing as of the Closing Date are set forth on Schedule A(2).

“Subsidiary Guaranty Agreement” means the Subsidiary Guaranty Agreement dated as of the Closing Date and made by each Subsidiary Guarantor in favor of the holders of the Notes, as amended, restated, supplemented or otherwise modified from time to time.

“Subsidiary Guaranty Joinder Agreement” means each Subsidiary Guaranty Joinder Agreement, substantially in the form thereof attached to the Subsidiary Guaranty Agreement, executed and delivered by a Subsidiary of the Company to the holders of the Notes pursuant to Section 9.13 or otherwise.

“Substitute Purchaser” is defined in Section 21.

“Super-Majority Holders” means at any time on or after the Closing, the holders of at least 66-2/3% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates).

“SVO” means the Securities Valuation Office of the NAIC or any successor to such Office.

“Swap Contract” means (a) any and all interest rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement,

or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to- market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a lender under the Credit Agreement or any Affiliate of any such lender).

“Total Lease Property Net Operating Income” means, with respect to any Lease Property of the Company or any of its Subsidiaries for any applicable period, (a) Lease Property Income for such period minus (b) Lease Property Expenses for such period.

“UCC” means the Uniform Commercial Code as in effect in the State of New York.

“Unencumbered Fixed Asset Value” means, with respect to each Unencumbered Lease Property owned by any Credit Party (other than a Limited Guarantor) as of any date of determination, (a) the Unencumbered Lease Property Net Operating Income for the Four-Quarter Period ending on or immediately prior to such date of determination for such Unencumbered Lease Property divided by (b) the applicable Capitalization Rate for such Unencumbered Lease Property.

“Unencumbered Lease Property” means each Real Property that satisfies all of the following requirements: (a) such Real Property is owned in fee simple solely by the Company or any of its Subsidiaries, (b) such Real Property is leased to another Person solely by the Company or any of its Subsidiaries, as lessor, pursuant to a long-term lease that is subject to customary market terms and conditions at the time such lease is executed; (c) neither such Real Property, nor any interest of the Company or such Subsidiary therein, is subject to any (i) Lien (except any Lien in favor of (A) the holders of the Notes, (B) a Credit Party (other than a Limited Guarantor) or (ii) the Resident Mortgage Liens) or any negative pledge; (d) regardless of whether such Real Property is owned by the Company or a Subsidiary, the Company has the right directly, or indirectly through a Subsidiary, to take the following actions without the need to obtain the consent of any Person (other than, if applicable with respect to any non-Wholly Owned Subsidiary, a holder of a Minority Interest in such Subsidiary): (i) to create Liens on such Real Property as security for Indebtedness of the Company or such Subsidiary, as applicable, and (ii) to sell, transfer or otherwise dispose of such Real Property; (e) the Company’s direct or indirect ownership interest in such Subsidiary, is not subject to any Lien or any negative pledge; (f) such Real Property is free of structural defects or major architectural deficiencies, title defects, environmental conditions or other adverse matters which, individually or collectively, materially impair the value of such Property; (g) any lessee of more than a majority of the leasable space in such Real Property is not more than 90 days past due with respect to any fixed rental payment obligations under any lease for such Real Property; and (h) such Real Property has been designated by the Company as an “Unencumbered Lease Property” on Schedule 5.21(b) or on a

Compliance Certificate delivered by the Company to the holders of the Notes pursuant to Section 9.2.

“Unencumbered Lease Property Expenses” means, with respect to the Company and its Subsidiaries, the cost (including, but not limited to, payroll, taxes, assessments, insurance, utilities, landscaping and other similar charges) of operating and maintaining any Unencumbered Lease Property of the Company or any of its Subsidiaries that are the responsibility of such Person and not paid directly by the tenant of such property, but excluding depreciation, amortization, interest costs and maintenance capital expenditures to the extent such property is under a triple-net lease.

“Unencumbered Lease Property Income” means, for any period of determination with respect to the Company and its Subsidiaries calculated on a consolidated basis, without duplication, the cash rents (excluding, as an abundance of caution, non-cash straight-line rent) and other cash revenues received by the Company or any of its Subsidiaries in the ordinary course of business attributable to any Unencumbered Lease Property of such Person, but excluding (a) security deposits and prepaid rent except to the extent applied in satisfaction of any tenant’s obligations for rent and (b) rent or other cash revenues received by the Company or any of its Subsidiaries from any tenant that is the subject of a proceeding under any Debtor Relief Law; provided that, for purposes of determining Unencumbered Lease Property Income for any period of determination that includes the fiscal quarter during which any Subsidiary is formed or acquired and for each of the three (3) fiscal quarters thereafter, the determination of the amount of cash rents and other cash revenues attributable to any Unencumbered Lease Property of such Subsidiary shall be deemed to be the amount of:

(i)for the four fiscal quarter period ending during the fiscal quarter during which such Subsidiary is formed or acquired, contract rents and revenues attributable to any Unencumbered Lease Property of such Subsidiary timesfour (4);

(ii)for the four consecutive fiscal quarter period ending the first fiscal quarter following the fiscal quarter during which such Subsidiary is formed or acquired, the amount of cash rents and other cash revenues attributable to any Unencumbered Lease Property of such Subsidiary for such fiscal quarter timesfour (4);

(iii)for the four consecutive fiscal quarter period ending the second fiscal quarter following the fiscal quarter during which such Subsidiary is formed or acquired, the amount of cash rents and other cash revenues attributable to any Unencumbered Lease Property of such Subsidiary for the preceding two consecutive fiscal quarters timestwo (2); and

(iv)for the four consecutive fiscal quarter period ending the third fiscal quarter following the fiscal quarter during which such Subsidiary is formed or acquired, the amount of cash rents and other revenues attributable to any Unencumbered Lease Property of such Subsidiary for the preceding three consecutive fiscal quarters timesfour-thirds (4/3).

For purposes of this Agreement, Uncencumbered Lease Property Income shall be adjusted on a Pro Forma Basis.

“Unencumbered Lease Property Net Operating Income” means, with respect to any Unencumbered Lease Property of the Company or any of its Subsidiaries for any applicable period, (a) Unencumbered Lease Property Income for such period minus (b) Unencumbered Lease Property Expenses for such period.

“USA PATRIOT Act” means United States Public Law 107-56, Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.

“U.S. Economic Sanctions” is defined in Section 5.27(a).

“Voting Power” means, with respect to any Person, the right to vote for the election of the Governing Body of such Person under ordinary circumstances.

“Wholly Owned” means, with respect to a Subsidiary, that all of the Equity Interests of such Subsidiary are, directly or indirectly, owned or controlled by the Company and/or one or more of its Wholly Owned Subsidiaries.

SCHEDULE A(1)

LIMITED GUARANTORS

	Entity Name	Jurisdiction
Bickford JV Entities - PropCos:
1.	NHI-Bickford RE, LLC	DE
2.	Wabash Bickford Cottage, L.L.C.	KS
Bickford JV Entities - OpCos:
3.	Bickford Master II, L.L.C.	KS
4.	Bickford of Carmel, LLC	KS
5.	Wabash Bickford Cottage Opco, LLC	KS
6.	Bickford of Crown Point, LLC	KS
7.	Bickford of Greenwood, LLC	KS
Care Acquisition Entities - PropCos:
8.	Care YBE Subsidiary LLC	DE
Care Acquisition Entities - OpCos:
9.	Bickford Master I, L.L.C.	KS
10.	Crawfordsville Bickford Cottage, L.L.C.	KS
11.	Moline Bickford Cottage, L.L.C.	KS

SCHEDULE A(2)

SUBSIDIARY GUARANTORS

	Entity Name	Jurisdiction
1.	NHI/REIT, Inc.	MD
2.	Florida Holdings IV, LLC	DE
3.	NHI/Anderson, LLC	DE
4.	NHI/Laurens, LLC	DE
5.	Texas NHI Investors, LLC	TX
6.	NHI of Paris, LLC	DE
7.	NHI of San Antonio, LLC	DE
8.	NHI of East Houston, LLC	DE
9.	NHI of Northwest Houston, LLC	DE
10.	NHI REIT of Alabama, L.P.	AL
11.	NHI-REIT of Arizona, Limited Partnership	AZ
12.	NHI-REIT of California, LP	CA
13.	NHI/REIT of Florida, L.P.	FL
14.	NHI-REIT of Florida, LLC	DE
15.	NHI-REIT of Georgia, L.P.	GA
16.	NHI-REIT of Idaho, L.P.	ID
17.	NHI of Kansas, L.P.	KS
18.	NHI-REIT of Minnesota, LLC	DE
19.	NHI-REIT of Missouri, LP	MO
20.	NHI-REIT of Northeast, LLC	DE
21.	NHI-REIT of New Jersey, L.P.	NJ
22.	NHI-REIT of Pennsylvania, L.P.	PA
23.	NHI-REIT of South Carolina, L.P.	SC
24.	NHI-REIT of Tennessee, LLC	TN
25.	NHI-REIT of Texas, L.P.	TX
26.	NHI-REIT of Virginia, L.P.	VA
27.	NHI Selah Properties, LLC	DE
28.	NHI of Ennis, LLC	DE
29.	NHI of Greenville, LLC	DE
30.	NHI of North Houston, LLC	DE
31.	NHI of West Houston, LLC	DE
32.	NHI-REIT of Washington, LLC	DE
33.	International Health Investors, Inc.	MD
34.	NHI of Kyle, LLC	DE
35.	NHI-SS TRS, LLC	DE
36.	NHI PropCo, LLC	DE
37.	NHI-REIT of Oregon, LLC	DE
38.	NHI-REIT of Wisconsin, LLC	DE
39.	NHI-REIT of Ohio, LLC	DE
40.	NHI-REIT of Maryland, LLC	DE
41.	NHI-REIT of Next House, LLC	DE
42.	Myrtle Beach Retirement Residence LLC	OR
43.	Voorhees Retirement Residence LLC	OR
44.	NHI-REIT of Seaside, LLC	DE

[FORM OF SERIES A NOTE] NATIONAL HEALTH INVESTORS, INC.

3.99% SERIES A SENIOR NOTE DUE JANUARY 13, 2023

No. RA-[ ]    January 13, 2015

$[]    PPN 63633D A*5

FOR VALUE RECEIVED, the undersigned, NATIONAL HEALTH INVESTORS, INC. (herein

called the “Company”), a corporation organized and existing under the laws of the State of Maryland, hereby promises to pay to [], or registered assigns, the principal sum of [] DOLLARS (or so much thereof as shall not have been prepaid) on January 13, 2023 (the “Maturity Date”), with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance hereof at the rate of 3.99% per annum from the date hereof, payable quarterly, on the 13th day of January, April, July and October in each

year, commencing with the January, April, July and October next succeeding the date hereof, and on the Maturity Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, (x) on any overdue payment of interest and (y) during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount, at a rate per annum from time to time equal to the greater of (i) 5.99% or

(ii)2.00% over the rate of interest publicly announced by JPMorgan Chase Bank, N.A. from time to time in New York, New York as its “base” or “prime” rate, payable quarterly as aforesaid (or, at the option of the registered holder hereof, on demand).

Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at JPMorgan Chase Bank,

N.A. or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.

This Note is one of a series of Series A Senior Notes (herein called the “Notes”) issued pursuant to the Note Purchase Agreement, dated as of January 13, 2015 (as from time to time amended, the “Note Purchase Agreement”), between the Company and the respective Purchasers named therein and is entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) made the representation set forth in Section 6.2 of the Note Purchase Agreement. Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement.

This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in

SCHEDULE 1(a)

(to Note Purchase Agreement)

writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

This Note is subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise.

If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.

This Note shall be construed and enforced in accordance with, and the rights of the Company and the holder of this Note shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

NATIONAL HEALTH INVESTORS, INC.

By: Name:

Title:

-2-

[FORM OF SERIES B NOTE] NATIONAL HEALTH INVESTORS, INC.

4.51% SERIES B SENIOR NOTE DUE JANUARY 13, 2027

No. RB-[ ]    January 13, 2015

$[]    PPN 63633D A@3

FOR VALUE RECEIVED, the undersigned, NATIONAL HEALTH INVESTORS, INC. (herein

called the “Company”), a corporation organized and existing under the laws of the State of Maryland, hereby promises to pay to [], or registered assigns, the principal sum of [] DOLLARS (or so much thereof as shall not have been prepaid) on January 13, 2027 (the “Maturity Date”), with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance hereof at the rate of 4.51% per annum from the date hereof, payable quarterly, on the 13th day of January, April, July and October in each

year, commencing with the January, April, July and October next succeeding the date hereof, and on the Maturity Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, (x) on any overdue payment of interest and (y) during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount, at a rate per annum from time to time equal to the greater of (i) 6.51% or

(ii) 2.00% over the rate of interest publicly announced by JPMorgan Chase Bank, N.A. from time to time in New York, New York as its “base” or “prime” rate, payable quarterly as aforesaid (or, at the option of the registered holder hereof, on demand).

Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at JPMorgan Chase Bank,

N.A.or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.

This Note is one of a series of Series B Senior Notes (herein called the “Notes”) issued pursuant to the Note Purchase Agreement, dated as of January 13, 2015 (as from time to time amended, the “Note Purchase Agreement”), between the Company and the respective Purchasers named therein and is entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) made the representation set forth in Section 6.2 of the Note Purchase Agreement. Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement.

This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in

SCHEDULE 1(b)

(to Note Purchase Agreement)

writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

This Note is subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise.

If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.

This Note shall be construed and enforced in accordance with, and the rights of the Company and the holder of this Note shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

NATIONAL HEALTH INVESTORS, INC.

By: Name:

Title:

-2-

FORM OF OPINION OF SPECIAL COUNSEL

TO THE COMPANY, SUBSIDIARY GUARANTORS AND LIMITED GUARANTORS

Matters To Be Covered in Opinion of Special Counsel to the

Company, Subsidiary Guarantors and Limited Guarantors

1.Each of the Company, the Subsidiary Guarantors and Limited Guarantors is a corporation/limited liability company/partnership, validly existing and in good standing and having requisite corporate power and authority to issue and sell the Notes, to guaranty the Notes and to execute and deliver the documents.

2.Each of the Company, the Subsidiary Guarantors and Limited Guarantors being duly qualified and in good standing as a foreign corporation in certain jurisdictions to be agreed.

3.Due authorization and execution of the documents and such documents being legal, valid, binding and enforceable.

4.No conflicts with charter documents, laws or other agreements listed in the most recent 10-K of the Company (including the Credit Agreement).

5.All consents required to issue and sell the Notes and to execute and deliver the documents having been obtained.

6. No litigation questioning validity of documents.

7.The Notes not requiring registration under the Securities Act of 1933, as amended through the date of the opinion; no need to qualify an indenture under the Trust Indenture Act of 1939, as amended through the date of the opinion.

8. No violation of Regulations T, U or X of the Federal Reserve Board.

9.Company not an “investment company”, or a company “controlled” by an “investment company”, under the Investment Company Act of 1940, as amended.

SCHEDULE 4.4

(To Note Purchase Agreement)

NATIONAL HEALTH INVESTORS

222 Robert Rose Drive Murfreesboro, TN 37129

INFORMATION RELATING TO PURCHASERS

3.99%    4.51%

Senior Notes    Senior Notes

THE PRUDENTIAL INSURANCE COMPANY OF

AMERICA    $59,850,000.00    $31,760,000.00

$20,000,000.00    $10,000,000.00

$25,000,000.00

(1) All payments on account of Notes held by such purchaser shall be made by wire transfer of immediately available funds for credit to:

JPMorgan Chase Bank¹New York, NY

ABA No.: 021-000-021

Account Name: Prudential Managed Portfolio

Account No.: P86188 (please do not include spaces) (in the case of payments on account of the Note originally issued in the principal amount of $59,850,000.00 and $31,760,000.00)

Account Name: The Prudential - Privest Portfolio

Account No.: P86189 (please do not include spaces) (in the case

1 If Company's account is with JPMorgan Chase, use the following wiring instructions:

JPMorgan Chase Bank New York New York, NY

ABA No.: 021-000-021

Account No.: 900-9000-168

Account Name: North American Insurance

For the Notes in the principal amount of $59,850,000.00 and $31,760,000.00 FFC: P86188

FFC Account Name: Prudential Managed Portfolio

For the Notes in the principal amount of $20,000,000.00 FFC: P86189

FFC Account Name: The Prudential – Privest Portfolio

For the Notes in the principal amount of $10,000,000.00 FFC: P30876

FFC Account Name: Bristol Myers Squib

For the Notes in the principal amount of $25,000,000.00 FFC: P30875

FFC Account Name: Motorola

of payments on account of the Note originally issued in the principal amount of $20,000,000.00)

Account Name: Bristol Myers Squib

Account No.: P30876 (please do not include spaces) (in the case of payments on account of the Note originally issued in the principal amount of $10,000,000.00)

Account Name: Motorola

Account No.: P30875 (please do not include spaces) (in the case of payments on account of the Note originally issued in the principal amount of $25,000,000.00)

Each such wire transfer shall set forth the name of the Company, a reference to "3.99% Senior Notes due January 13, 2023,”and in the case of “4.51% Senior Notes due January 13, 2027,” “Security No. INV11839, PPN 63633D A@3" and the due date and application (as among principal, interest and Make-Whole Amount) of the payment being made.

(2) Address for all notices relating to payments: The Prudential Insurance Company of America

c/o Investment Operations Group Gateway Center Two, 10th Floor 100 Mulberry Street

Newark, NJ 07102-4077

Attention: Manager, Billings and Collections

(3) Address for all other communications and notices: The Prudential Insurance Company of America

c/o Prudential Capital Group 1075 Peachtree Street Suite 3600

Atlanta, GA 30309

Attention: Managing Director

cc: Vice President and Corporate Counsel

(4) Recipient of telephonic prepayment notices: Manager, Trade Management Group Telephone: (973) 367-3141

Facsimile: (888) 889-3832

(5) Address for Delivery of Notes:

Send physical security by nationwide overnight delivery service to:

Prudential Capital Group

1075 Peachtree Street, Suite 3600

Atlanta, GA 30309

Attention: Michael Fierro Telephone: (404) 870-3753

(6) Tax Identification No.: 22-1211670

3.99%    4.51%

Senior Notes    Senior Notes

GIBRALTAR LIFE INSURANCE CO., LTD.    $ -0-    $20,000,000

(1) All principal, interest and Make-Whole Amount payments on account of Notes held by such purchaser shall be made by wire transfer of immediately available funds for credit to:

JPMorgan Chase Bank2 New York, NY

ABA No.: 021-000-021

Account Name: GIBPRVHFR1

Account No.: P30782 (please do not include spaces)

Each such wire transfer shall set forth the name of the Company, a reference to "4.51% Senior Notes due January 13, 2027, Security No. INV11839, PPN 63633D A@3" and the due date and application (as among principal, interest and Make-Whole Amount) of the payment being made.

(2) All payments, other than principal, interest or Make-Whole Amount, on account of Notes held by such purchaser shall be made by wire transfer of immediately available funds for credit to:

JPMorgan Chase Bank New York, NY

ABA No. 021-000-021

Account No. 304199036

Account Name: Prudential International Insurance Service Co.

Each such wire transfer shall set forth the name of the Company, a reference to "4.51% Senior Notes due January 13, 2027, Security No. INV11839, PPN 63633D A@3" and the due date and application (as among principal, interest and Make-Whole Amount) of the payment being made.

²  If Company's account is with JPMorgan Chase, use the following wiring instructions:

JPMorgan Chase Bank New York New York, NY

ABA No.: 021-000-021

Account No.: 900-9000-168

Account Name: North American Insurance FFC: P30782

FFC Account Name: GIBPRVHFR1

(3) Address for all notices relating to payments:

The Gibraltar Life Insurance Co., Ltd. 2-13-10, Nagata-cho

Chiyoda-ku, Tokyo 100-8953, Japan

Telephone: 81-3-5501-6680

Facsimile: 81-3-5501-6432

E-mail: mizuho.matsumoto@gib-life.co.jp

Attention: Mizuho Matsumoto, Team Leader of Investment Administration Team

and e-mail copy to:

Ito_Yuko@gib-life.co.jp

Maki.Ichihari@gib-life.co.jp

Kenji.Inoue@gib-life.co.jp

(4) Address for all other communications and notices: Prudential Private Placement Investors, L.P.

c/o Prudential Capital Group 1075 Peachtree Street, Suite 3600

Atlanta, GA 30309

Attention: Managing Director

cc: Vice President and Corporate Counsel

(5) Address for Delivery of Notes:

Send physical security by nationwide overnight delivery service to:

c/o Prudential Capital Group 1075 Peachtree Street, Suite 3600

Atlanta, GA 30309

Attention: Michael Fierro Telephone: (404) 870-3753

(6) Tax Identification No.: 98-0408643

3.99%    4.51%

Senior Notes    Senior Notes

FARMERS INSURANCE EXCHANGE    $10,500,000.00    $-0-

(1) All payments on account of Notes held by such purchaser shall be made by wire transfer of immediately available funds for credit to:

JPMorgan Chase Bank ABA: 021000021

Beneficiary Account No: 9009000200 Beneficiary Account Name: JPMorgan Income

Ultimate Beneficiary: P13939 Farmers Insurance Exchange

Each such wire transfer shall set forth the name of the Company, a reference to "3.99% Senior Notes due January 13, 2023, PPN 63633D A*5" and the due date and application (as among principal, interest and Make-Whole Amount) of the payment being made.

(2) Address for all notices relating to payments: Farmers

4680 Wilshire Blvd.

Los Angeles, CA 90010 Attention: Treasury

Treasury: Treasury Manager 323-932-3450

usw.treasury.farmers@farmersinsurance.com

(3) Address for all other communications and notices: Prudential Private Placement Investors, L.P.

c/o Prudential Capital Group

1075 Peachtree Street, Suite 3600

Atlanta, GA 30309

Attention: Managing Director

cc: Vice President and Corporate Counsel

(4) Address for Delivery of Notes:

(a) Send physical security by nationwide overnight delivery service to:

Mailing Address (for overnight mail) JPMorgan Chase Bank, N.A. Physical Receive Department

4 Chase Metrotech Center 3rd Floor

Brooklyn, NY 11245-0001

Attention: Brian Cavanaugh, Tel. 718-242-0264

Street Deliveries (via messenger or walk up) JPMorgan Chase Bank, N.A.

4 Chase Metrotech Center 1st Floor, Window 5 Brooklyn, NY 11245-0001

Attention: Physical Receive Department

(Use Willoughby Street Entrance)

Please include in the cover letter accompanying the Notes a reference to the Purchaser's account number ("P13939 - Farmers Insurance Exchange") and CUSIP information.

(b) Send copy by nationwide overnight delivery service to: Prudential Capital Group

Gateway Center 2, 10th Floor 100 Mulberry

Newark, NJ 07102

Attention: Trade Management, Manager Telephone: (973) 367-3141

(5) Tax Identification No.: 95-2575893

3.99%    4.51%

Senior Notes    Senior Notes

MID CENTURY INSURANCE COMPANY    $4,500,000.00    $-0-

(1) All payments on account of Notes held by such purchaser shall be made by wire transfer of immediately available funds for credit to:

JPMorgan Chase Bank ABA: 021000021

Beneficiary Account No: 9009000200 Beneficiary Account Name: JPMorgan Income

Ultimate Beneficiary: G23628 Mid Century Insurance Company

Each such wire transfer shall set forth the name of the Company, a reference to "3.99% Senior Notes due January 13, 2023, PPN 63633D A*5" and the due date and application (as among principal, interest and Make-Whole Amount) of the payment being made.

(2) Address for all notices relating to payments: Farmers

4680 Wilshire Blvd.

Los Angeles, CA 90010 Attention: Treasury

Treasury: Treasury Manager 323-932-3450

usw.treasury.farmers@farmersinsurance.com

(3) Address for all other communications and notices: Prudential Private Placement Investors, L.P.

c/o Prudential Capital Group 1075 Peachtree Street, Suite 3600

Atlanta, GA 30309

Attention: Managing Director

cc: Vice President and Corporate Counsel

(4) Address for Delivery of Notes:

(a) Send physical security by nationwide overnight delivery service to:

Mailing Address (for overnight mail) JPMorgan Chase Bank, N.A. Physical Receive Department

4 Chase Metrotech Center 3rd Floor

Brooklyn, NY 11245-0001

Attention: Brian Cavanaugh, Tel. 718-242-0264

Street Deliveries (via messenger or walk up) JPMorgan Chase Bank, N.A.

4 Chase Metrotech Center 1st Floor, Window 5 Brooklyn, NY 11245-0001

Attention: Physical Receive Department

(Use Willoughby Street Entrance)

Please include in the cover letter accompanying the Notes a reference to the Purchaser's account number ("G23628 - Mid Century Insurance Company ") and CUSIP information.

(b) Send copy by nationwide overnight delivery service to: Prudential Capital Group

Gateway Center 2, 10th Floor

100 Mulberry

Newark, NJ 07102

Attention: Trade Management, Manager Telephone: (973) 367-3141

(5) Tax Identification No.: 95-6016640

3.99%    4.51%

Senior Notes    Senior Notes

FARMERS NEW WORLD LIFE INSURANCE COMPANY    $10,000,000.00    $-0-

(1) All payments on account of Notes held by such purchaser shall be made by wire transfer of immediately available funds for credit to:

JPMorgan Chase Bank New York, NY

ABA No.: 021000021

Account No.: 9009000200

Account Name: SSG Private Income Processing For further credit to Account P58834 Farmers NWL

Each such wire transfer shall set forth the name of the Company, a reference to "3.99% Senior Notes due January 13, 2023, PPN 63633D A*5" and the due date and application (as among principal, interest and Make-Whole Amount) of the payment being made.

(2) All notices of payments and written confirmations of such wire transfers:

investment.accounting@farmersinsurance.com

or

Farmers Insurance Company

Attention: Investment Accounting Team 4680 Wilshire Blvd., 4th Floor

Los Angeles, CA 90010

and

investments.operations@farmersinsurance.com

or

Farmers New World Life Insurance Company Attention: Investment Operations Team

3003 77th Avenue Southeast, 5th Floor Mercer Island, WA 98040-2837

(3) Address for all other communications and notices: Prudential Private Placement Investors, L.P.

c/o Prudential Capital Group

1075 Peachtree Street, Suite 3600

Atlanta, GA 30309

Attention: Managing Director

cc: Vice President and Corporate Counsel

(4) Address for Delivery of Notes:

(a)Send physical security to: If sending by overnight delivery:

JPMorgan Chase Bank, N.A.

4 Chase Metrotech Center, 3rd Floor Brooklyn, NY 11245-0001

Attention: Physical Receive Department Brian Cavanaugh

Telephone: (718) 242-0264

If sending by messenger: JPMorgan Chase Bank, N.A.

4 Chase Metrotech Center 1st Floor, Window 5 Brooklyn, NY 11245-0001

Attention: Physical Receive Department (Use Willoughby Street Entrance)

Please include in the cover letter accompanying the Notes a reference to the Purchaser's account number ("P58834 – Farmers New World Life Private Placement") and CUSIP information.

(b)Send copy by nationwide overnight delivery service to: Prudential Capital Group

Gateway Center 2, 10th Floor

100 Mulberry

Newark, NJ 07102

Attention: Trade Management, Manager Telephone: (973) 367-3141

(5) Tax Identification No.: 91-0335750

3.99%    4.51%

Senior Notes    Senior Notes

PRUDENTIAL ANNUITIES LIFE ASSURANCE

CORPORATION    $ -0-    $8,000,000.00

(1) All payments on account of Notes held by such purchaser shall be made by wire transfer of immediately available funds for credit to:

JPMorgan Chase Bank3 New York, NY

ABA No.: 021-000-021

Account Name: Prudential Annuities Life Assurance Corporation Account No.: P01309 (please do not include spaces)

Each such wire transfer shall set forth the name of the Company, a reference to "4.51% Senior Notes due January 13, 2027, Security No. INV11839, PPN 63633D A@3" and the due date and application (as among principal, interest and Make-Whole Amount) of the payment being made.

(2) Address for all notices relating to payments: Prudential Annuities Life Assurance Corporation

c/o The Prudential Insurance Company of America

c/o Investment Operations Group Gateway Center Two, 10th Floor 100 Mulberry Street

Newark, NJ 07102-4077

Attention: Manager, Billings and Collections

3 If Company's account is with JPMorgan Chase, use the following wiring instructions:

JPMorgan Chase Bank New York New York, NY

ABA No.: 021-000-021

Account No.: 900-9000-168

Account Name: North American Insurance FFC: P01309

FFC Account Name: Prudential Annuities Life Assurance Corporation

(3) Address for all other communications and notices:

Prudential Annuities Life Assurance Corporation c/o Prudential Capital Group

1075 Peachtree Street, Suite 3600

Atlanta, GA 30309

Attention: Managing Director

cc: Vice President and Corporate Counsel

(4) Recipient of telephonic prepayment notices: Manager, Trade Management Group

Telephone: (973) 367-3141

Facsimile: (888) 889-3832

(5) Address for Delivery of Notes:

Send physical security by nationwide overnight delivery service to:

Prudential Capital Group

1075 Peachtree Street, Suite 3600

Atlanta, GA 30309

Attention: Michael Fierro Telephone: (404) 870-3753

(6) Tax Identification No.: 06-1241288

3.99%    4.51%

Senior Notes    Senior Notes

PICA HARTFORD LIFE & ANNUITY COMFORT TRUST    $ -0-    $5,240,000.00

(1) All payments on account of Notes held by such purchaser shall be made by wire transfer of immediately available funds for credit to:

BONY Mellon 101 Barclay Street New York, NY 10286 ABA: 021-000-018

Account Name: BNY Mellon Transfer Funds Reconcilement Account Number: GLA 111-565

FFC: 248358 PICA Hartford Life & Annuity Comfort Trust

Each such wire transfer shall set forth the name of the Company, a reference to "4.51% Senior Notes due January 13, 2027, Security No. INV11839, PPN 63633D A@3" and the due date and application (as among principal, interest and Make-Whole Amount) of the payment being made.

(2) Address for all notices relating to payments:

PICA Hartford Life & Annuity Comfort Trust

c/o The Prudential Insurance Company of America c/o Investment Operations Group

Gateway Center Two, 10th Floor 100 Mulberry Street

Newark, NJ 07102-4077

Attention: Manager, Billings and Collections

(3) Address for all other communications and notices:

PICA Hartford Life & Annuity Comfort Trust c/o Prudential Capital Group

1075 Peachtree Street, Suite 3600

Atlanta, GA 30309

Attention: Managing Director

cc: Vice President and Corporate Counsel

(4) Recipient of telephonic prepayment notices: Manager, Trade Management Group

Telephone: (973) 367-3141

Facsimile: (888) 889-3832

(5) Address for Delivery of Notes:

Send physical security by nationwide overnight delivery service to:

Prudential Capital Group

1075 Peachtree Street, Suite 3600

Atlanta, GA 30309

Attention: Michael Fierro Telephone: (404) 870-3753

(6) Tax Identification No.: 22-1211670

3.99%    4.51%

Senior Notes    Senior Notes

PRUCO LIFE INSURANCE COMPANY    $7,000,000.00    $ -0-

(1) All payments on account of Notes held by such purchaser shall be made by wire transfer of immediately available funds for credit to:

JPMorgan Chase Bank4 New York, NY

ABA No.: 021-000-021

Account Name: Pruco Life Private Placement Account No.: P86192 (please do not include spaces)

Each such wire transfer shall set forth the name of the Company, a reference to "3.99% Senior Notes due January 13, 2023, Security No. INV11839, PPN 63633D A*5", and the due date and application (as among principal, interest and Make-Whole Amount) of the payment being made.

(2) Address for all notices relating to payments:

Pruco Life Insurance Company

c/o The Prudential Insurance Company of America c/o Investment Operations Group

Gateway Center Two, 10th Floor 100 Mulberry Street

Newark, NJ 07102-4077

Attention: Manager, Billings and Collections

(3) Address for all other communications and notices:

Pruco Life Insurance Company c/o Prudential Capital Group 1075 Peachtree Street, Suite 3600

4 If Company's account is with JPMorgan Chase, use the following wiring instructions:

JPMorgan Chase Bank New York New York, NY

ABA No.: 021-000-021

Account No.: 900-9000-168

Account Name: North American Insurance FFC: P86192

FFC Account Name: Pruco Life Private Placement

Atlanta, GA 30309

Attention: Managing Director

cc: Vice President and Corporate Counsel

(4) Recipient of telephonic prepayment notices: Manager, Trade Management Group

Telephone: (973) 367-3141

Facsimile: (888) 889-3832

(5) Address for Delivery of Notes:

Send physical security by nationwide overnight delivery service to:

Prudential Capital Group

1075 Peachtree Street, Suite 3600

Atlanta, GA 30309

Attention: Michael Fierro Telephone: (404) 870-3753

(6) Tax Identification No.: 22-1944557

3.99%    4.51%

Senior Notes    Senior Notes

THE PRUDENTIAL LIFE INSURANCE COMPANY, LTD.    $5,000,000.00    $ -0-

(1) All principal, interest and Make-Whole Amount payments on account of Notes held by such purchaser shall be made by wire transfer of immediately available funds for credit to:

JPMorgan Chase Bank5 New York, NY

ABA No.: 021-000-021

Account No.: P86291 (please do not include spaces)

Account Name: The Prudential Life Insurance Company, Ltd.

Each such wire transfer shall set forth the name of the Company, a reference to "3.99% Senior Notes due January 13, 2023, Security No. INV11839, PPN 63633D A*5" and the due date and application (as among principal, interest and Make-Whole Amount) of the payment being made.

(2) All payments, other than principal, interest or Make-Whole Amount, on account of Notes held by such purchaser shall be made by wire transfer of immediately available funds for credit to:

JPMorgan Chase Bank New York, NY

ABA No. 021-000-021

Account No. 304199036

Account Name: Prudential International Insurance Service Co.

Each such wire transfer shall set forth the name of the Company, a reference to "3.99% Senior Notes due January 13, 2023, Security No. INV11839, PPN 63633D A*5" and the due date and application (e.g., type of fee) of the payment being made.

5 If Company's account is with JPMorgan Chase, use the following wiring instructions:

JPMorgan Chase Bank New York New York, NY

ABA No.: 021-000-021

Account No.: 900-9000-168

Account Name: North American Insurance FFC: P86291

FFC Account Name: The Prudential Life Insurance Company, Ltd.

(3) Address for all notices relating to payments:

The Prudential Life Insurance Company, Ltd. 2-13-10, Nagatacho

Chiyoda-ku, Tokyo 100-0014, Japan

Telephone: 81-3-5501-5190

Facsimile: 81-03-5501-5037

E-mail: osamu.egi@prudential.com

Attention: Osamu Egi, Team Leader of Financial Reporting Team

and e-mail copy to:

Ito_Yuko@gib-life.co.jp

Maki.Ichihari@gib-life.co.jp

Kenji.Inoue@gib-life.co.jp

(4)    Address for all other communications and notices: Prudential Private Placement Investors, L.P.

c/o Prudential Capital Group

1075 Peachtree Street, Suite 3600

Atlanta, GA 30309

Attention: Managing Director

cc: Vice President and Corporate Counsel

(5)    Address for Delivery of Notes:

Send physical security by nationwide overnight delivery service to:

Prudential Capital Group

1075 Peachtree Street, Suite 3600

Atlanta, GA 30309

Attention: Michael Fierro Telephone: (404) 870-3753

(6)Tax Identification No.: 98-0433392

3.99%    4.51%

Senior Notes    Senior Notes

PRUDENTIAL RETIREMENT GUARANTEED COST

BUSINESS TRUST    $4,900,000.00    $ -0-

(1) All payments on account of Notes held by such purchaser shall be made by wire transfer of immediately available funds for credit to:

JPMorgan Chase Bank New York, NY

ABA No. 021000021

Beneficiary Account Name: North American Beneficiary Account No.: 9009000168

BBI: Account of Prudential for G09966 PRIAC GC PVT

Each such wire transfer shall set forth the name of the Company, a reference to "3.99% Senior Notes due January 13, 2023, Security No. INV11839, PPN 63633D A*5" and the due date and application (as among principal, interest and Make-Whole Amount) of the payment being made.

(2) Address for all notices relating to payments:

Pru & Co

c/o Prudential Investment Management, Inc. Attn: Private Placement Trade Management PRIAC Administration

Gateway Center Four, 7th Floor

100 Mulberry Street

Newark, NJ 07102

Telephone: (973) 802-8107

Facsimile: (800) 224-2278

(3) Address for all other communications and notices: Prudential Retirement Guaranteed Cost Business Trust

c/o Prudential Capital Group 1075 Peachtree Street, Suite 3600

Atlanta, GA 30309

Attention: Managing Director

cc: Vice President and Corporate Counsel

(4) Address for Delivery of Notes:

Send physical security by nationwide overnight delivery service to:

Prudential Capital Group

1075 Peachtree Street, Suite 3600

Atlanta, GA 30309 Attention: Michael Fierro Telephone: (404) 870-3753

(5) Tax Identification No.: 06-1050034

3.99%    4.51%

Senior Notes    Senior Notes

THE INDEPENDENT ORDER OF FORESTERS    $3,250,000.00    $ -0-

(1) All payments on account of Notes held by such purchaser shall be made by wire transfer of immediately available funds for credit to:

State Street Bank and Trust Co 801 Pennsylvania Ave.

Kansas City, MO 64105 ABA No.: 011000028

DDA Account No.: 10340438

Ref: IOF Trust Prvt Placements - DT1Z

Each such wire transfer shall set forth the name of the Company, a reference to "3.99% Senior Notes due January 13, 2023, PPN 63633D A*5" and the due date and application (as among principal, interest and Make-Whole Amount) of the payment being made.

(2) All notices of payments and written confirmations of such wire transfers:

The Independent Order of Foresters 789 Don Mills Road

Toronto, Ontario, Canada M3C 1T9

Attention: Investment Services Department

(3) Address for all other communications and notices: Prudential Private Placement Investors, L.P.

c/o Prudential Capital Group 1075 Peachtree Street, Suite 3600

Atlanta, GA 30309

Attention: Managing Director

cc: Vice President and Corporate Counsel

(4) Address for Delivery of Notes:

(a) Send physical security by nationwide overnight delivery service to:

DTCC

Newport Office Center 570 Washington Blvd Jersey City, NJ 07310

Attention: 5th floor/NY Window/Robert Mendez FBO: State Street Bank and Trust Company

DTC: Participant # 997/DT1Z Agent Bank #: 26022

BIC: SBOSUS3FXXX

(b) Send copy by nationwide overnight delivery service to: Prudential Capital Group

Gateway Center 2, 10th Floor

100 Mulberry

Newark, NJ 07102

Attention: Trade Management, Manager Telephone: (973) 367-3141

(5) Tax Identification No.: 98-0000680

SCHEDULE 5.12(d)

PENSION PLANS

National Health Investors Inc. 401(k) Profit Sharing Plan and Trust, a defined contribution plan.

SCHEDULE 5.13

SUBSIDIARIES

	Entity Name	Jurisdiction	FEIN
1.	NHI/REIT, Inc.	MD	62-1487865
2.	Florida Holdings IV, LLC	DE	27-1924499
3.	NHI/Anderson, LLC	DE	52-2331153
4.	NHI/Laurens, LLC	DE	52-2331154
5.	Texas NHI Investors, LLC	TX	74-3014115
6.	NHI of Paris, LLC	DE	27-1756892
7.	NHI of San Antonio, LLC	DE	27-1757067
8.	NHI of East Houston, LLC	DE	27-1757142
9.	NHI of Northwest Houston, LLC	DE	27-1757103
10.	NHI REIT of Alabama, L.P.	AL	62-1481479
11.	NHI-REIT of Arizona, Limited Partnership	AZ	62-1685246
12.	NHI-REIT of California, LP	CA	27-2122291
13.	NHI/REIT of Florida, L.P.	FL	62-1481481
14.	NHI-REIT of Florida, LLC	DE	27-1928550
15.	NHI-REIT of Georgia, L.P.	GA	62-1481494
16.	NHI-REIT of Idaho, L.P.	ID	62-1685245
17.	NHI of Kansas, L.P.	KS	48-1248771
18.	NHI-REIT of Minnesota, LLC	DE	27-2048470
19.	NHI-REIT of Missouri, LP	MO	62-1481480
20.	NHI-REIT of Northeast, LLC	DE	45-3411924
21.	NHI-REIT of New Jersey, L.P.	NJ	62-1685247
22.	NHI-REIT of Pennsylvania, L.P.	PA	56-2523471
23.	NHI-REIT of South Carolina, L.P.	SC	62-1485491
24.	NHI-REIT of Tennessee, LLC	TN	45-3460114
25.	NHI-REIT of Texas, L.P.	TX	62-1596142
26.	NHI-REIT of Virginia, L.P.	VA	62-1485490
27.	NHI Selah Properties, LLC	DE	45-1860372
28.	NHI of Ennis, LLC	DE	45-3608319
29.	NHI of Greenville, LLC	DE	45-3608282
30.	NHI of North Houston, LLC	DE	45-3608356
31.	NHI of West Houston, LLC	DE	45-3608385
32.	NHI-REIT of Washington, LLC	DE	45-5011225
33.	International Health Investors, Inc.	MD	45-4923959
34.	NHI of Kyle, LLC	DE	45-5230300
35.	NHI-SS TRS, LLC	DE	46-0954233
36.	NHI PropCo, LLC	DE	46-0942119
37.	NHI-REIT of Oregon, LLC	DE	46-1292980
38.	NHI-REIT of Wisconsin, LLC	DE	46-1560584
39.	NHI-REIT of Ohio, LLC	DE	46-2593624
40.	NHI-REIT of Maryland, LLC	DE	46-3823995
41.	NHI-REIT of Next House, LLC	DE	46-4092682
42.	NHI-Bickford RE, LLC	DE	27-1335068
43.	Myrtle Beach Retirement Residence LLC	OR	20-1051246
44.	Voorhees Retirement Residence LLC	OR	20-3903502

	Entity Name	Jurisdiction	FEIN
45.	Cedar Falls Bickford Cottage, L.L.C.	KS	48-1231745
46.	Grand Island Bickford Cottage, L.L.C.	KS	48-1231739
47.	Wabash Bickford Cottage, L.L.C.	KS	48-1241155
48.	Bickford Master II, L.L.C.	KS	27-1064460
49.	Battle Creek Bickford Cottage, L.L.C.	KS	20-1582339
50.	Bickford of Carmel, LLC	KS	45-5324899
51.	Cedar Falls Bickford Cottage Opco, LLC	KS	46-2775662
52.	Grand Island Bickford Cottage Opco, LLC	KS	46-2768953
53.	Wabash Bickford Cottage Opco, LLC	KS	46-2814120
54.	Bickford of Crown Point, LLC	KS	30-0721538
55.	Bickford of Greenwood, LLC	KS	36-4727902
56.	Midland Bickford Cottage, L.L.C.	KS	20-1391576
57.	Saginaw Bickford Cottage, L.L.C.	KS	20-2279991
58.	Care YBE Subsidiary LLC	DE	26-2707189
59.	Bickford Master I, L.L.C.	KS	26-2419619
60.	Crawfordsville Bickford Cottage, L.L.C.	KS	48-1241154
61.	Moline Bickford Cottage, L.L.C.	KS	33-1005706
62.	Bickford at Mission Springs I, L.L.C.	KS	26-4072553
63.	Bickford at Mission Springs II, L.L.C.	KS	26-4072576
64.	Bickford of Overland Park, L.L.C.	KS	26-4072512
65.	Bickford at Mission Springs Opco I, LLC	KS	46-0875379
66.	Bickford at Mission Springs Opco II, LLC	KS	46-0875457
67.	Bickford of Overland Park Opco, LLC	KS	46-0875536
68.	Clinton Bickford Cottage, L.L.C.	KS	48-1231744
69.	Iowa City Bickford Cottage, L.L.C.	KS	48-1226171
70.	Lafayette Bickford Cottage, L.L.C.	KS	48-1241607
71.	Lansing Bickford Cottage, L.L.C.	KS	20-1879100
72.	Peoria Bickford Cottage, L.L.C.	KS	48-1225215
73.	Ames Bickford Cottage, L.L.C.	KS	48-1231747
74.	Bourbonnais Bickford House, L.L.C.	KS	48-1219534
75.	Burlington Bickford Cottage, L.L.C.	KS	48-1231746
76.	Fort Dodge Bickford Cottage, L.L.C.	KS	48-1231740
77.	Lincoln Bickford Cottage, L.L.C.	KS	48-1226172
78.	Marshalltown Bickford Cottage, L.L.C.	KS	48-1231748
79.	Muscatine Bickford Cottage, L.L.C.	KS	74-2816763
80.	Omaha II Bickford Cottage, L.L.C.	KS	48-1241690
81.	Quincy Bickford Cottage, L.L.C.	KS	48-1225212
82.	Rockford Bickford House, L.L.C.	KS	48-1219226
83.	Springfield Bickford House, L.L.C.	KS	48-1218519
84.	Urbandale Bickford Cottage, L.L.C.	KS	48-1241738

	Entity Name	Jurisdiction	FEIN
85.	JV Landlord-Battle Creek, LLC	DE	46-3630152
86.	JV Landlord-Clinton, LLC	DE	46-3642324
87.	JV Landlord-Iowa City, LLC	DE	46-3664081
88.	JV Landlord-Lansing, LLC	DE	46-3681804
89.	JV Landlord-Midland, LLC	DE	46-3684490
90.	JV Landlord-Peoria II, LLC	DE	46-3694970
91.	JV Landlord-Saginaw, LLC	DE	46-3707701
92.	JV Bickford Master Tenant, LLC	KS	46-4066080
93.	JV Landlord-Middletown, LLC	DE	47-1645800
94.	Bickford of Middletown, LLC	KS	47-1453917
95.	NHI-REIT of Seaside, LLC	DE	47-2561646

SCHEDULE 5.21(a)

LEASE PROPERTIES

Property	State
Butterfield Place	AR
Apple Blossom	AR
Bay Park	CA
Mistywood	CA
Fig Garden	CA
Hampshire	CA
Standiford Place	CA
Bridgecreek	CA
Camelot	CA
Riverplace	GA
River's Edge	GA
Iris Place	GA
Chateau De Boise	ID
Arbor Glen	IN
Nouveau Marc	LA
Yardley Commons	NJ
Worthington	OH
Silver Arrow Estates	OK
Astor House at Springbrook Oak	OR
Eagle Crest	SC
Westminster	SC
Bedford	WA
Kamlu Retirement Inn-Vancouver	WA
Orchard Park	WA
Garden Club	WA
Timberview	OR
Forest Grove	OR
Creswell	OR
Prestige at Autumn Wind	ID
Homestead Hills	NC
RidgeCrest	NC
The Lakes at Litchfield	SC
Summit Hills	SC
Brightwater	SC
Cascades Verdae	SC
Marsh’s Edge	GA
Osprey Village	FL

Also see Exhibit Aattached.

Property	State	Property	State
Grangeville Health and Rehabilitation Center	ID	Lake St. Charles Retirement Center	MO
Bickford ‐ Midland	MI	Colonial Hill Retirement Center	TN
Bickford ‐ Battle Creek	MI	Parkwood Retirement Apartments	TN
Bickford ‐ Lansing	MI	NHC HealthCare, Anniston	AL
Bickford ‐ Saginaw	MI	NHC HealthCare, Moulton	AL
Bickford ‐ Peoria	IL	Bayonet Point Health & Rehabiliatino Center (Hudson)	FL
Bickford ‐ Iowa City	IA	The Health Center of Merritt Island	FL
Bickford ‐ Lafayette	IN	The Health Center of Plant City	FL
Bickford ‐ Clinton	IA	Parkway Health & Rehabiliation Center (Stuart)	FL
Bickford‐Mission Springs	KS	NHC HealthCare, Glasgow	KY
Bickford‐Overland Park	KS	NHC Healthcare, Desloge	MO
Bickford‐Crown Point	IN	NHC Healthcare, Joplin	MO
Bickford‐Greenwood	IN	NHC Healthcare, Kennett	MO
Bickford‐Carmel	IN	NHC Healthcare, Maryland Heights	MO
Bickford‐Ames	IA	NHC HealthCare, St. Charles	MO
Bickford‐Bourbonnais	IL	NHC Healthcare, Anderson	SC
Bickford‐Burlington	IA	NHC Healthcare, Greenwood	SC
Bickford‐Crawfordsville	IN	NHC HealthCare, Laurens	SC
Bickford‐Ft. Dodge	IA	NHC Healthcare, Athens	TN
Bickford‐Lincoln	NE	NHC Healthcare, Chattanooga	TN
Bickford‐Marshalltown	IA	NHC HealthCare, Dickson	TN
Bickford‐Moline	IL	NHC HealthCare, Franklin	TN
Bickford‐Muscatine	IA	NHC Healthcare, Hendersonville	TN
Bickford‐Omaha Hickory	NE	NHC Healthcare, Johnson City	TN
Bickford‐Quincy	IL	NHC Healthcare, Lewisburg	TN
Bickford‐Rockford	IL	NHC HealthCare, McMinnville	TN
Bickford‐Springfield	IL	NHC HealthCare, Milan	TN
Bickford‐Urbandale	IA	NHC Healthcare, Oakwood	TN
Bickford‐Cedar Falls	IA	NHC HealthCare, Pulaski	TN
Bickford‐Grand Island	NE	NHC Healthcare, Scott	TN
Bickford‐Wabash	IN	NHC HealthCare, Sequatchie	TN
Gracewood Champlin	MN	NHC HealthCare, Smithville	TN
Gracewood Hugo	MN	NHC Healthcare, Somerville	TN
Gracewood Maplewood	MN	NHC Healthcare, Sparta	TN
Gracewood North Branch	MN	NHC HealthCare, Bristol	VA
Alvarado Parkway Institute	CA	Buckley HealthCare Center	MA
Ayers Health & Rehabilitation Center	FL	Holyoke Health Care Center	MA
Bear Creek Nursing Center	FL	John Adams HealthCare Center	MA
Brooksville Healthcare Center	FL	Longmeadow of Taunton	MA
Cypress Cove Care Center	FL	Maple Leaf HealthCare Center	NH
Heather Hill Healthcare Center	FL	Villa Crest HealthCare Center	NH
Royal Oak Nursing Center	FL	Epsom HealthCare Center	NH
Kentucky River Hospital	KY	Savannah Court & Cove (Palms at Maitland)	FL
North Okaloosa‐MOB	FL	Savannah Court & Cove (Place at WPB)	FL
Emeritus at Gilbert	AZ	Savannah Court of Bartow	FL
Emeritus at Glendale	AZ	Savannah Court of St. Cloud	FL
Emeritus at Tanque Verde	AZ	Savannah Court of Lakeland	FL
Emeritus at Tucson	AZ	Savannah Court of Lake Oconee	GA
Emeritus at Conway Place	SC	Sunny Ridge Center SLC	ID
Emeritus at Gallatin	TN	Estrella Center	AZ
Emeritus at Kingsport	TN	Canton	TX
Emeritus at Tullahoma	TN	Heritage Oaks	TX
Emeritus at Halcyon Village	OH	Heritage Place	TX
Pasadena‐MOB	TX	Richardson	TX
Indigo Palms‐ Maitland	FL	Winterhaven	TX
Paris	TX	Canton Oaks	TX
San Antonio	TX	Corinth Rehabilitation	TX
East Houston	TX	Orangeburg Nursing Home	SC
NW Houston	TX	Polaris Psychiatric & Rehab Hospital ‐ Murfreesboro	TN
Ennis	TX	Sante Silverdale NWL, CI, CM	WA
Greencrest	TX	Chancellor Loma Linda	CA
North Houston	TX	Dorian Place	OR
West Houston	TX	Wellsprings	OR
Kyle	TX	Indianhead	ID

West Monroe Arbors	LA	Charleston House	WI
Bossier Arbors	LA	Regency Pointe	AL
Bastrop Arbors	LA	Woodlands	MD
Minden Arbors	LA

SCHEDULE 5.21(b)

UNENCUMBERED LEASE PROPERTIES

Property	State
Butterfield Place	AR
Apple Blossom	AR
Bay Park	CA
Mistywood	CA
Fig Garden	CA
Hampshire	CA
Standiford Place	CA
Bridgecreek	CA
Camelot	CA
Riverplace	GA
River's Edge	GA
Iris Place	GA
Chateau De Boise	ID
Arbor Glen	IN
Nouveau Marc	LA
Yardley Commons	NJ
Worthington	OH
Silver Arrow Estates	OK
Astor House at Springbrook Oak	OR
Eagle Crest	SC
Westminster	SC
Bedford	WA
Kamlu Retirement Inn-Vancouver	WA
Orchard Park	WA
Garden Club	WA
Timberview	OR
Forest Grove	OR
Creswell	OR
Prestige at Autumn Wind	ID
Homestead Hills	NC
RidgeCrest	NC
The Lakes at Litchfield	SC
Summit Hills	SC
Brightwater	SC
Cascades Verdae	SC
Marsh’s Edge	GA
Osprey Village	FL

Also see Exhibit Aattached.

		Bayonet Point Health & Rehabiliatino Center (Hudson)	FL
		The Health Center of Merritt Island	FL
Bickford ‐ Lafayette	IN	The Health Center of Plant City	FL
		Parkway Health & Rehabiliation Center (Stuart)	FL
Bickford‐Mission Springs	KS	NHC HealthCare, Glasgow	KY
Bickford‐Overland Park	KS	NHC Healthcare, Desloge	MO
Bickford‐Crown Point	IN	NHC Healthcare, Joplin	MO
Bickford‐Greenwood	IN	NHC Healthcare, Kennett	MO
Bickford‐Carmel	IN	NHC Healthcare, Maryland Heights	MO
		NHC HealthCare, St. Charles	MO
		NHC Healthcare, Anderson	SC
		NHC Healthcare, Greenwood	SC
		NHC HealthCare, Laurens	SC
		NHC Healthcare, Athens	TN
		NHC Healthcare, Chattanooga	TN
		NHC HealthCare, Dickson	TN
		NHC HealthCare, Franklin	TN
		NHC Healthcare, Hendersonville	TN
		NHC Healthcare, Johnson City	TN
		NHC Healthcare, Lewisburg	TN
		NHC HealthCare, McMinnville	TN
		NHC HealthCare, Milan	TN
		NHC Healthcare, Oakwood	TN
		NHC HealthCare, Pulaski	TN
		NHC Healthcare, Scott	TN
Bickford‐Wabash	IN	NHC HealthCare, Sequatchie	TN
Gracewood Champlin	MN	NHC HealthCare, Smithville	TN
Gracewood Hugo	MN	NHC Healthcare, Somerville	TN
Gracewood Maplewood	MN	NHC Healthcare, Sparta	TN
Gracewood North Branch	MN	NHC HealthCare, Bristol	VA
Alvarado Parkway Institute	CA	Buckley HealthCare Center	MA
Ayers Health & Rehabilitation Center	FL	Holyoke Health Care Center	MA
Bear Creek Nursing Center	FL	John Adams HealthCare Center	MA
Brooksville Healthcare Center	FL	Longmeadow of Taunton	MA
Cypress Cove Care Center	FL	Maple Leaf HealthCare Center	NH
Heather Hill Healthcare Center	FL	Villa Crest HealthCare Center	NH
Royal Oak Nursing Center	FL	Epsom HealthCare Center	NH
Kentucky River Hospital	KY	Savannah Court & Cove (Palms at Maitland)	FL
North Okaloosa‐MOB	FL	Savannah Court & Cove (Place at WPB)	FL
Emeritus at Gilbert	AZ	Savannah Court of Bartow	FL
Emeritus at Glendale	AZ	Savannah Court of St. Cloud	FL
Emeritus at Tanque Verde	AZ	Savannah Court of Lakeland	FL
Emeritus at Tucson	AZ	Savannah Court of Lake Oconee	GA
Emeritus at Conway Place	SC	Sunny Ridge Center SLC	ID
Emeritus at Gallatin	TN	Estrella Center	AZ
Emeritus at Kingsport	TN	Canton	TX
Emeritus at Tullahoma	TN	Heritage Oaks	TX
Emeritus at Halcyon Village	OH	Heritage Place	TX
Pasadena‐MOB	TX	Richardson	TX
Indigo Palms‐ Maitland	FL	Winterhaven	TX
Paris	TX	Canton Oaks	TX
San Antonio	TX	Corinth Rehabilitation	TX
East Houston	TX	Orangeburg Nursing Home	SC
NW Houston	TX	Polaris Psychiatric & Rehab Hospital ‐ Murfreesboro	TN
Ennis	TX	Sante Silverdale NWL, CI, CM	WA
Greencrest	TX	Chancellor Loma Linda	CA
North Houston	TX	Dorian Place	OR
West Houston	TX	Wellsprings	OR
Kyle	TX	Indianhead	ID
West Monroe Arbors	LA	Charleston House	WI
Bossier Arbors	LA	Regency Pointe	AL
Bastrop Arbors	LA	Woodlands	MD
Minden Arbors	LA

SCHEDULE 10.1

EXISTING LIENS

1. Mortgages, Assignment of Leases and Rents, Security Agreement, Fixture Filing and related UCC Financing Statements filed in favor of Red Mortgage Capital, Inc. securing a Multi-Family Note in the original principal amount of $74,589,000 dated June 26, 2008, with respect to assets at the following facilities owned by Care YBE Subsidiary LLC:

Ames Bickford Cottage Bourbonnais Bickford House Burlington Bickford Cottage Crawfordsville Bickford Cottage Ft. Dodge Bickford Cottage Lincoln Bickford Cottage Marshalltown Bickford Cottage Moline Bickford Cottage Muscatine Bickford Cottage Omaha II Bickford Cottage Quincy Bickford Cottage Rockford Bickford House Springfield Bickford House Urbandale Bickford Cottage

2. Mortgages, Assignment of Leases and Rents, Security Agreement, Fixture Filing and related UCC Financing Statements filed in favor of Red Mortgage Capital, Inc. securing a Multi-Family Note in the original principal amount of $7,638,400 dated September 30, 2008, with respect to assets at the following facilities owned by Care YBE Subsidiary LLC:

Ames Bickford Cottage Bourbonnais Bickford House Burlington Bickford Cottage Crawfordsville Bickford Cottage Ft. Dodge Bickford Cottage Lincoln Bickford Cottage Marshalltown Bickford Cottage Moline Bickford Cottage Muscatine Bickford Cottage Omaha II Bickford Cottage Quincy Bickford Cottage Rockford Bickford House Springfield Bickford House Urbandale Bickford Cottage

3. Kansas UCC Financing Statements filed on Bickford Master I, L.L.C. in favor of Red Mortgage Capital, Inc. and Fannie Mae securing (a) a Multi-Family Note in the original principal amount of $74,589,000 dated June 26, 2008, and (b) a

Multi-Family Note in the original principal amount of $7,638,400 dated September 30, 2008.

RESIDENT MORTGAGES:

These mortgages were given to residents at four Senior Living Communities from 1998 to 2008. The purpose of the mortgages was to secure entrance fee refunds owed by the operator (not the landowner) to the residents. This practice was ceased in 2008. The mortgages place liens on the individual cottages (which is unplatted property in the vast majority of the mortgages). The total amount of the mortgages is shown below.

LITCHFIELD

1. Mortgage from Litchfield Retirement, LLC to Charles F. Kaufmann and E. Lenore Kaufmann, Trustee or their Successors in Trust, Under the Kaufmann Revocable Living Trust Under Trust dated November 25, 1998 and any amendments thereto, dated February 23, 2000 and recorded March 3, 2000 in Mortgage Book

1319 at Page 126; Subordination Agreement recorded March 3, 2000 in

Mortgage Book 1319, at Page 133.

2. Mortgage from Litchfield Retirement, LLC to Frances Drexel dated February 23, 2000 and recorded March 3, 2000 in Mortgage Book 1319, at Page 170; Subordination Agreement recorded March 3, 2000 in Mortgage Book 1319, at Page 177.

3. Mortgage from Litchfield Retirement, LLC to Joseph M. Blue and Eileen R. Blue dated February 23, 2000 and recorded March 3, 2000 in Mortgage Book 1319 at Page 225; Subordination Agreement recorded March 3, 2000 in Mortgage Book 1319, at Page 232.

4. Mortgage from Litchfield Retirement, LLC to Jane F. Heckman dated February 23, 2000 and recorded March 3, 2000 in Mortgage Book 1319, at Page 258; Subordination Agreement recorded March 3, 2000 in Mortgage Book 1319, at Page 265.

5. Mortgage from Litchfield Retirement, LLC to Dorothy Nichols dated February 23, 2000 and recorded March 3, 2000 in Mortgage Book 1319 at Page 291; Subordination Agreement recorded March 3, 2000 in Mortgage Book 1319, at Page 298.

6. Mortgage from Litchfield Retirement, LLC to Helen H. Hequembourg dated August 22, 2000 and recorded October 2, 2000 in Mortgage Book 1398 at Page

89; Subordination Agreement recorded October 2, 2000 in Mortgage Book 1398,

at Page 97.

7. Mortgage from Litchfield Retirement, LLC to Richard L. Geller and Edna B. Geller dated September 11, 2000 and recorded October 2, 2000 in Mortgage Book

1398, at Page 114; Subordination Agreement recorded October 2, 2000 in

Mortgage Book 1398, at Page 122.

8. Mortgage from Litchfield Retirement, LLC to David R. Hallenbeck, Trustee dated January 9, 2002, and recorded March 20, 2002 in Mortgage Book 1702, at Page

279; Corrective Mortgage recorded June 3, 2002 in Mortgage Book 1748, at Page 10; Subordination Agreement recorded July 19, 2002, in Mortgage Book 1778, at Page 7.

9. Mortgage from Litchfield Retirement, LLC to Joseph M. Oppenheim and Jo Ruth Oppenheim dated December 3, 2001, and recorded June 3, 2002, in Mortgage

Book 1748, at Page 17; Subordination Agreement recorded August 2, 2002 in

Mortgage Book 1788, at Page 302.

10. Mortgage from Litchfield Retirement, LLC to William S. Sloatman and Dorothy Sloatman dated April 24, 2001 and recorded August 2, 2002 in Mortgage Book

1789, at Page 1; Subordination Agreement recorded August 2, 2002 in Mortgage

Book 1789, at Page 8.

11. Mortgage from Litchfield Retirement, LLC to James M. Smith and Mary Anne Smith dated December 4, 2002, and recorded December 10, 2002 in Mortgage

Book 1898, at Page 234; Subordination Agreement recorded January 7, 2003 in

Mortgage Book 1921, at Page 230.

12. Mortgage from Litchfield Retirement, LLC to Don C. Bigby dated June 6, 2003 and recorded June 9, 2003 in Mortgage Book 2057, at Page 106; Subordination

Agreement recorded June 19, 2003 in Mortgage Book 2067, at Page 202.

13. Mortgage from Litchfield Retirement, LLC to Jack Keefe, III and Elizabeth R. Keefe dated June 23, 2003 and recorded June 23, 2003 in Mortgage Book 2070, at Page 170; Subordination Agreement recorded June 30, 2003 in Mortgage Book 2078, at Page 136.

14. Mortgage from Litchfield Retirement, LLC to Lee Troostwyk and Joan M. Troostwyk dated September 1, 2004 and recorded September 13, 2004 in Mortgage Book 2441, at Page 322; Subordination Agreement recorded September 27, 2004 in Mortgage Book 2451, at Page 263.

15. Mortgage from Litchfield Retirement, LLC to John P. Miller and Barbara C. Miller dated September 1, 2004 and recorded September 13, 2004 in Mortgage Book

2441, at Page 329; Subordination Agreement recorded September 27, 2004 in

Mortgage Book 2451, at Page 259.

16. Mortgage from Litchfield Retirement, LLC to Guy E. Alling and Barbara W. Alling dated November 2, 2004 and recorded November 3, 2004 in Mortgage Book

2478, at Page 140; Subordination Agreement recorded February 3, 2005 in

Mortgage Book 2536, at Page 121.

17. Mortgage from Litchfield Retirement, LLC to Greta Ferri dated January 6, 2005 and recorded January 6, 2005 in Mortgage Book 2519, at Page 4; Subordination

Agreement recorded February 3, 2005 in Mortgage Book 2536, at Page 125.

18. Mortgage from Litchfield Retirement, LLC to Dorothy I. Kamlinskas dated August 22, 2006 and recorded August 25, 2005 in Mortgage Book 2704, at Page 1; Subordination Agreement recorded September 15, 2005 in Mortgage Book 2724, at Page 220.

19. Mortgage from Litchfield Retirement, LLC to Clifford D. Cannon and Jewel B. Cannon recorded November 4, 2005 in Mortgage Book 2783, at Page 79; as affected by Subordination Agreement by Carolina First Bank recorded November 15, 2005 in Mortgage Book 2793, at Page 67.

20. Mortgage from Litchfield Retirement, LLC to William E. Johnston and Carolyn W. Johnston recorded November 17, 2005 in Mortgage Book 2796, at Page 8; as affected by Subordination Agreement by Carolina First Bank recorded November 30, 2005 in Mortgage Book 2809, at Page 135.

21. Mortgage from Health Care REIT, Inc. to Herbert and Fay Harris recorded February 28, 2006, in Mortgage Book 2881, at Page 261.

22. Mortgage from Health Care REIT, Inc. to Helen Boone recorded May 17, 2006, in Mortgage Book 20, at Page 252.

23. Mortgage from Health Care REIT, Inc. to John and Margaret Smith recorded May 17, 2006, in Mortgage Book 20, at Page 259.

24. Mortgage from Health Care REIT, Inc. to Louis Ehrich, recorded July 21, 2006, in Mortgage Book 116, at Page 333.

25. Mortgage from Health Care REIT, Inc. to Leota Agett, recorded August 16, 2006, in Mortgage Book 154, at Page 303; as affected by Assignment recorded May 14, 2007, in Mortgage Book 510, at Page 84.

26. Mortgage from Health Care REIT, Inc. to Virginia Hueftle, recorded August 31, 2006, in Mortgage Book 174, at Page 321.

27. Mortgage from Health Care REIT, Inc. to Lorin and Ellen Mason, recorded September 28, 2006, in Mortgage Book 210, at Page 56.

28. Mortgage from Health Care REIT, Inc. to Thomas and June Turner, recorded January 19, 2007, in Mortgage Book 347, at Page 128.

29. Mortgage from Health Care REIT, Inc. to Everett and Mildred Wigington, recorded February 7, 2007, in Mortgage Book 375, at Page 277.

30. Mortgage from Health Care REIT, Inc. to Lurline Stedman, recorded April 6, 2007, in Mortgage Book 462, at Page 28.

31. Mortgage from Health Care REIT, Inc. to James and Eulalie Fenhagen, recorded May 14, 2007, in Mortgage Book 557, at Page 206.

32. Mortgage from Health Care REIT, Inc. to Edward and Mary Talbot, recorded June 14, 2007, in Mortgage Book 557, at Page 215; as affected by Assignment recorded May 20, 2009, in Mortgage Book 1240 at Page 199; as affected by Assignment recorded May 20, 2009, in Mortgage Book 1240 at Page 201; and as affected by Assignment recorded May 20, 2009, in Mortgage Book 1240 at Page 203.

33. Mortgage from Health Care REIT, Inc. to Mary Lee Moore, recorded January 14, 2008, in Mortgage Book 818, at Page 164.

34. Mortgage from Health Care REIT, Inc. to Robert and Betty Kilgore, recorded May 2, 2008, in Mortgage Book 938, at Page 294.

SUMMIT HILLS

1. Mortgage from Summit Hills, LLC to Julia W. Smith, recorded September 6, 2002, in Mortgage Book 2769, Page 991, said Register of Deeds (affects Lot 12).

2. Mortgage from Summit Hills, LLC, et al, to Joan B. Gibson, dated October 24, 2005, and recorded October 25, 2005, in Mortgage Book 3542, Page 792, Instrument No. MTG-2005-55571, said Register of Deeds (affects Lot 14).

3. Mortgage from Summit Hills, LLC to James Widenhouse and Margaret Widenhouse, recorded September 6, 2002, Mortgage Book 2770, Page 1, said Register of Deeds (affects Lot 21).

4. Mortgage from Summit Hills, LLC, to Margaret P. Pond, dated January 22, 1999, and recorded March 22, 1999, in Mortgage Book 2185, Page 836, said Register of Deeds (affects Lot 22).

5. Mortgage from Summit Hills, LLC, to Hugh D. Dorsey and Kate S. Dorsey, dated April 22, 1999, and recorded June 8, 1999, in Mortgage Book 2217, Page 661, said Register of Deeds. A one-half interest in said Mortgage was assigned to The Hugh D. Dorsey Bypass Trust U/W/O Hugh D. Dorsey, recorded April 15, 2002, in Mortgage Book 2686, Page 791, said Register of Deeds (affects Lot 26).

6. Mortgage from Summit Hills, LLC to Ernesta DeFilippis, recorded September 6, 2002, Mortgage Book 2769, Page 984, said Register of Deeds (affects Lot 26).

7. Mortgage from Summit Hills, et al, to Lula E. Day, recorded July 7, 2004, in Mortgage Book 3260, Page 362, Instrument No. MTG-2004-34836, said Register of Deeds (affects Lot 28).

8. Mortgage from Summit Hills, et al, to Hugh M. Caldwell and Daisy R. Caldwell, recorded April 26, 2005, in Mortgage Book 3429, Page 496, Instrument No. MTG-2005-20707, said Register of Deeds (affects Lot 36).

9. Mortgage from Summit Hills, LLC to Robert T. Estes, recorded January 16, 2001, Mortgage Book 2425, Page 272, said Register of Deeds (affects Lot 37).

10. Mortgage from Summit Hills, LLC to Amelia Ruth Ragis, recorded October 21, 2002, Mortgage Book 2801, Page 254; as assigned by Assignment from Amelia Ruth Ragis to the Amelia R. Ragis Trust dated August 28, 1991, as Amended and Restated, said Assignment recorded in Mortgage Book 3338, Page 91, said Register of Deeds (affects Lot 75).

11. Mortgage from Summit Hills, LLC to Frank A. Lyles and Florine F. Lyles, recorded October 30, 2003, in Mortgage Book 3106, Page 777, Instrument No. MTG-2003-69502, said Register of Deeds (affects Lot 82).

12. Mortgage from Summit Hills, LLC to Martha Cloud Chapman, recorded March 4, 2002, Mortgage Book 2657, Page 953, said Register of Deeds (affects Lot 85).

13. Mortgage from Summit Hills, LLC to Barbara B. Sweeney, recorded January 24, 2003, Mortgage Book 2866, Page 513, Instrument No. MTG-2003-1714, said Register of Deeds (affects Lot 88); assigned to Barbara B. Sweeney, as Trustee,

and successor Trustees, under the Barbara B. Sweeney Revocable Trust dated March 24, 1998, by Assignment to Revocable Trust of Promissory Note Mortgage dated June 1, 2006, and recorded June 8, 2006, in Mortgage Book 3678, Page 754, said Register of Deeds.

14. Mortgage from Summit Hills, LLC to Sara F. Berry, recorded August 14, 2001, Mortgage Book 2539, Page 614; as assigned by Assignment of Note and Mortgage from Sara F. Berry to Sara F. Berry, as Trustee of the Sara F. Berry Revocable Trust U/A dated May 16, 2005, said Assignment recorded in Mortgage Book 3442, Page 543, said Register of Deeds (affects Lot 132).

15. Mortgage from Summit Hills, et al, to Phyllis D. Abele, recorded September 19, 2005, in Mortgage Book 3520, Page 136, Instrument No. MTG-2005-48171, said Register of Deeds (affects Lot 54, Section Three); assigned to Phyllis B. Abele, Trustee of the Phyllis B. Abele Revocable Trust U/A dated October 31, 2007, by Assignment of Note and Mortgage dated October 31, 2007, and recorded November 1, 2007, in Mortgage Book 3991, Page 293, said Register of Deeds.

16. Mortgage from Summit Hills, LLC to Paul B. and Jean M. McGraw, dated July 31, 2007, and recorded August 15, 2007, in Mortgage Book 3947, Page 524, Register of Deeds for Spartanburg County, South Carolina (Lot 57, Section Three); assigned to Jean M. McGraw and Paul B. McGraw, as Co-Trustees, and successors Trustees, under the Jean M. McGraw Revocable Trust dated May 21, 2008, by Assignment to Revocable Trust of Promissory Note and Mortgage, dated May 21, 2008, and recorded May 30, 2008, in Mortgage Book 4092, Page 221, said Register of Deeds.

17. Mortgage from Summit Hills, LLC to Floyd A. and Irene M. Layman, dated April 5, 2007, and recorded April 6, 2007, in Mortgage Book 3867, Page 103, Register of Deeds for Spartanburg County, South Carolina (Lot 39, Section Three).

18. Mortgage from Summit Hills, LLC to Ralph and Rosaline B. Gillespie, dated May 17, 2007, and recorded June 1, 2007, in Mortgage Book 3901, Page 798, said Register of Deeds (Lot 81, Section Three).

19. Mortgage from Summit Hills, LLC to B. Nolen & Barbar A. Suddeth, dated May 22, 2007, and recorded June 18, 2007, in Mortgage Book 3911, Page 343, said Register of Deeds (Lot 23).

20. Mortgage from Summit Hills, LLC to Lou M. & Mary Ann Schulze, dated June 28, 2007, and recorded July 5, 2007, in Mortgage Book 3923, Page 208, said Register of Deeds (Lot 20).

21. Mortgage from Summit Hills, LLC to Virginia L. Herrin, dated August 28, 2007, and recorded September 27, 2007, in Mortgage Book 3972, Page 546, said Register of Deeds (Lot 4), as amended by that certain Assignment recorded October 6, 2008 in Mortgage Book 4143, Page 32, said Register of Deeds.

22. Mortgage from Summit Hills, LLC to Jean Page and Lawrence E. Middlebrooks, dated October 26, 2007, and recorded November 6, 2007, in Mortgage Book

3993, Page 386, said Register of Deeds (Lot 18).

23. Mortgage from Summit Hills, LLC to Wayne A. and Gerald Jean Diehl, dated January 7, 2008, and recorded January 15, 2008, in Mortgage Book 4024, Page 295, said Register of Deeds (Lot 56, Section Three); as assigned pursuant to that certain Assignment recorded June 12, 2014, in Mortgage Book 4866 at Page 209, said Register of Deeds.

24. Mortgage from Summit Hills, LLC to Adrian P. and Edith E. O'Neal dated February 5, 2008, and recorded February 7, 2008, in Mortgage Book 4034, Page 651, said Register of Deeds (Lot 76, Section Three).

25. Mortgage from Summit Hills, LLC to Thomas W. and Marianne E. Bartram, dated April 2, 2008, and recorded April 14, 2008, in Mortgage Book 4068, Page 629, said Register of Deeds (Lot 89, Section Three).

26. Mortgage from Summit Hills, LLC to Elizabeth C. and Louise M. Weld, dated April 17, 2008, and recorded April 18, 2008, in Mortgage Book 4070, Page 793, said Register of Deeds (Lot 94, Section Three).

27. Mortgage from Summit Hills, LLC to Fred B. Oates, dated April 22, 2008, and recorded April 29, 2008, in Mortgage Book 4076, Page 288, said Register of

Deeds (Lot 19).

28. Mortgage from Summit Hills, LLC to Dr. Edwin and Kathleen Wilde, dated April 30, 2008, and recorded May 7, 2008, in Mortgage Book 4081, Page 534, Register of Deeds for Spartanburg County, South Carolina (Lot 31, Section Three).

29. Mortgage from Summit Hills, LLC to Barbara B. Lee, dated April 18, 2008, and recorded May 15, 2008, in Mortgage Book 4085, Page 373, said Register of Deeds (Lot 77, Section Three).

30. Mortgage from Summit Hills, LLC to Dr. Aubrey D. and Jane J. Gantt, dated May 16, 2008, and recorded June 9, 2008, in Mortgage Book 4095, Page 980, said Register of Deeds (Lot 9).

31. Mortgage given by Summit Hills, LLC, et al to Theodore W. Gage and Betty O. Gage, dated June 15, 2006, and recorded June 16, 2006, in Mortgage Book 3683, Page 991, Register of Deeds for Spartanburg County, South Carolina, as assigned pursuant to that certain Assignment recorded December 8, 2010, in Mortgage Book 4416, Page 527, said Register of Deeds.

32. Mortgage given from Summit Hills, LLC, et al to Robert C. and Evelyn M. Bungarz, dated July 27, 2006, and recorded August 31, 2006, in Mortgage Book 3737, Page 129, said Register of Deeds (Lot 79, Section Three).

33. Mortgage given by Summit Hills, LLC, et al to David A. Fort, dated June 28, 2006, and recorded August 31, 2006, in Mortgage Book 3737, Page 137, said Register of Deeds (Lot 77, Section Three).

34. Mortgage from Summit Hills, LLC, et al to James H. and Gloria White, dated August 1, 2008 and recorded August 5, 2008, in Mortgage Book 4120, Page 401, said Register of Deeds (Lot 3).

35. Mortgage from Summit Hills, LLC, et al to Leonard Tim and Peggy H. Brackett, dated August 22, 2008, and recorded August 22, 2008, in Mortgage Book 4126, Page 939, said Register of Deeds (Lot 46, Section 3).

HOMESTEAD HILLS

1. Deed of Trust for Ruth Woodruff recorded in Book 1972, Page 2568, Forsyth County Registry; and Occupancy Agreement recorded in Book 1972, Page 2549, Forsyth County Registry; as affected by Substitution of Trustee recorded in Book 3073, Page 2511; as assigned in Book 3073, Page 2513.

2. Deed of Trust for Robert R. Triplette and wife, Bertha C. Triplette recorded in Book 2085, Page 4355, Forsyth County Registry; and Occupancy Agreement recorded in Book 2085, Page 4337, Forsyth County Registry.

3. Deed of Trust for John W. Athan, Jr. and wife, Doris T. Athan recorded in Book 2085, Page 4404, Forsyth County Registry; and Occupancy Agreement recorded in Book 2085, Page 4385, Forsyth County Registry.

4. Deed of Trust for Elaine F. Lyerly recorded in Book 2101, Page 2546, Forsyth County Registry; and Occupancy Agreement recorded in Book 2101, Page 2526, Forsyth County Registry.

5. Deed of Trust for B.E. and Dorothy H. Mendenhall recorded in Book 2102, Page 1994, Forsyth County Registry, as assigned in Book 2137, page 464, Forsyth County Registry; and Occupancy Agreement recorded in Book 2102, Page 1975, Forsyth County Registry.

6. Deed of Trust for Gordon B. Hughes and wife, Virginia L. Hughes recorded in Book 2120, Page 1499, Forsyth County Registry; and Occupancy Agreement recorded in Book 2120, Page 1481, Forsyth County Registry.

7. Deed of Trust for Luther N. and Pauline H. Butner recorded in Book 2128, Page 2057, Forsyth County Registry; and Occupancy Agreement recorded in Book 2128, Page 2038, Forsyth County Registry.

8. Deed of Trust for Donald S. Gaither and wife, Carolyn W. Gaither recorded in Book 2130, Page 3103, Forsyth County Registry; and Occupancy Agreement recorded in Book 2130, Page 3124, Forsyth County Registry.

9. Deed of Trust for Camel Jackson Porter, Jr. and wife, Foy Claudine Porter recorded in Book 2134, Page 349, Forsyth County Registry.

10. Deed of Trust for Ruby C. Pulliam recorded in Book 2145, Page 1343, Forsyth County Registry.

11. Deed of Trust for Alton T. Wheeler and wife, Mary N. Wheeler recorded in Book 2161, Page 3314, Forsyth County Registry.

12. Deed of Trust for James H. McGrath and wife, Catharine C. McGrath recorded in Book 2195, Page 1378, Forsyth County Registry.

13. Deed of Trust for Sally S. Bost recorded in Book 2226, Page 749, Forsyth County Registry.

14. Deed of Trust for Robert George Clayton and wife, Sudie Hanes Clayton recorded in Book 2240, Page 906, Forsyth County Registry.

15. Deed of Trust for Dovie A. Blakely and Erma Blakely recorded in Book 2360, Page 2900, Forsyth County Registry; and Occupancy Agreement recorded in Book 2360, Page 2879, Forsyth County Registry.

16. Deed of Trust for T.D. Flack, Jr. and wife Hazel W. Flack recorded in Book 2416, Page 2203, Forsyth County Registry; and Occupancy Agreement recorded in Book 2416, Page 2183, Forsyth County Registry.

17. Deed of Trust for Rachel D. Marley recorded in Book 2488, Page 4082, Forsyth County Registry; and memorandum of Occupancy Agreement recorded in Book 2488, Page 4090, Forsyth County Registry.

18. Deed of Trust for M. Paul and Marlan S. Sloan recorded in Book 2491, Page 216, Forsyth County Registry.

19. Deed of Trust for Howard H. and Elizabeth G. Arnold recorded in Book 2527, Page 1738, Forsyth County Registry.

20. Deed of Trust for Robert E. and Alice H. Webb recorded in Book 2580, Page 2348, Forsyth County Registry; as assigned and modified in Book 2661, Page 4049, Forsyth County Registry.

OSPREY VILLAGE, FL

1. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$214,735.50, executed by Osprey Village at Amelia Island, Ltd. in favor of Nancy

A.Brooks, recorded May 28, 1998 in Official Records Book 835, Page 609, as re-recorded in Official Records Book 845, Page 1110.

2. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$233,554.00, executed by Osprey Village at Amelia Island, Ltd. in favor of Joe Richardson, recorded August 20, 1998 in Official Records Book 845, Page 1117, as assigned by Assignment of Mortgage recorded in Official Records Book 914, Page 1688.

3. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$208,638.00, executed by Osprey Village at Amelia Island, Ltd. in favor of William E. and Margaretta Schroeder, recorded August 20, 1998 in Official Records Book 845, Page 1124.

4. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$185,305.50, executed by Osprey Village at Amelia Island, Ltd. in favor of Thomas and Lucille Connell, recorded August 20, 1998 in Official Records Book 845, Page 1131.

5. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$168,177.00, executed by Osprey Village at Amelia Island, Ltd. in favor of

William S. and Marie L. Cashel, recorded September 25, 1998 in Official Records Book 850, Page 587, as assigned by Assignment of Mortgage and Security Agreement recorded in Official Records Book 1160, Page 1698.

6. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$222,687.00, executed by Osprey Village at Amelia Island, Ltd. in favor of Gustav and Nancy Ehrman, recorded February 16, 1999 in Official Records Book 868, Page 246.

7. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$235,359.00, executed by Osprey Village at Amelia Island, Ltd. in favor of Graydon and Eleanor Hall, recorded April 26, 1999 in Official Records Book 880, Page 754.

8. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$247,414.00, executed by Osprey Village at Amelia Island, Ltd. in favor of Dena Gray Short Marshall, recorded May 4, 1999 in Official Records Book 881, Page 906.

9. Mortgage in the original principal amount of $230,116.00, executed by Osprey Village at Amelia Island, Ltd. in favor of L. Victor and Jean I. Haines, recorded May 4, 1999 in Official Records Book 881, Page 985, as assigned by Assignment of Mortgage and Security Agreement to Jean I. Haines Revocable Trust dated September 16, 2009 recorded in Official Records Book 1641, Page 1848.

10. Mortgage in the original principal amount of $206,499.00 , executed by Osprey Village at Amelia Island, Ltd. in favor of Ruth and Rosco Mausicano, recorded May 21, 1998 in Official Records Book 834, Page 1521, as re-recorded in Official Records Book 845, Page 1103; as assigned by Assignment of Note, Mortgage and Occupancy Agreement to J. Curtis Hyers, Successor Trustee of the Living Trust of Rocco N. Marsicano dated April 10, 1990 recorded in Official Records Book 1860, Page 20 and as assigned to the Edward Farrell Marsicano Scholarship Fund and St. Michaels Academy Scholarship Fund recorded in Official Records Book 1860, Page 22.

11. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$179,022.00, executed by Osprey Village at Amelia Island, Ltd. in favor of Charles E. and Rhine Blackford, recorded July 6, 1999 in Official Records Book 889, Page 1830.

12. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$283,453.00, executed by Osprey Village at Amelia Island, Ltd. in favor of Beatrice Downling, recorded July 21, 1999 in Official Records Book 892, Page 226, as assigned to Beatrice S. Dowling, Trustee of the Beatrice S. Dowling Trust dated August 20, 1993, as amended, recorded in Official Records Book 1222, Page 1590.

13. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$273,537.00, executed by Osprey Village at Amelia Island, Ltd. in favor of Anne

S. Boss, recorded August 16, 1999 in Official Records Book 895, Page 619, as amended by Assignment of Rights recorded in Official Records Book 925, Page 511.

14. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$250,200.00, executed by Osprey Village at Amelia Island, Ltd. in favor of Jean

M. Ferguson as Trustee of the Ferguson Living Trust dated June 12, 1995, recorded September 2, 1999 in Official Records Book 898, Page 267.

15. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$315,848.00, executed by Osprey Village at Amelia Island, Ltd. in favor of Don and Jane MacIntyre, recorded November 3, 1999 in Official Records Book 906, Page 974, as assigned by Assignment of Mortgage and Security Agreement recorded in Official Records Book 1116, Page 1632.

16. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$251,904.00, executed by Osprey Village at Amelia Island, Ltd. in favor of Martha Aderson/Claire Lipinsky, recorded December 10, 1999 in Official Records Book 913, Page 1239.

17. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$200,317.00, executed by Osprey Village at Amelia Island, Ltd. in favor of James Sommers Smith, a married man, recorded December 30, 1999 in Official Records Book 913, Page 1262.

18. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$235,558.00, executed by Osprey Village at Amelia Island, Ltd. in favor of Robert

J. and Lillian S. Berkshire, recorded April 4th, 2000 in Official Records Book 927, Page 20.

19. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$272,938.00, executed by Osprey Village at Amelia Island, Ltd. in favor of Edward M. and Eleanor A. Dodd, recorded April 25, 2000 in Official Records Book 929, Page 1527, as re-recorded in Official Records Book 942, Page 1855.

20. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$237,025.00, executed by Osprey Village at Amelia Island, Ltd. in favor of James

G. and Muriel W. Van Horn, husband and wife, recorded May 19, 2000 in Official Records Book 933, Page 16.

21. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$285,996.00, executed by Osprey Village at Amelia Island, Ltd. in favor of John

S. and Barbara W. Webster, husband and wife, recorded August 29, 2000 in Official Records Book 947, Page 462.

22. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$298,535.00, executed by Osprey Village at Amelia Island, Ltd. in favor of Allan

W. Comrie and Margaret C. Comrie as Co-Trustees of the Allan W. Comrie Living Trust dated November 17, 1998, recorded September 21, 2000 in Official

Records Book 950, Page 1068.

23. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$276,539.00, executed by Osprey Village at Amelia Island, Ltd. in favor of Anthony Jr. and Caroline B. Morse, recorded November 15, 2000 in Official Records Book 958, Page 885.

24. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$215,747.00, executed by Osprey Village at Amelia Island, Ltd. in favor of Richard C. and Anne P. Tomlina, husband and wife, recorded January 24, 2001 in Official Records Book 967, Page 1967, re-recorded Official Records Book 981, Page 1001.

25. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$354,126.00, executed by Osprey Village at Amelia Island, Ltd. in favor of Jean

G. and Clyde M. Noll, wife and husband, recorded February 5, 2001 in Official Records Book 969, Page 833.

26. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$293,288.00, executed by Osprey Village at Amelia Island, Ltd. in favor of Audrey S. and Wilson F. Fowle II, wife and husband, recorded April 18, 2001 in Official Records Book 981, Page 1809.

27. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$283,712.00, executed by Osprey Village at Amelia Island, Ltd. in favor of David

J. and Nelda T. Sherwood, husband and wife, recorded June 15, 2001 in Official Records Book 992, Page 525.

28. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$280,800.00, executed by Osprey Village at Amelia Island, Ltd. in favor of Herbert W. and Alice F. Owen, husband and wife, recorded August 20, 2001 in Official Records Book 1003, Page 1835.

29. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$308,748.00, executed by Osprey Village at Amelia Island, Ltd. in favor of Roger

P. and Ann Marie Conant, husband and wife, recorded August 21, 2001 in Official Records Book 1004, Page 320.

30. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$292,989.00, executed by Osprey Village at Amelia Island, Ltd. in favor of John

G. and Ann L. Rodgers, his wife, recorded October 11, 2001 in Official Records Book 1012, Page 1557.

31. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$325,247.00, executed by Osprey Village at Amelia Island, Ltd. in favor of Sally

W. and Robert A. Marshall, wife and husband, recorded February 15, 2002 in Official Records Book 1037, Page 1830.

32. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$293,400.00, executed by Osprey Village at Amelia Island, Ltd. in favor of Robert

B. and Harriet M. Zimmerlie, recorded November 15, 2001 in Official Records Book 1019, Page 1196.

33. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$308,474.00, executed by Osprey Village at Amelia Island, Ltd. in favor of Walter

J. and Patricia M. Fonti, husband and wife, recorded January 17, 2002 in Official Records Book 1031, Page 1136.

34. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$315,764.00, executed by Osprey Village at Amelia Island, Ltd. in favor of

Pamela L. Bartoletti, recorded May 23, 2002 in Official Records Book 1057, Page 1172.

35. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$311,849.10, executed by Osprey Village at Amelia Island, Ltd. in favor of Robert Elmer and Helen Elmer, husband and wife, recorded November 20, 2002 in Official Records Book 1095, Page 1304.

36. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$302,139.96, executed by Osprey Village at Amelia Island, Ltd. in favor of Eliot and Nan Putnam, husband and wife, recorded December 31, 2002 in Official Records Book 1104, Page 507.

37. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$313,200.00, executed by Osprey Village at Amelia Island, Ltd. in favor of Robert and Madeline Lane, husband and wife, recorded December 31, 2002 in Official Records Book 1104, Page 515.

38. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$340,544.00, executed by Osprey Village at Amelia Island, Ltd. in favor of David and Dorothy Reid, recorded July 22, 2003 in Official Records Book 1152, Page 1429.

39. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$303,277.00, executed by Osprey Village at Amelia Island, Ltd. in favor of Patricia C. Wymare, recorded July 30, 2003 in Official Records Book 1157, Page 1697.

40. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$382,887.47, executed by Osprey Village at Amelia Island, Ltd. et al. in favor of John and Peggy Nolan, recorded November 17, 2003 in Official Records Book 1188, Page 1514.

41. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$355,500.00, executed by Osprey Village at Amelia Island, Ltd. et al. in favor of Wallace and Dorothy Mathe, recorded February 11, 2004 in Official Records Book 1207, Page 990.

42. Mortgage    and    Security    Agreement    in    the    original    principal    amount    of

$337,877.34, executed by Osprey Village at Amelia Island, Ltd. et al. in favor of Robert and Helen (unreadable), recorded April 12, 2004 in Official Records Book 1221, Page 1270.

43. Mortgage in the original principal amount of $250,481.54, executed by Osprey Village at Amelia Island, Ltd., a Florida limited liability company et al. in favor of The Trust u/w/o Helen I. Coolidge dated May 9, 1979 whose trustees are Thomas R. Coolidge and Susan L. Coolidge, recorded June 29, 2004 in Official Records Book 1241, Page 1761.

44. Mortgage in the original principal amount of $277,785.90, executed by Osprey Village at Amelia Island, Ltd., a Florida limited liability company et al. in favor of William J. Clower and Irene B. Clower, recorded July 1, 2004 in Official Records Book 1242, Page 1178.

45. Mortgage in the original principal amount of $348,300.00, executed by Osprey Village at Amelia Island, Ltd., a Florida limited liability company et al. in favor of Eleanor R. Beaty, recorded November 9, 2004 in Official Records Book 1272, Page 1188.

46. Mortgage in the original principal amount of $357,668.57, executed by Osprey Village at Amelia Island, Ltd., a Florida limited liability company et al. in favor of Henry T. Eaton and Phyllis E. Eaton Trust, recorded January 5, 2005 in Official Records Book 1285, Page 1346.

47. Mortgage in the original principal amount of $316,237.50, executed by Osprey Village at Amelia Island, Ltd., a Florida limited liability company et al. in favor of James R. Maim and Constance B. Maim, recorded May 20, 2005 in Official Records Book 1318, Page 1715, As assigned by Assignment to James R. Maim and Constance B. Maim as co-trustees of the James R. Maim and Constance B. Maim Joint Revocable Trust dated April 25, 2005 recorded in Official Records Book 1381, Page 211.

48. Mortgage in the original principal amount of $347,238.00, executed by Osprey Village at Amelia Island, Ltd., a Florida limited liability company et al. in favor of William A. McAllister, Jr. and Carol D. McAllister, recorded July 11, 2005 in Official Records Book 1331, Page 1870.

49. Mortgage in the original principal amount of $513,525.00, executed by Health Care REIT, Inc., Osprey Village at Amelia Island, Ltd., Florida limited liability company et al. in favor of Howard Ezell and Marilyn Ezell, recorded March 27, 2007 in Official Records Book 1488, Page 353.

50. Mortgage in the original principal amount of $347,238.00, executed by Health Care REIT, Inc., Osprey Village at Amelia Island, Ltd., Florida limited liability company et al. in favor of William H. Galbraith, Jr. and Irene S. Galbraith, recorded February 22, 2006 in Official Records Book 1390, Page 1873.

51. Mortgage in the original principal amount of $360,738.00, executed by Health Care REIT, Inc., Osprey Village at Amelia Island, Ltd., Florida limited liability company et al. in favor of Martin C. Peterson and Madelyn Peterson, recorded February 22, 2006 in Official Records Book 1390, Page 1843.

52. Mortgage in the original principal amount of $330,786.00, executed by Health Care REIT, Inc., Osprey Village at Amelia Island, Ltd., Florida limited liability company et al. in favor of Amelia Island, Ltd et. al. to John Puckett, Jr. and Winifred Puckett, recorded December 18, 2006 in Official Records Book 1466, Page 208.

53. Mortgage in the original principal amount of $472,280.00, executed by Health Care REIT, Inc., Osprey Village at Amelia Island, Ltd., Florida limited liability company et al. in favor of Gaston Denoyers & Helenenoyers, recorded March 16, 2006 in Official Records Book 1396, Page 1245.

54. Mortgage in the original principal amount of $376,609.50, executed by Health Care REIT, Inc., Osprey Village at Amelia Island, Ltd., Florida limited liability

company et al. in favor of Thomas H. Clynes & Ruth S. Clynes, recorded March 16, 2006 in Official Records Book 1396, Page 1258.

55. Mortgage in the original principal amount of $302,400.00, executed by Health Care REIT, Inc., Osprey Village at Amelia Island, Ltd., Florida limited liability company et al. in favor of George S. Patrick, Eugenia M. Patrick, Peter Burnette and Olivia Burnette, recorded May 30, 2006 in Official Records Book 1415, Page 1576.

56. Mortgage in the original principal amount of $443,750.00, executed by Health Care REIT, Inc., Osprey Village at Amelia Island, Ltd., Florida limited liability company et al. in favor of Elsie G. Kelly, recorded July 7, 2006 in Official Records Book 1426, Page 814.

57. Mortgage in the original principal amount of $416,630.00, executed by Health Care REIT, Inc., Osprey Village at Amelia Island, Ltd., Florida limited liability company et al. in favor of Oscar J. Martin, recorded July 12, 2006 in Official Records Book 1427, Page 747, as assigned by Assignment to Susan E. Martin as trustee of the Susan E. Martin Exempt Trust and Peter B. Martin as Trustee under the Peter B. Martin Exempt Trust recorded in Official Records Book 1878, Page 474.

58. Mortgage in the original principal amount of $443,750.00, executed by Health Care REIT, Inc., Osprey Village at Amelia Island, Ltd., Florida limited liability company et al. in favor of Laurens Maclure and Jane White MacLure, recorded July 20, 2006 in Official Records Book 1429, Page 1187, as assigned by Assignment to Jane W. MacLure trustee of the Jane W. MacLure Revocable Trust dated August 14, 2007 recorded in Official Records Book 1524, Page 1453.

59. Mortgage in the original principal amount of $434,176.20, executed by Health Care REIT, Inc., Osprey Village at Amelia Island, Ltd., Florida limited liability company et al. in favor of William A. Salmond and Claire S. Salmond, recorded July 25, 2006 in Official Records Book 1430, Page 1079.

60. Mortgage in the original principal amount of $373,338.00, executed by Health Care REIT, Inc., Osprey Village at Amelia Island, Ltd., Florida limited liability company et al. in favor of Frank A. Pfalzer and Patricia J. Pfalzer, recorded October 6, 2006 in Official Records Book 1450, Page 866.

61. Mortgage in the original principal amount of $425,400.00, executed by Health Care REIT, Inc., Osprey Village at Amelia Island, Ltd., Florida limited liability company et al. in favor of Mary E. Anderson and Katharine A. Baxter, recorded March 7, 2007 in Official Records Book 1483, Page 1065, as affected by (partial) Satisfaction from and Katharine A. Baxter recorded in Official Records Book 1861, Page 391.

62. Mortgage in the original principal amount of $376,173.00, executed by Health Care REIT, Inc., Osprey Village at Amelia Island, Ltd., Florida limited liability company et al. in favor of Robert G. Jewell and Nancy J. Jewell, recorded April 4, 2007 in Official Records Book 1490, Page 194.

63. Mortgage in the original principal amount of $591,608.00, executed by Health Care REIT, Inc., Osprey Village at Amelia Island, Ltd., Florida limited liability

company et al. in favor of Shirley M Rand, recorded April 10, 2007 in Official Records Book 1491, Page 1224.

64. Mortgage in the original principal amount of $488,300.00, executed by Health Care REIT, Inc., Osprey Village at Amelia Island, Ltd., Florida limited liability company et al. in favor of Jesse W. Mendhall and Lois J. Mendenhall, recorded June 21, 2007 in Official Records Book 1506, Page 1951.

65. Mortgage in the original principal amount of $600,000.00, executed by Health Care REIT, Inc., Osprey Village at Amelia Island, Ltd., Florida limited liability company et al. in favor of A. David. McGugan and Janel O. McGugan, recorded October 3, 2007 in Official Record Book 1528, Page 902.

66. Mortgage in the original principal amount of $558,500.00, executed by Health Care REIT, Inc., Osprey Village at Amelia Island, Ltd., Florida limited liability company et al. in favor of William F. Phillip and Margery P. Phillip, recorded November 16, 2007 in Official Records Book 1536, Page 237.

67. Mortgage in the original principal amount of $513,250.00, executed by Health Care REIT, Inc., Osprey Village at Amelia Island, Ltd., Florida limited liability company et al. in favor of Inez B. Merritt, recorded November 30, 2007 in Official Records Book 1538, Page 743.

68. Mortgage in the original principal amount of $324,270.00, executed by Health Care REIT, Inc., Osprey Village at Amelia Island, Ltd., Florida limited liability company et al. in favor of Richard V. Harris and Mildred M. Harris, recorded December 6, 2007 in Official Records Book 1539, Page 694.

69. Mortgage in the original principal amount of $414,720.00, executed by Health Care REIT, Inc., Osprey Village at Amelia Island, Ltd., Florida limited liability company et al. in favor of Delores H. O'Neil, recorded March 6, 2008 in Official Records Book 1554, Page 722.

Totals:

Litchfield	4,756,834.84
Summit Hills	5,957,160.13
Homestead	4,657,634.17
Osprey	12,881,092.61
Total	$28,252,721.25

SCHEDULE 10.3

EXISTING DEBT

1. Care YBE Subsidiary LLC (which was acquired by a Subsidiary of the Company on June 28, 2013) is the borrower under certain loans (collectively, the “Care Fannie Mae Loans”) evidenced by (a) a Multi-Family Note in the original principal amount of $74,589,000 dated June 26, 2008, and (b) a Multi-Family Note in the original principal amount of $7,638,400 dated September 30, 2008.

2. Underwritten public offering of $200 million aggregate principal amount of 3.25% Convertible Senior Notes due 2021.

3. The Company is a counter-party to an Interest Rate Swap in the notional amount of $40,000,000 with Bank of Montreal pursuant to an ISDA Master Agreement dated May 4, 2012.

4. The Company is a counter-party to an Interest Rate Swap in the notional amount of $130,000,000 with Wells Fargo Bank, N.A. pursuant to an ISDA Master Agreement dated March 27, 2014.

5. Mortgage Note in the amount of $9,905,200 dated September 1, 2012 by Lancaster Pollard Mortgage Company, LLC, successor by conversion to Lancaster Pollard Mortgage Company, originally endorsed for insurance by the

U.S. Department of Housing and Urban Development (“HUD”) pursuant to Section 232, Section 223(f), as FHA Project No. 046-22059, as assigned to and assumed by JV Landlord-Middletown, LLC pursuant to that certain Assignment, Assumption and Release Agreement dated October 31, 2014.

6. Healthcare Facility Note in the amount of $4,538,600 by Grand Island Bickford Cottage, L.L.C. for the benefit of KeyBank National Association endorsed for insurance by the U.S. Department of Housing and Urban Development (“HUD”) pursuant to Section 232, Section 223(f), as FHA Project No. 103-22056.

7. Healthcare Facility Note in the amount of $6,781,700 by JV Landlord-Lansing, LLC for the benefit of KeyBank National Association endorsed for insurance by the U.S. Department of Housing and Urban Development (“HUD”) pursuant to Section 232, Section 223(f), as FHA Project No. 047-22097.

8. Healthcare Facility Note in the amount of $5,907,600 by JV Landlord-Midland, LLC for the benefit of KeyBank National Association endorsed for insurance by the U.S. Department of Housing and Urban Development (“HUD”) pursuant to Section 232, Section 223(f), as FHA Project No. 048-22031.

9. Healthcare Facility Note in the amount of $3,889,300 by JV Landlord-Saginaw, LLC for the benefit of KeyBank National Association endorsed for insurance by the U.S. Department of Housing and Urban Development (“HUD”) pursuant to Section 232, Section 223(f), as FHA Project No. 048-22030.

10. Healthcare Facility Note in the amount of $2,831,200 by JV Landlord-Clinton, LLC for the benefit of KeyBank National Association endorsed for insurance by

the U.S. Department of Housing and Urban Development (“HUD”) pursuant to Section 232, Section 223(f), as FHA Project No. 074-22049.

11. Healthcare Facility Note in the amount of $4,091,800 by Cedar Falls Bickford Cottage, L.L.C. for the benefit of KeyBank National Association endorsed for insurance by the U.S. Department of Housing and Urban Development (“HUD”) pursuant to Section 232, Section 223(f), as FHA Project No. 074-22052.

12. Healthcare Facility Note in the amount of $4,269,600 by JV Landlord-Peoria II, LLC for the benefit of KeyBank National Association endorsed for insurance by the U.S. Department of Housing and Urban Development (“HUD”) pursuant to Section 232, Section 223(f), as FHA Project No. 071-22315.

13. Healthcare Facility Note in the amount of $2,570,800 by JV Landlord-Iowa City, LLC for the benefit of KeyBank National Association endorsed for insurance by the U.S. Department of Housing and Urban Development (“HUD”) pursuant to Section 232, Section 223(f), as FHA Project No. 074-22050.

14. Healthcare Facility Note in the amount of $3,126,400 by JV Landlord-Battle Creek, LLC for the benefit of KeyBank National Association endorsed for insurance by the U.S. Department of Housing and Urban Development (“HUD”) pursuant to Section 232, Section 223(f), as FHA Project No. 047-22096.

15. Third Amended and Restated Credit Agreement dated as of March 27, 2014 by and among the Company (“Borrower”), certain Subsidiaries of the Borrower as Subsidiary Guarantors (the “Subsidiary Guarantors”), certain Subsidiaries of the Borrower as Limited Guarantors (the “Limited Guarantors”), the Lenders party thereto and Wells Fargo Bank, N.A., as Administrative Agent, Swing Line Lender and Issuing Bank (the “Administrative Agent”), which provides for a $450,000,000 Revolving Credit Facility, which includes a $10,000,000 Letter of Credit Facility and a $10,000,000 Swing Line Loan Facility, and a $40,000,000 Term Loan and an $80,000,000 Term Loan, and a $130,000,000 Term Loan.

[EXHIBIT B]

FORM OF OFFICER’S COMPLIANCE CERTIFICATE

The undersigned, on behalf of National Health Investors, Inc., a corporation organized under the laws of Maryland (the “Company”), hereby certifies to the holders of the Notes (as defined in the Note Agreement referred to below), as follows:

1.This certificate is delivered to you pursuant to Section 9.2 of the Note Purchase Agreement dated as of January 13, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Note Agreement”), by and among the Company and the holders of the Notes. Capitalized terms used herein and not defined herein shall have the meanings assigned thereto in the Note Agreement.

2.I have reviewed the financial statements of the Company and its Subsidiaries dated as of and for the    period[s] then ended and such statements fairly present in all material respects the financial condition of the Company and its Subsidiaries as of the dates indicated and

the results of their operations and cash flows for the period[s] indicated.

3.I have reviewed the terms of the Note Agreement, and the related Note Documents and have made, or caused to be made under my supervision, a review in reasonable detail of the transactions and the condition of the Company and its Subsidiaries during the accounting period covered by the financial statements referred to in Paragraph 2 above. Such review has not disclosed the existence during or at the end of such accounting period of any condition or event that constitutes a Default or an Event of Default, nor do I have any knowledge of the existence of any such condition or event as at the date of this certificate [except, if such condition or event existed or exists, describe the nature and period of existence thereof and what action the Company has taken, is taking and proposes to take with respect thereto].

4.The Company and its Subsidiaries are in compliance with the financial covenants contained in Section 9.12 of the Note Agreement, as shown on such Schedule 1,and the other covenants and restrictions contained in the Note Agreement.

5.Each of the Unencumbered Lease Properties listed on the attached Schedule 1fully qualify as such under the applicable criteria for inclusion as an Unencumbered Lease Property.

6.Each of the Lease Properties listed on the attached Schedule 1fully qualify as such under the applicable criteria for inclusion as a Lease Property.

7. Schedule 2is a list of all Investments in the Limited Guarantors as of the date hereof.

[Signature Page Follows]

EXHIBIT B

(To Note Purchase Agreement)

WITNESS the following signature as of the day and year first written above.

NATIONAL HEALTH INVESTORS, INC.

By: Name: Title:

SCHEDULE 1

to the Compliance Certificate [Attached in PDF Format]

SCHEDULE 2

to the Compliance Certificate ($ in 000’s)

    Limited Guarantor        Loan or Advance        Equity Interests or Other Investment     

EX-12.1

Exhibit 12.1
NATIONAL HEALTH INVESTORS, INC.
STATEMENT REGARDING COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND
RATIO OF COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(dollars in thousands)
(unaudited)
	Year Ended
	2014			2013			2012			2011			2010
Earnings
Income from continuing operations before adjustment for income or loss from equity investees	$	103,123		$	79,174		$	72,789		$	69,817		$	58,729
Add: State franchise taxes based on gross receipts	133			132			117			96			82
Add: Fixed charges	26,948			9,607			3,700			2,681			1,860
Add: Amortization of capitalized interest	112			9			1			—			—
Subtract: Preferred stock dividends	—			—			—			—			—
Subtract: Interest capitalized	(576		)	(378		)	(208		)	(30		)	—
Total Earnings	$	129,740		$	88,544		$	76,399		$	72,564		$	60,671
Fixed Charges
Interest expense	$	23,302		$	8,523		$	3,172		$	2,070		$	1,552
Interest capitalized	576			378			208			30			—
Amortization of costs related to indebtedness	3,070			706			320			581			308
Total Fixed Charges	26,948			9,607			3,700			2,681			1,860
Preferred Stock Dividends(1)	—			—			—			—			—
Combined Fixed Charges and Preferred Stock Dividends	$	26,948		$	9,607		$	3,700		$	2,681		$	1,860
Ratio of Earnings to Fixed Charges	4.81			9.22			20.65			27.07			32.62
(1) There was no preferred stock outstanding for any of the periods presented.

EX-21

Exhibit 21

SUBSIDIARIES

NHI Subsidiary: NHI/REIT, Inc. Florida Holdings IV, LLC NHI/Anderson, LLC NHI/Laurens, LLC Texas NHI Investors, LLC NHI of Paris, LLC NHI of San Antonio, LLC NHI of East Houston, LLC NHI of Northwest Houston, LLC NHI REIT of Alabama, L.P. (f/k/a NHI of Alabama, Ltd.) NHI-REIT of Arizona, Limited Partnership NHI-REIT of California, LP NHI/REIT of Florida, L.P. (f/k/a NHI of Florida, Ltd.) NHI-REIT of Florida, LLC NHI-REIT of Georgia, L.P. (f/k/a NHI of Georgia L.P.) NHI-REIT of Idaho, L.P. NHI of Kansas, L.P. NHI-REIT of Minnesota, LLC NHI-REIT of Missouri, LP (f/k/a NHI of Missouri, L.P.) NHI-REIT of Northeast, LLC NHI-REIT of New Jersey, L.P. NHI-REIT of Pennsylvania, L.P. NHI-REIT of South Carolina, L.P. (f/k/a NHI of South Carolina, L.P.) NHI-REIT of Tennessee, LLC NHI-REIT of Texas, L.P. NHI-REIT of Virginia, L.P. (f/k/a NHI of Virginia, L.P.) NHI Selah Properties, LLC NHI of Ennis, LLC NHI of Greenville, LLC NHI of North Houston, LLC NHI of West Houston, LLC NHI-REIT of Washington, LLC International Health Investors, Inc. NHI of Kyle, LLC NHI-SS TRS, LLC NHI PropCo, LLC NHI-REIT of Oregon, LLC NHI-REIT of Wisconsin, LLC NHI-REIT of Ohio, LLC NHI-REIT of Maryland, LLC NHI-REIT of Next House, LLC NHI-Bickford RE, LLC Myrtle Beach Retirement Residence, LLC Voorheese Retirement Residence, LLC Bickford at Mission Springs I, L.L.C. Bickford at Mission Springs II, L.L.C. Bickford of Overland Park, L.L.C. Cedar Falls Bickford Cottage, L.L.C. Cedar Falls Bickford Cottage Opco, LLC Grand Island Bickford Cottage, L.L.C. Grand Island Bickford Cottage Opco, LLC Wabash Bickford Cottage, L.L.C. Wabash Bickford Cottage Opco, LLC Bickford of Crown Point, LLC Bickford Master II, L.L.C. Battle Creek Bickford Cottage, L.L.C. Bickford of Carmel, LLC Bickford of Greenwood, LLC Bickford at Mission Springs Opco I, LLC Bickford at Mission Springs Opco II, LLC Bickford of Overland Park Opco LLC Clinton Bickford Cottage, L.L.C. Iowa City Bickford Cottage, L.L.C. Lafayette Bickford Cottage, L.L.C. Lansing Bickford Cottage, L.L.C. Midland Bickford Cottage, L.L.C. Peoria Bickford Cottage, L.L.C. Saginaw Bickford Cottage, L.L.C. Bickford Master I, L.L.C. Care YBE Subsidiary LLC Ames Bickford Cottage, L.L.C. Bourbonnais Bickford House, L.L.C. Burlington Bickford Cottage, L.L.C. Crawfordsville Bickford Cottage, L.L.C. Fort Dodge Bickford Cottage, L.L.C. Lincoln Bickford Cottage, L.L.C. Marshalltown Bickford Cottage, L.L.C. Moline Bickford Cottage, L.L.C. Muscatine Bickford Cottage, L.L.C. Omaha II Bickford Cottage, L.L.C. Quincy Bickford Cottage, L.L.C. Rockford Bickford House, L.L.C. Springfield Bickford House, L.L.C. Urbandale Bickford Cottage, L.L.C. JV Landlord-Battle Creek, LLC JV Landlord-Clinton, LLC JV Landlord-Iowa City, LLC JV Landlord-Lansing, LLC JV Landlord-Midland, LLC JV Landlord-Peoria II, LLC JV Landlord-Saginaw, LLC JV Bickford Master Tenant, LLC JV Landlord-Middletown, LLC Bickford of Middletown, LLC NHI-REIT of Seaside, LLC State of Formation: Maryland Delaware Delaware Delaware Texas Delaware Delaware Delaware Delaware Alabama Arizona California Florida Delaware Georgia Idaho Kansas Delaware Missouri Delaware New Jersey Pennsylvania South Carolina Tennessee Texas Virginia Delaware Delaware Delaware Delaware Delaware Delaware Maryland Delaware Delaware Delaware Delaware

Delaware

Delaware

Delaware

Delaware

Delaware

Oregon

Oregon

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Delaware

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Kansas

Delaware

Delaware

Delaware

Delaware

Delaware

Delaware

Delaware

Kansas

Delaware

Kansas

Delaware

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

National Health Investors, Inc.

Murfreesboro, Tennessee

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-192338 and No. 333-194653) and on Form S-8 (No. 333-127179 and No. 333-186854) of National Health Investors, Inc. of our reports dated February 17, 2015, relating to the consolidated financial statements, financial statement schedules and the effectiveness of National Health Investors, Inc.'s internal control over financial reporting, which appear in this Form 10-K.

/s/ BDO USA, LLP

Nashville, Tennessee

February 17, 2015

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, J. Justin Hutchens, certify that:

1. I have reviewed this annual report on Form 10-K of the registrant, National Health Investors, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 17, 2015	/s/ J. Justin Hutchens
		J. Justin Hutchens
		President, Chief Executive Officer,
		and Director

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Roger R. Hopkins, certify that:

1. I have reviewed this annual report on Form 10-K of the registrant, National Health Investors, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions) :

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 17, 2015	/s/ Roger R. Hopkins
		Roger R. Hopkins
		Chief Accounting Officer
		(Principal Financial Officer and Principal Accounting Officer)

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned hereby certify, pursuant to 18 U.S.C. Section 1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002, that, to the undersigned's best knowledge and belief, the annual report on Form 10-K for National Health Investors, Inc. ("Issuer") for the year ended December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the "Report"):

(a) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(b) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.

Date:	February 17, 2015	/s/ J. Justin Hutchens
		J. Justin Hutchens
		President, Chief Executive Officer,
		and Director
Date:	February 17, 2015	/s/ Roger R. Hopkins
		Roger R. Hopkins
		Chief Accounting Officer
		(Principal Financial Officer and Principal Accounting Officer)

EX-99.1

EXHIBIT 99.1

NATIONAL HEALTH INVESTORS, INC.

INDEX TO FINANCIAL STATEMENT SCHEDULES

Financial Statement Schedules

Report of Independent Registered Public Accounting Firm

Schedule II - Valuation and Qualifying Accounts

Schedule III - Real Estate and Accumulated Depreciation

Schedule IV - Mortgage Loans on Real Estate

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders

National Health Investors, Inc.

Murfreesboro, Tennessee

The audits referred to in our report dated February 17, 2015 relating to the consolidated financial statements of National Health Investors, Inc., which is contained in Item 8 of this Form 10-K, also included the audits of the financial statement schedules listed in the accompanying index. These financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statement schedules based on our audits.

In our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

/s/ BDO USA, LLP

Nashville, Tennessee

February 17, 2015

NATIONAL HEALTH INVESTORS, INC.

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012

(in thousands)

	Balance		Additions
	Beginning		Charged to Costs				Balance
	of Period		and Expenses1		Deductions		End of Period
For the year ended December 31, 2014
Loan loss allowance	$	—	$	—	$	—	$	—
For the year ended December 31, 2013
Loan loss allowance	$	—	$	—	$	—	$	—
For the year ended December 31, 2012
Loan loss allowance	$	—	$	—	$	—	$	—

¹ In the Consolidated Statements of Income, we report the net amount of our provision for loan and realty losses and our recoveries of amounts previously written down. For 2013, net losses were $1,976,000, consisting of a $4,037,000 note impairment and a $2,061,000 recovery and there was no provision for losses during the year. For 2012, net recoveries were $2,195,000, consisting of a $4,495,000 recovery and a $2,300,000 note impairment and there was no provision for losses during the year.

NATIONAL HEALTH INVESTORS, INC.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2014
(in thousands)
							Costs		Gross Amount at Which
			Initial Cost to Company				Capitalized		Carried at Close of Period								Date
					Buildings &		Subsequent to				Buildings &				Accumulated		Acquired/
	Encumbrances		Land		Improvements		Acquisition		Land		Improvements		Total		Depreciation		Constructed
Skilled Nursing Facilities
Anniston, AL	$	—	$	70	$	4,477	$	—	$	70	$	4,477	$	4,547	$	3,206	10/17/1991
Moulton, AL	—		25		688		—		25		688		713		688		10/17/1991
Avondale, AZ	—		453		6,678		—		453		6,678		7,131		3,241		8/13/1996
Brooksville, FL	—		1,217		16,166		—		1,217		16,166		17,383		1,987		2/1/2010
Crystal River, FL	—		912		12,117		—		912		12,117		13,029		1,489		2/1/2010
Dade City, FL	—		605		8,042		—		605		8,042		8,647		988		2/1/2010
Hudson, FL (2 facilities)	—		1,290		22,392		—		1,290		22,392		23,682		8,942		Various
Merritt Island, FL	—		701		8,869		—		701		8,869		9,570		6,546		10/17/1991
New Port Richey, FL	—		228		3,023		—		228		3,023		3,251		372		2/1/2010
Plant City, FL	—		405		8,777		—		405		8,777		9,182		6,634		10/17/1991
Stuart, FL	—		787		9,048		—		787		9,048		9,835		6,771		10/17/1991
Trenton, FL	—		851		11,312		—		851		11,312		12,163		1,390		2/1/2010
Grangeville, ID	—		122		2,491		—		122		2,491		2,613		1,229		8/13/1996
Glasgow, KY	—		33		2,110		—		33		2,110		2,143		1,902		10/17/1991
Greenfield, MA	—		370		4,341		—		370		4,341		4,711		153		8/30/2013
Holyoke, MA	—		110		943		—		110		943		1,053		35		8/30/2013
Quincy, MA	—		450		710		—		450		710		1,160		24		8/30/2013
Taunton, MA	—		900		5,906		—		900		5,906		6,806		210		8/30/2013
Desloge, MO	—		178		3,804		—		178		3,804		3,982		2,989		10/17/1991
Joplin, MO	—		175		4,034		—		175		4,034		4,209		2,501		10/17/1991
Kennett, MO	—		180		4,928		—		180		4,928		5,108		3,919		10/17/1991
Maryland Heights, MO	—		482		5,512		—		482		5,512		5,994		4,953		10/17/1991
St. Charles, MO	—		150		4,790		—		150		4,790		4,940		3,757		10/17/1991
Manchester, NH	—		790		20,077		—		790		20,077		20,867		693		8/30/2013
Epsom, NH	—		630		2,191		—		630		2,191		2,821		81		8/30/2013
Albany, OR	—		190		11,150		—		190		11,150		11,340		219		3/31/2014
Creswell, OR	—		470		9,642		—		470		9,642		10,112		205		3/31/2014
Forest Grove, OR	—		540		12,277		—		540		12,277		12,817		257		3/31/2014
Anderson, SC	—		308		4,643		—		308		4,643		4,951		3,998		10/17/1991
Greenwood, SC	—		222		3,457		—		222		3,457		3,679		2,925		10/17/1991
Laurens, SC	—		42		3,426		—		42		3,426		3,468		2,685		10/17/1991
Orangeburg, SC	—		300		3,715		—		300		3,715		4,015		640		9/25/2008
Athens, TN	—		38		1,463		—		38		1,463		1,501		1,314		10/17/1991
Chattanooga, TN	—		143		2,309		—		143		2,309		2,452		2,044		10/17/1991
Dickson, TN	—		90		3,541		—		90		3,541		3,631		2,798		10/17/1991
Franklin, TN	—		47		1,130		—		47		1,130		1,177		955		10/17/1991
Hendersonville, TN	—		363		3,837		—		363		3,837		4,200		2,667		10/17/1991

NATIONAL HEALTH INVESTORS, INC.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2014
(in thousands)
				Costs	Gross Amount at Which
		Initial Cost to Company		Capitalized	Carried at Close of Period				Date
			Buildings &	Subsequent to		Buildings &		Accumulated	Acquired/
	Encumbrances	Land	Improvements	Acquisition	Land	Improvements	Total	Depreciation	Constructed
Johnson City, TN	—	85	1,918	—	85	1,918	2,003	1,788	10/17/1991
Lewisburg, TN (2 facilities)	—	46	994	—	46	994	1,040	928	10/17/1991
McMinnville, TN	—	73	3,618	—	73	3,618	3,691	2,814	10/17/1991
Milan, TN	—	41	1,826	—	41	1,826	1,867	1,545	10/17/1991
Pulaski, TN	—	53	3,921	—	53	3,921	3,974	3,090	10/17/1991
Lawrenceburg, TN	—	98	2,901	—	98	2,901	2,999	2,113	10/17/1991
Dunlap, TN	—	35	3,679	—	35	3,679	3,714	2,651	10/17/1991
Smithville, TN	—	35	3,816	—	35	3,816	3,851	2,923	10/18/1991
Somerville, TN	—	26	678	—	26	678	704	637	10/19/1991
Sparta, TN	—	80	1,602	—	80	1,602	1,682	1,311	10/20/1991
Canton, TX	—	420	12,330	—	420	12,330	12,750	682	4/18/2013
Corinth, TX	—	1,075	13,935	—	1,075	13,935	15,010	829	4/18/2013
Ennis, TX	—	986	9,025	—	986	9,025	10,011	1,015	10/31/2011
Greenville, TX	—	1,800	13,948	—	1,800	13,948	15,748	1,409	10/31/2011
Houston, TX (5 facilities)	—	3,818	63,921	—	3,818	63,921	67,739	10,255	Various
Kyle, TX	—	1,096	12,279	—	1,096	12,279	13,375	1,114	6/11/2012
Mesquite, TX	—	180	6,162	—	180	6,162	6,342	2,365	9/1/1998
Paris, TX	—	60	12,040	—	60	12,040	12,100	2,017	6/30/2009
San Antonio, TX	—	300	12,150	—	300	12,150	12,450	2,208	6/30/2009
Bristol, VA	—	176	2,511	—	176	2,511	2,687	1,973	10/17/1991
	—	25,350	417,270	—	25,350	417,270	442,620	129,074
Assisted Living Facilities
Rainbow City, AL	—	670	11,330	—	670	11,330	12,000	410	10/31/2013
Gilbert, AZ	—	451	3,142	79	451	3,221	3,672	1,274	12/31/1998
Glendale, AZ	—	387	3,823	57	387	3,880	4,267	1,544	12/31/1998
Tucson, AZ (2 facilities)	—	919	6,656	190	919	6,846	7,765	2,697	12/31/1998
Sacramento, CA	—	660	10,840	—	660	10,840	11,500	179	6/1/2014
Bartow, FL	—	225	3,192	—	225	3,192	3,417	396	11/30/2010
Lakeland, FL	—	250	3,167	—	250	3,167	3,417	395	11/30/2010
Maitland, FL	—	1,687	5,428	—	1,687	5,428	7,115	2,808	8/6/1996
St. Cloud, FL	—	307	3,117	—	307	3,117	3,424	388	11/30/2010
Greensboro, GA	—	572	4,849	12	572	4,861	5,433	446	9/15/2011
Ames, IA	—	360	4,670	—	360	4,670	5,030	200	6/28/2013
Burlington, IA	—	200	8,374	—	200	8,374	8,574	360	6/28/2013
Cedar Falls, IA	4,072	260	4,700	—	260	4,700	4,960	206	6/28/2013
Clinton, IA	2,818	133	3,215	—	133	3,215	3,348	391	6/30/2010
Ft. Dodge, IA	—	100	7,208	—	100	7,208	7,308	302	6/28/2013

NATIONAL HEALTH INVESTORS, INC.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2014
(in thousands)
				Costs	Gross Amount at Which
		Initial Cost to Company		Capitalized	Carried at Close of Period				Date
			Buildings &	Subsequent to		Buildings &		Accumulated	Acquired/
	Encumbrances	Land	Improvements	Acquisition	Land	Improvements	Total	Depreciation	Constructed
Iowa City, IA	2,559	297	2,725	—	297	2,725	3,022	381	6/30/2010
Marshalltown, IA	—	240	6,208	—	240	6,208	6,448	265	6/28/2013
Muscatine, IA	—	140	1,802	—	140	1,802	1,942	87	6/28/2013
Urbandale, IA	—	540	4,292	—	540	4,292	4,832	194	6/28/2013
Caldwell, ID	—	320	10,080	—	320	10,080	10,400	210	3/31/2014
Weiser, ID	—	20	2,433	—	20	2,433	2,453	128	12/21/2012
Bourbonnais, IL	—	170	16,594	—	170	16,594	16,764	694	6/28/2013
Moline, IL	—	250	5,630	—	250	5,630	5,880	244	6/28/2013
Peoria, IL	4,260	403	4,532	96	403	4,628	5,031	625	10/19/2009
Quincy, IL	—	360	12,403	—	360	12,403	12,763	517	6/28/2013
Rockford, IL	—	390	12,576	—	390	12,576	12,966	541	6/28/2013
Springfield, IL	—	450	19,355	—	450	19,355	19,805	808	6/28/2013
Carmel, IN	—	475	7,336	—	475	7,336	7,811	—	11/12/2014
Crawfordsville, IN	—	300	3,134	—	300	3,134	3,434	138	6/28/2013
Crown Point, IN	—	791	7,020	227	791	7,247	8,038	277	10/30/2013
Greenwood, IN	—	463	6,810	245	463	7,055	7,518	270	11/7/2013
Lafayette, IN	—	546	4,583	—	546	4,583	5,129	552	6/30/2010
Wabash, IN	—	320	2,241	—	320	2,241	2,561	111	6/28/2013
Mission, KS	—	1,901	17,310	—	1,901	17,310	19,211	1,370	9/30/2012
Overland Park, KS	—	2,199	20,026	—	2,199	20,026	22,225	1,585	9/30/2012
Bastrop, LA	—	325	2,456	—	325	2,456	2,781	290	4/30/2011
Bossier City, LA	—	500	3,344	—	500	3,344	3,844	415	4/30/2011
Minden, LA	—	280	1,698	—	280	1,698	1,978	199	4/30/2011
West Monroe, LA	—	770	5,627	—	770	5,627	6,397	624	4/30/2011
Baltimore, MD	—	860	8,078	353	860	8,431	9,291	257	10/31/2013
Battle Creek, MI	3,112	398	3,093	—	398	3,093	3,491	443	10/19/2009
Lansing, MI	6,750	340	7,908	—	340	7,908	8,248	1,118	10/19/2009
Midland, MI	5,880	504	6,612	—	504	6,612	7,116	894	10/19/2009
Saginaw, MI	3,871	248	4,212	—	248	4,212	4,460	590	10/19/2009
Champlin, MN	—	980	4,430	—	980	4,430	5,410	642	3/10/2010
Hugo, MN	—	400	3,800	—	400	3,800	4,200	535	3/10/2010
Maplewood, MN	—	1,700	6,510	—	1,700	6,510	8,210	936	3/10/2010
North Branch, MN	—	595	2,985	—	595	2,985	3,580	467	3/10/2010
Grand Island, NE	4,528	370	5,029	90	370	5,119	5,489	214	6/28/2013
Lincoln, NE	—	380	10,904	—	380	10,904	11,284	451	6/28/2013
Omaha, NE	—	480	7,039	—	480	7,039	7,519	295	6/28/2013
Marysville, OH	—	1,250	13,950	—	1,250	13,950	15,200	636	7/1/2013
Middletown, OH	9,503	940	15,548	—	940	15,548	16,488	75	10/31/2014

NATIONAL HEALTH INVESTORS, INC.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2014
(in thousands)
				Costs	Gross Amount at Which
		Initial Cost to Company		Capitalized	Carried at Close of Period				Date
			Buildings &	Subsequent to		Buildings &		Accumulated	Acquired/
	Encumbrances	Land	Improvements	Acquisition	Land	Improvements	Total	Depreciation	Constructed
Milwaukie, OR	—	370	5,283	—	370	5,283	5,653	35	9/30/2014
Ontario, OR (2 facilities)	—	428	6,128	—	428	6,128	6,556	323	12/21/2012
Conway, SC	—	344	2,877	94	344	2,971	3,315	1,174	12/31/1998
Gallatin, TN	—	326	2,277	61	326	2,338	2,664	925	3/31/1999
Kingsport, TN	—	354	2,568	66	354	2,634	2,988	1,042	12/31/1998
Tullahoma, TN	—	191	2,216	57	191	2,273	2,464	883	3/31/1999
Beaver Dam, WI	—	210	20,149	—	210	20,149	20,359	1,162	12/21/2012
	47,353	31,299	405,522	1,627	31,299	407,149	438,448	35,618
Independent Living Facilities
Rogers, AR	—	1,470	25,283	—	1,470	25,283	26,753	694	12/23/2013
Fort Smith, AR	—	590	22,447	—	590	22,447	23,037	611	12/23/2013
Pinole, CA	—	1,020	18,066	—	1,020	18,066	19,086	492	12/23/2013
West Covina, CA	—	940	20,280	—	940	20,280	21,220	545	12/23/2013
Hemet, CA	—	1,250	12,645	—	1,250	12,645	13,895	359	12/23/2013
Fresno, CA	—	420	10,899	—	420	10,899	11,319	315	12/23/2013
Merced, CA	—	350	18,712	—	350	18,712	19,062	511	12/23/2013
Roseville, CA	—	630	31,343	—	630	31,343	31,973	842	12/23/2013
Modesto, CA	—	1,170	22,673	—	1,170	22,673	23,843	607	12/23/2013
Athens, GA	—	910	31,940	—	910	31,940	32,850	861	12/23/2013
Columbus, GA	—	570	8,639	—	570	8,639	9,209	254	12/23/2013
Savannah, GA	—	1,200	15,851	—	1,200	15,851	17,051	441	12/23/2013
Boise, ID	—	400	12,422	—	400	12,422	12,822	346	12/23/2013
Fort Wayne, IN	—	310	12,864	—	310	12,864	13,174	370	12/23/2013
Kenner, LA	—	310	24,259	—	310	24,259	24,569	656	12/23/2013
St. Charles, MO	—	344	3,181	—	344	3,181	3,525	2,284	10/17/1991
Voorhees, NJ	—	670	23,710	—	670	23,710	24,380	633	12/23/2013
Gahanna, OH	—	920	22,919	—	920	22,919	23,839	629	12/23/2013
Broken Arrow, OK	—	2,660	18,476	—	2,660	18,476	21,136	513	12/23/2013
Newberg, OR	—	1,080	19,187	—	1,080	19,187	20,267	529	12/23/2013
Myrtle Beach, SC	—	1,310	26,229	—	1,310	26,229	27,539	702	12/23/2013
Greenville, SC	—	560	16,547	—	560	16,547	17,107	460	12/23/2013
Johnson City, TN	—	55	4,077	—	55	4,077	4,132	2,588	10/17/1991
Chattanooga, TN	—	9	1,567	—	9	1,567	1,576	1,148	10/17/1991
Bellevue, WA	—	780	18,692	—	780	18,692	19,472	504	12/23/2013
Vancouver, WA (2 facilities)	—	1,740	23,411	—	1,740	23,411	25,151	653	12/23/2013
Yakima, WA	—	440	14,185	—	440	14,185	14,625	388	12/23/2013
	—	22,108	480,504	—	22,108	480,504	502,612	18,935

NATIONAL HEALTH INVESTORS, INC.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2014
(in thousands)
							Costs		Gross Amount at Which
			Initial Cost to Company				Capitalized		Carried at Close of Period								Date
					Buildings &		Subsequent to				Buildings &				Accumulated		Acquired/
	Encumbrances		Land		Improvements		Acquisition		Land		Improvements		Total		Depreciation		Constructed
Senior Living Campuses
Loma Linda, CA	—		1,200		10,800		4,232		1,200		15,032		16,232		687		9/28/2012
Maitland, FL	—		2,317		9,161		—		2,317		9,161		11,478		5,422		8/6/1996
West Palm Beach, FL	—		2,771		4,286		—		2,771		4,286		7,057		3,633		8/6/1996
Nampa, ID	—		243		4,182		—		243		4,182		4,425		2,042		8/13/1996
Mt. Airy, NC	—		1,370		7,470		—		1,370		7,470		8,840		—		12/17/2014
Silverdale, WA	—		1,750		23,860		2,166		1,750		26,026		27,776		1,658		8/16/2012
	—		9,651		59,759		6,398		9,651		66,157		75,808		13,442
Entrance-Fee Communities
Fernandina Beach, FL	—		1,430		63,420		—		1,430		63,420		64,850		—		12/17/2014
St. Simons Island, GA	—		8,770		38,070		—		8,770		38,070		46,840		—		12/17/2014
Winston-Salem, NC	—		8,700		73,920		—		8,700		73,920		82,620		—		12/17/2014
Greenville, SC	—		5,850		90,760		—		5,850		90,760		96,610		—		12/17/2014
Myrtle Beach, SC	—		3,910		82,140		—		3,910		82,140		86,050		—		12/17/2014
Pawleys Island, SC	—		1,480		38,620		—		1,480		38,620		40,100		—		12/17/2014
Spartanburg, SC	—		900		49,190		—		900		49,190		50,090		—		12/17/2014
	—		31,040		436,120		—		31,040		436,120		467,160		—
Medical Office Buildings
Crestview, FL	—		165		3,349		—		165		3,349		3,514		2,193		6/30/1993
Pasadena, TX	—		631		6,341		—		631		6,341		6,972		4,312		1/1/1995
	—		796		9,690		—		796		9,690		10,486		6,505
Hospitals
La Mesa, CA	—		4,180		8,320		—		4,180		8,320		12,500		1,482		3/10/2010
Jackson, KY	—		540		10,163		7,583		540		17,746		18,286		6,079		6/12/1992
Murfreesboro, TN	—		2,444		17,585		—		2,444		17,585		20,029		988		10/1/2012
	—		7,164		36,068		7,583		7,164		43,651		50,815		8,549
Total continuing operations properties	47,353		127,408		1,844,933		15,608		127,408		1,860,541		1,987,949		212,123
Corporate office	—		158		677		66		157		743		900		177
	$	47,353	$	127,566	$	1,845,610	$	15,674	$	127,565	$	1,861,284	$	1,988,849	$	212,300

NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

(A) See the notes to the consolidated financial statements.

(B) Depreciation is calculated using estimated useful lives up to 40 years for all completed facilities.

(C) Subsequent to NHC's transfer of the original real estate properties in 1991, we have purchased from NHC $33,909,000 of additions to those properties. As the additions were purchased from NHC rather than developed by us, the $33,909,000 has been included as Initial Cost to Company.

(D) At December 31, 2014, the tax basis of the Company's net real estate assets was $1,742,086.

NATIONAL HEALTH INVESTORS, INC.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
FOR THE YEARS ENDED DECEMBER 31, 2014, 2013 AND 2012
(in thousands)
	December 31,
	2014			2013			2012
Investment in Real Estate:
Balance at beginning of period	$	1,422,002		$	698,536		$	541,493
Additions through cash expenditures	533,171			654,670			110,601
Change in property additions in accounts payable	(995		)	3,086			—
Additions through contingent liabilities	3,000			1,600			—
Additions through assumption of debt	7,858			80,528			19,250
Tax deferred exchange funds applied to investment in real estate	23,813			—			—
Additions through conveyance of noncontrolling interest	—			—			10,964
Additions through settlement of mortgage note	—			13,741			—
Sale of properties for cash	—			(30,159		)	(17,259		)
Reclassification from assets held for sale, net	—			—			39,323
Reclassification to assets held for sale, net	—			—			(5,836		)
Balance at end of period	$	1,988,849		$	1,422,002		$	698,536
Accumulated Depreciation:
Balance at beginning of period	$	174,262		$	163,146		$	146,698
Addition charged to costs and expenses	38,038			20,658			16,981
Sale of properties	—			(9,542		)	(6,250		)
Reclassification from assets held for sale, net	—			—			9,942
Reclassification to assets held for sale	—			—			(4,225		)
Balance at end of period	$	212,300		$	174,262		$	163,146

NATIONAL HEALTH INVESTORS, INC.
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
December 31, 2014
			Monthly						Amount Subject To
	Interest	Maturity	Payment	Prior	Original		Carrying		Delinquent Principal
	Rate	Date	Terms	Liens	Face Amount		Amount		or Interest
					(in thousands)
First Mortgages:
Skilled nursing facilities:
Grundy, VA	8.0%	2032	$31,000		$	4,396	$	3,099
Virginia Beach, VA	8.0%	2031	$31,000		3,814		2,795
Lexington, VA	8.0%	2032	$21,000		3,089		1,989
Brookneal, VA	8.0%	2031	$21,000		2,780		1,959
Laurel Fork, VA	8.0%	2030	$20,000		2,672		1,893
Front Royal, VA	9.6%	2027	$22,000		2,367		1,588
Assisted living facility in Owatonna, MN	7.5%	2018	$38,000		5,033		3,657
Construction Loan:
Transitional rehabilitation center in Mesa, Arizona	10.0%	2015	Interest Only		13,870		11,870
Second Mortgages:
Skilled nursing facility in Georgetown, TX	14.0%	2015	Interest Only		1,000		1,000
Assisted living facilities:
Ocala, FL	13.0%	2014	Interest Only		2,500		2,500
Naples, FL	12.0%	2016	Interest Only		2,500		2,500
							$	34,850	$	—

See the notes to our consolidated financial statements for more information on our mortgage loan receivables.

NATIONAL HEALTH INVESTORS, INC.
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
FOR THE YEARS ENDED DECEMBER 31, 2014, 2013 AND 2012
(in thousands)
	December 31,
	2014		2013		2012
Reconciliation of mortgage loans on real estate
Balance at beginning of period	$	34,926	$	68,214	$	78,672
Additions:
New mortgage loans	1,131		1,369		—
Total Additions	1,131		1,369		—
Deductions:
Settlement of mortgage note by real estate acquisition	—		13,741		—
Impairment of mortgage note	—		4,037		2,300
Collection of principal, less recoveries of previous write-downs	1,207		16,879		8,158
Total Deductions	1,207		34,657		10,458
Balance at end of period	$	34,850	$	34,926	$	68,214

XML

Fair Value, Assets Measured on Recurring Basis (Tables)

12 Months Ended

Dec. 31, 2014

Fair Value, Assets Measured on Recurring Basis [Abstract]

Fair Value, Assets Measured on Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are as follows (in thousands):

		Fair Value Measurement
	Balance Sheet Classification	December 31, 2014		December 31, 2013
Level 1
Common stock of other healthcare REITs	Marketable securities	$	15,503	$	12,650
Level 2
Interest rate swap asset	Other assets	$	—	$	975
Interest rate swap liability	Accrued expenses	$	5,193	$	—
Level 3
Contingent consideration	Real estate purchase liabilities	$	3,000	$	2,600

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The following table presents a reconciliation of Level 3 liabilities measured at fair value on a recurring basis for the years ended December 31, 2014 and 2013(in thousands):

	Fair Value Beginning of Period		Transfers Into Level 3		Realized Gains and (Losses)		Purchases, Issuances and Settlements			Fair Value at End of Period		Total Period Losses Included in Earnings Attributable to the Change in Unrealized Losses Relating to Assets Held at End of Year
2014
Contingent consideration	$	2,600	$	—	$	—	$	400		$	3,000	$	—
2013
Contingent consideration	$	4,256	$	—	$	—	$	(1,656	)	$	2,600	$	—

Fair Value Measurements, Nonrecurring

Carrying values and fair values of financial instruments that are not carried at fair value at December 31, 2014 and 2013 in the Consolidated Balance Sheets are as follows (in thousands):

	Carrying Amount				Fair Value Measurement
	2014		2013		2014		2013
Level 2
Variable rate debt	$	624,000	$	537,000	$	624,000	$	537,000
Fixed rate debt	$	238,726	$	80,080	$	254,150	$	79,365
Level 3
Mortgage and other notes receivable	$	63,630	$	60,639	$	72,435	$	67,201

XML

Debt Debt (Schedule of Interest Expense) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Schedule of Interest Expense [Abstract]
Interest expense	$ 23,878	$ 8,944	$ 3,380
Capitalized interest	(576)	(378)	(208)
Amortization of debt issuance costs and bond discount	2,580	247	320
Unamortized premium written off as a result of debt payoff	(1,655)	0	0
Debt issuance costs expensed due to credit facility modifications	2,145	416	0
Total interest expense	$ 26,372	$ 9,229	$ 3,492

XML

Equity-Method Investment And Other Assets Equity-Method Investment And Other Assets (Narrative) (Details) (USD $)	12 Months Ended			15 Months Ended
	Dec. 31, 2014 properties	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2014 properties	Jun. 30, 2013
Investment [Line Items]
Equity Method Investment, Difference Between Carrying Amount and Underlying Equity					$ 8,986,000
Number of Real Estate Properties	172			172
Net Assets Received In Acquisition of Equity-Method Investee	0	817,000	0
Variable Interest Entity, Financial or Other Support, Amount				0
Proceeds from Equity Method Investment, Dividends or Distributions	0	0
Escrow deposit for tax deferred exchange	0	23,813,000		0
Lease escrow deposits	21,648,000	22,775,000		21,648,000
Payments for Capital Improvements	4,211,000	6,773,000	0
Payments for Delayed Tax Exempt Exchange	23,813,000	0	0
Bickford Senior Living [Member]
Investment [Line Items]
Number of Real Estate Properties					17
Lease Security [Member]
Investment [Line Items]
Lease escrow deposits	21,275,000			21,275,000
Capital Improvements Reserve [Member]
Investment [Line Items]
Lease escrow deposits	374,000	1,500,000		374,000
Holiday Acquisition Holdings [Member]
Investment [Line Items]
Lessor Leasing Arrangements, Operating Leases, Term of Contract	17 years 0 months 0 days
Payments for Capital Improvements	$ 1,126,000

XML

Fair Value of Financial Instruments (Fair Value Measurements, Nonrecurring) (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans and Leases Receivable, Net Amount	$ 63,630,000	$ 60,639,000
Fair Value, Inputs, Level 2 [Member] | Variable Interest Rate Debt [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt Instrument, Fair Value Disclosure	624,000,000	537,000,000
Fair Value, Inputs, Level 2 [Member] | Fixed Interest Rate Debt [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt Instrument, Fair Value Disclosure	254,150,000	79,365,000
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans and Leases Receivable, Net Amount	72,435,000	67,201,000
Reported Value Measurement [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans and Leases Receivable, Net Amount	63,630,000	60,639,000
Reported Value Measurement [Member] | Variable Interest Rate Debt [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt Instrument, Fair Value Disclosure	624,000,000	537,000,000
Reported Value Measurement [Member] | Fixed Interest Rate Debt [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt Instrument, Fair Value Disclosure	$ 238,726,000	$ 80,080,000

XML

Debt (Schedule of Interest Rate Derivatives) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014
Interest Rate Swap, Date Entered, May 2012 [Member]
Derivative [Line Items]
Derivative, Fixed Interest Rate	3.29%
Debt Instrument, Description of Variable Rate Basis	1-month LIBOR
Derivative, Basis Spread on Variable Rate	1.75%
Derivative, Notional Amount	$ 40,000
Interest Rate Cash Flow Hedge Liability at Fair Value	(98)
Interest Rate Swap, Date Entered, June 2013 [Member]
Derivative [Line Items]
Derivative, Fixed Interest Rate	3.86%
Debt Instrument, Description of Variable Rate Basis	1-month LIBOR
Derivative, Basis Spread on Variable Rate	1.75%
Derivative, Notional Amount	80,000
Interest Rate Cash Flow Hedge Liability at Fair Value	(1,814)
Interest Rate Swap, Date Entered, March 2014 [Member]
Derivative [Line Items]
Derivative, Fixed Interest Rate	3.91%
Debt Instrument, Description of Variable Rate Basis	1-month LIBOR
Derivative, Basis Spread on Variable Rate	1.75%
Derivative, Notional Amount	130,000
Interest Rate Cash Flow Hedge Liability at Fair Value	$ (3,281)

XML

Schedule IV - Mortgage Loans on Real Estate Schedule IV - Mortgage Loans on Real Estate (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Mortgage Loans on Real Estate [Line Items]
Mortgage Loans on Real Estate, Carrying Amount of Mortgages	$ 34,850
Mortgage Loans on Real Estate, Principal Amount of Delinquent Loans		0
Skilled Nursing Facility [Member] | First Mortgage [Member] | Grundy, VA [Member]
Mortgage Loans on Real Estate [Line Items]
Mortgage Loans on Real Estate, Interest Rate	8.00%
Mortgage Loans on Real Estate, Final Maturity Date	2032
Mortgage Loans on Real Estate, Periodic Payment Terms	31000
Mortgage Loans on Real Estate, Carrying Amount of Mortgages	4,396
Mortgage Loans on Real Estate, Carrying Amount of Mortgages	3,099
Skilled Nursing Facility [Member] | First Mortgage [Member] | Virginia Beach, VA [Member]
Mortgage Loans on Real Estate [Line Items]
Mortgage Loans on Real Estate, Interest Rate	8.00%
Mortgage Loans on Real Estate, Final Maturity Date	2031
Mortgage Loans on Real Estate, Periodic Payment Terms	31000
Mortgage Loans on Real Estate, Carrying Amount of Mortgages	3,814
Mortgage Loans on Real Estate, Carrying Amount of Mortgages	2,795
Skilled Nursing Facility [Member] | First Mortgage [Member] | Lexington, VA [Member]
Mortgage Loans on Real Estate [Line Items]
Mortgage Loans on Real Estate, Interest Rate	8.00%
Mortgage Loans on Real Estate, Final Maturity Date	2032
Mortgage Loans on Real Estate, Periodic Payment Terms	21000
Mortgage Loans on Real Estate, Carrying Amount of Mortgages	3,089
Mortgage Loans on Real Estate, Carrying Amount of Mortgages	1,989
Skilled Nursing Facility [Member] | First Mortgage [Member] | Brookneal, VA [Member]
Mortgage Loans on Real Estate [Line Items]
Mortgage Loans on Real Estate, Interest Rate	8.00%
Mortgage Loans on Real Estate, Final Maturity Date	2031
Mortgage Loans on Real Estate, Periodic Payment Terms	21000
Mortgage Loans on Real Estate, Carrying Amount of Mortgages	2,780
Mortgage Loans on Real Estate, Carrying Amount of Mortgages	1,959
Skilled Nursing Facility [Member] | First Mortgage [Member] | Laurel Fork, VA [Member]
Mortgage Loans on Real Estate [Line Items]
Mortgage Loans on Real Estate, Interest Rate	8.00%
Mortgage Loans on Real Estate, Final Maturity Date	2030
Mortgage Loans on Real Estate, Periodic Payment Terms	20000
Mortgage Loans on Real Estate, Carrying Amount of Mortgages	2,672
Mortgage Loans on Real Estate, Carrying Amount of Mortgages	1,893
Skilled Nursing Facility [Member] | First Mortgage [Member] | Front Royal, VA [Member]
Mortgage Loans on Real Estate [Line Items]
Mortgage Loans on Real Estate, Interest Rate	9.60%
Mortgage Loans on Real Estate, Final Maturity Date	2027
Mortgage Loans on Real Estate, Periodic Payment Terms	22000
Mortgage Loans on Real Estate, Carrying Amount of Mortgages	2,367
Mortgage Loans on Real Estate, Carrying Amount of Mortgages	1,588
Skilled Nursing Facility [Member] | Second Mortgage [Member]
Mortgage Loans on Real Estate [Line Items]
Mortgage Loans on Real Estate, Interest Rate	14.00%
Mortgage Loans on Real Estate, Final Maturity Date	2015
Mortgage Loans on Real Estate, Periodic Payment Terms	Interest Only
Mortgage Loans on Real Estate, Carrying Amount of Mortgages	1,000
Mortgage Loans on Real Estate, Carrying Amount of Mortgages	1,000
Assisted Living Facility [Member] | First Mortgage [Member] | Owatonna, MN [Member]
Mortgage Loans on Real Estate [Line Items]
Mortgage Loans on Real Estate, Interest Rate	7.50%
Mortgage Loans on Real Estate, Final Maturity Date	2018
Mortgage Loans on Real Estate, Periodic Payment Terms	38000
Mortgage Loans on Real Estate, Carrying Amount of Mortgages	5,033
Mortgage Loans on Real Estate, Carrying Amount of Mortgages	3,657
Assisted Living Facility [Member] | Second Mortgage [Member] | Ocala, FL [Member]
Mortgage Loans on Real Estate [Line Items]
Mortgage Loans on Real Estate, Interest Rate	13.00%
Mortgage Loans on Real Estate, Final Maturity Date	2014
Mortgage Loans on Real Estate, Periodic Payment Terms	Interest Only
Mortgage Loans on Real Estate, Carrying Amount of Mortgages	2,500
Mortgage Loans on Real Estate, Carrying Amount of Mortgages	2,500
Assisted Living Facility [Member] | Second Mortgage [Member] | Naples, FL [Member]
Mortgage Loans on Real Estate [Line Items]
Mortgage Loans on Real Estate, Interest Rate	12.00%
Mortgage Loans on Real Estate, Final Maturity Date	2016
Mortgage Loans on Real Estate, Periodic Payment Terms	Interest Only
Mortgage Loans on Real Estate, Carrying Amount of Mortgages	2,500
Mortgage Loans on Real Estate, Carrying Amount of Mortgages	2,500
Transitional Rehabilitation Facility [Member] | Construction Loans [Member] | Mesa, AZ [Member]
Mortgage Loans on Real Estate [Line Items]
Mortgage Loans on Real Estate, Interest Rate	10.00%
Mortgage Loans on Real Estate, Final Maturity Date	2015
Mortgage Loans on Real Estate, Periodic Payment Terms	Interest Only
Mortgage Loans on Real Estate, Carrying Amount of Mortgages	13,870
Mortgage Loans on Real Estate, Carrying Amount of Mortgages	$ 11,870

XML

Real Estate (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014 properties	Dec. 31, 2013	Dec. 31, 2012
Number of Real Estate Properties	172
Real Estate Investments During The Period	$ 555,453,000
Number of States in which Entity Operates	31
Noncash or Part Noncash Acquisition, Value of Liabilities Assumed	2,091,000	3,086,000	0
Nonportfolio Assets, Original Cost	900,000
Real Estate Investment Property, Portfolio Assets	1,987,949,000
Number of Lessees	24
Operating Leases, Income Statement, Lease Revenue	166,279,000	106,029,000	81,482,000
Real estate purchase liabilities	3,000,000	2,600,000
Security Deposit	21,648,000	22,775,000
Prestige Senior Living [Member]
Number Of Real Estate Properties Acquired	4
Lessor Leasing Arrangements, Operating Leases, Term of Contract	15 years 0 months 0 days
Significant Acquisition, Cost, Cash	40,115,000
Asset Purchase, Contingent Consideration Arrangements, Earn Out Payments	6,390,000
Real estate purchase liabilities	3,000,000
Initial lease rate	8.40%
Chancellor Healthcare [Member]
Capital Improvements Commitment	500,000
Chancellor Healthcare [Member] | Milwaukie, OR [Member]
Lessor Leasing Arrangements, Operating Leases, Term of Contract	15 years 0 months 0 days
Significant Acquisition, Cost, Cash	5,650,000
Number of Units in Real Estate Property	25
Initial lease rate	8.00%
Number of additional lease renewal options	2
Lessor Leasing Arrangements, Operating Leases, Renewal Term	10 years 0 months 0 days
Chancellor Healthcare [Member] | Sacramento, CA [Member]
Lessor Leasing Arrangements, Operating Leases, Term of Contract	15 years 0 months 0 days
Significant Acquisition, Cost, Cash	11,500,000
Number of Units in Real Estate Property	56
Initial lease rate	8.00%
Bickford Senior Living [Member]
Number of Real Estate Properties	31
Operating Leases, Future Minimum Payments Receivable, Current	22,595,000
Operating Leases, Income Statement, Lease Revenue	21,421,000	14,586,000	5,164,000
Percentage of Continuing Revenue	12.00%	12.00%	6.00%
Joint Venture Contributed Properties Ownership Interest Retained	85.00%
Joint Venture Contributed Properties Ownership Interest Surrendered	15.00%
Bickford Senior Living [Member] | Middletown, OH [Member]
Significant acquisitions and disposals, acquisition costs or sale proceeds	16,488,000
Asset Purchase Transaction Costs	65,000
Noncash or Part Noncash Acquisition, Noncash Financial or Equity Instrument Consideration, Rate	2.90%
Noncash or Part Noncash Acquisition, Debt Assumed	9,535,000
Noncash or Part Noncash Acquisition, Value of Liabilities Assumed	7,858,000
Number of Units in Real Estate Property	101
Holiday Acquisition Holdings [Member]
Number Of Real Estate Properties Acquired	25
Lessor Leasing Arrangements, Operating Leases, Term of Contract	17 years 0 months 0 days
Operating Leases, Income Statement, Lease Revenue	43,817,000
Percentage of Continuing Revenue	25.00%
Initial Lease Amount	31,915,000
Number of Years Until Lease Escalator Changes	3 years 0 months 0 days
Lease Escalator Rate, From Lease Year 1 to Lease Year 3	4.50%
Lease Escalator Rate, After Lease Year 3	3.50%
National Healthcare Corporation [Member]
Number of Real Estate Properties	42
Number of Master Leases	2
Operating Leases, Income Statement, Lease Revenue	36,446,000	34,756,000	33,056,000
Percentage of Continuing Revenue	21.00%	29.00%	35.00%
Percentage rent	2,307,000	3,021,000	2,527,000
Senior Housing Community [Member] | Senior Living Communities [Member]
Number Of Real Estate Properties Acquired	8
Real Estate Investments During The Period	476,000,000
Lessor Leasing Arrangements, Operating Leases, Term of Contract	15 years 0 months 0 days
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual	1,533,000
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual	1,403,000
Number of Units in Real Estate Property	1,671
Initial Lease Amount	31,000,000
Business Acquisition, Percentage of Voting Interests Acquired	100.00%
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Land	32,410,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment	443,590,000
Business Acquisition, Cost of Acquired Entity, Transaction Costs	89,000
Lease Escalator Rate Lease Year 2 to Lease Year 4	4.00%
Lease Escalator Rate after Lease Year 4	3.00%
Security Deposit	10,000,000
Senior Housing Community [Member] | Chancellor Healthcare [Member]
Number Of Real Estate Properties Acquired	2
Real Estate Investments During The Period	17,150,000
Skilled Nursing Facility [Member] | Prestige Senior Living [Member]
Number Of Real Estate Properties Acquired	3
Real Estate Investments During The Period	45,115,000
Number of Units in Real Estate Property	196
Skilled Nursing Facility [Member] | Senior Living Management [Member]
Number Of Real Estate Properties Acquired	1
Real Estate Investments During The Period	700,000
Capital Improvements Commitment Funded	13,000
Assisted Living Facility [Member] | Prestige Senior Living [Member]
Number of Units in Real Estate Property	105
NHC - 2013 Lease [Member] | National Healthcare Corporation [Member]
Number Of Real Estate Properties Acquired	7
Minimum Annual Lease Income	3,450,000
Percentage Rent Rate	0.04
Number of Purchase Option Years at End of Lease Term	3 years 0 months 0 days
Purchase Option Amount	49,000,000
NHC - 1991 Lease [Member] | National Healthcare Corporation [Member]
Number of Real Estate Properties	35
Minimum Annual Lease Income	30,750,000
Percentage Rent Rate	0.04
Number of additional lease renewal options	2
Lessor Leasing Arrangements, Operating Leases, Renewal Term	5 years 0 months 0 days
Capital Improvement Commitment [Member] | Prestige Senior Living [Member]
Number Of Real Estate Properties Acquired	2
Capital Improvements Commitment	2,000,000
Bickford Development Properties [Member]
Number of Real Estate Properties	3
Initial lease rate	9.00%
Construction and Development Costs	7,811,000
Bickford Development Properties [Member] | Unstabilized Portfolio [Member]
Number of Real Estate Properties	2
2015 Bickford Development Properties [Member]
Number of Real Estate Properties To Be Constructed	5
Estimated Future Development Cost	$ 55,000,000
Number of Units in Real Estate Property	60
Independent Living Facility [Member] | National Healthcare Corporation [Member]
Number of Real Estate Properties	3
Medical Office Building [Member]
Number of Real Estate Properties	2
Hospital [Member]
Number of Real Estate Properties	3
Senior Housing Community [Member]
Number of Real Estate Properties	103
Skilled Nursing Facility [Member]
Number of Real Estate Properties	64
Skilled Nursing Facility [Member] | National Healthcare Corporation [Member]
Number of Real Estate Properties	39
Skilled Nursing Facility [Member] | Subleased Facilities [Member] | National Healthcare Corporation [Member]
Number of Real Estate Properties	4

XML

Debt Debt (Tables)

12 Months Ended

Dec. 31, 2014

Schedule of Debt [Abstract]

Schedule of Long-term Debt Instruments [Table Text Block]

Debt consists of the following (in thousands):

	As of December 31,
	2014		2013
Convertible senior notes - unsecured (net of discount of $6,963)	$	193,037	$	—
Revolving credit facility - unsecured	374,000		167,000
Bank term loans - unsecured	250,000		370,000
HUD mortgage loans (net of discount of $1,662)	45,689		—
Fannie Mae term loans - secured (including premium of $1,756)	—		80,080
	$	862,726	$	617,080

Schedule of Interest Expense [Table Text Block]

The following table summarizes interest expense (in thousands):

	Year Ended December 31,
	2014			2013			2012
Interest expense at contractual rates	$	23,878		$	8,944		$	3,380
Capitalized interest	(576		)	(378		)	(208		)
Amortization of debt premiums, discounts and issuance costs	2,580			247			320
Unamortized premium written off as a result of debt payoff	(1,655		)	—			—
Debt issuance costs expensed due to credit facility modifications	2,145			416			—
Total interest expense	$	26,372		$	9,229		$	3,492

Schedule of Interest Rate Derivatives [Table Text Block]

December 31, 2014 (dollars in thousands):

Date Entered	Maturity Date	Fixed Rate	Rate Index	Notional Amount		Fair Value
May 2012	April 2019	3.29%	1-month LIBOR	$	40,000	$	(98	)
June 2013	June 2020	3.86%	1-month LIBOR	$	80,000	$	(1,814	)
March 2014	June 2020	3.91%	1-month LIBOR	$	130,000	$	(3,281	)

XML

Schedule IV - Mortgage Loans on Real Estate Schedule IV - Mortgage Loans on Real Estate (Roll-Forward) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Schedule IV - Mortgage Loans on Real Estate [Abstract]
Mortgage Loans on Real Estate, January 1	$ 34,926,000	$ 68,214,000	$ 78,672,000
Mortgage Loans on Real Estate, New Mortgage Loans	1,131,000	1,369,000	0
Mortgage Loans On Real Estate Total Additions	1,131,000	1,369,000	0
Settlement of mortgage note by real estate acquisition	0	13,741,000	0
Mortgage Loans On Real Estate, Impairment	0	4,037,000	2,300,000
Mortgage Loans on Real Estate, Collections of Principal	1,207,000	16,879,000	8,158,000
Mortgage Loans On Real Estate, Total Deductions	1,207,000	34,657,000	10,458,000
Mortgage Loans on Real Estate, December 31	$ 34,850,000	$ 34,926,000	$ 68,214,000

XML

Selected Quarterly Financial Data (Unaudited) Selected Quarterly Financial Data (Unaudited) (Quarterly Financial Information - 2013) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Selected Quarterly Financial Data [Abstract]
Net revenues	$ 45,735	$ 44,478	$ 44,160	$ 43,136	$ 32,790	$ 30,845	$ 27,089	$ 27,104	$ 177,509	$ 117,828	$ 93,317
Investment and other gains	0	0	0	0	3,267	3	14	22
Income from continuing operations attributable to common stockholders	27,532	25,250	25,294	23,533	24,114	22,035	18,300	14,050	101,609	78,499	72,667
Discontinued operations	0	0	0	0	3,661	20,709	1,621	1,693
Net income attributable to common stockholders	$ 27,532	$ 25,250	$ 25,294	$ 23,533	$ 27,775	$ 42,744	$ 19,921	$ 15,743	$ 101,609	$ 106,183	$ 90,731
Weighted average common shares outstanding:
Basic	34,343,706	33,055,992	33,052,750	33,051,415	29,831,176	27,876,176	27,876,176	27,876,176	33,375,966	28,362,398	27,811,813
Diluted	34,402,969	33,088,570	33,087,283	33,085,232	29,860,614	27,905,545	27,913,727	27,911,584	33,416,014	28,397,702	27,838,720
Basic:
Income from continuing operations attributable to common stockholders	$ 0.80	$ 0.76	$ 0.77	$ 0.71	$ 0.81	$ 0.79	$ 0.65	$ 0.50	$ 3.04	$ 2.77	$ 2.61
Discontinued operations	$ 0.00	$ 0.00	$ 0.00	$ 0.00	$ 0.12	$ 0.74	$ 0.06	$ 0.06	$ 0.00	$ 0.97	$ 0.65
Net income per common share attributable to common stockholders	$ 0.80	$ 0.76	$ 0.77	$ 0.71	$ 0.93	$ 1.53	$ 0.71	$ 0.56	$ 3.04	$ 3.74	$ 3.26
Diluted:
Income from continuing operations attributable to common stockholders	$ 0.80	$ 0.76	$ 0.76	$ 0.71	$ 0.81	$ 0.79	$ 0.65	$ 0.50	$ 3.04	$ 2.77	$ 2.61
Discontinued operations	$ 0.00	$ 0.00	$ 0.00	$ 0.00	$ 0.12	$ 0.74	$ 0.06	$ 0.06	$ 0.00	$ 0.97	$ 0.65
Net income per common share attributable to common stockholders	$ 0.80	$ 0.76	$ 0.76	$ 0.71	$ 0.93	$ 1.53	$ 0.71	$ 0.56	$ 3.04	$ 3.74	$ 3.26

XML

Commitments And Contingencies (Details) (USD $)	12 Months Ended			9 Months Ended
	Dec. 31, 2014 properties	Dec. 31, 2013	Dec. 31, 2012	Sep. 30, 2014	Jun. 30, 2013	Aug. 30, 2013 properties
Number of Real Estate Properties	172
Cash Paid In Settlement Of Contingent Purchase Consideration Liability	$ 2,600,000	$ 0	$ 5,222,000
Gain on purchase liability settlement	0	(3,256,000)	0
Loans Receivable, Description of Variable Rate Basis	.0217
Real Estate Investments During The Period	555,453,000
Security Deposit	21,648,000	22,775,000
Payments for Capital Improvements	(4,211,000)	(6,773,000)	0
Real estate purchase liabilities	3,000,000	2,600,000
Lease Inducement Payment, First Installment Year	P2Y0M0D
Lease Inducement Payment, Second Installment Year	P3Y0M0D
Lease Inducement Payment, Third Installment Year	P4Y0M0D
Loans and Leases Receivable, Net Amount	63,630,000	60,639,000
Acquisition Helix Healthcare [Member]
Significant acquisitions and disposals, acquisition costs or sale proceeds				12,500,000
Conditional future payments related to purchase/leaseback transaction				1,000,000
Prestige Senior Living [Member]
Construction and Development Costs	(1,555,000)
Bickford Development Properties [Member]
Construction and Development Costs	(7,811,000)
Number of Real Estate Properties	3
Initial lease rate	9.00%
Initial Bickford LOC Commitment Amount [Member]
Letters of Credit Outstanding, Amount	2,785,000
Bickford LOC Commitment Amount [Member]
Letters of Credit Outstanding, Amount	3,550,000
Chancellor - Loma Linda [Member]
Construction and Development Costs	(4,231,000)
Chancellor - Baltimore [Member]
Construction and Development Costs	(353,000)
Kentucky River Commitment [Member]
Construction and Development Costs	(7,583,000)
Significant development and lease transactions				8,000,000
Sante Partners Commitment [Member]
Construction and Development Costs	(2,621,000)
Number of Lease Inducement Payments	2
Lease Incentive Commitment Assessed As Not Probable	1,000,000
Construction Loans [Member]
Supplemental Construction Loan Commitment Draw	2,000,000
Construction of transitional rehabilitation center, number of beds	70
Chancellor Healthcare [Member]
Capital improvements commitment	500,000
Discovery Regency Pointe [Member]
Real estate purchase liabilities				2,500,000
Discovery Regency Pointe [Member] | 1st Contingent Payment Amount [Member]
Real estate purchase liabilities				750,000
SeniorTrust [Member]
Loans and Leases Receivable, Net Amount					15,000,000
Elder Trust [Member]
Number of Real Estate Properties						7
Significant Acquisition, Cost, Receivable Cancelled						13,741,000
Significant Acquisition, Cost, Cash						23,676,000
Helix Healthcare [Member]
Cash Paid In Settlement Of Contingent Purchase Consideration Liability	1,000,000
Sante Partners [Member]
Lease Incentive Commitment Assessed As Not Probable	0
Fundamental Long Term Care Holdings [Member]
Number of Real Estate Properties	2			2
Significant Acquisition, Cost, Cash	26,150,000
Cash Paid In Settlement Of Contingent Purchase Consideration Liability				1,600,000
Business Combination, Contingent Consideration, Liability				1,600,000
Development Commitment [Member] | Chancellor - Loma Linda [Member]
Construction of transitional rehabilitation center, number of beds	46
Development Commitment [Member] | Chancellor - Baltimore [Member]
Construction of transitional rehabilitation center, number of beds	63
Development Commitment [Member] | Chancellor Healthcare [Member]
Maximum Commitment For All Active Development Projects	7,500,000
Lessor Leasing Arrangements, Operating Leases, Term of Contract	15 years 0 months 0 days
Initial lease rate	9.00%
Sante Partners Commitment [Member]
Capital improvements commitment	3,500,000
Capital Improvements Reserve [Member]
Security Deposit	$ 374,000	$ 1,500,000
Carmel, IN [Member] | Bickford Development Properties [Member]
Number of Real Estate Properties	1

XML

Schedule III - Real Estate and Accumulated Depreciation Schedule III - Real Estate and Accumulated Depreciation (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	$ 47,352,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	127,566,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	1,845,610,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	15,674,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	127,565,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	1,861,284,000
SEC Schedule III, Real Estate, Gross	1,988,849,000	1,422,002,000	698,536,000	541,493,000
SEC Schedule III, Real Estate Accumulated Depreciation	212,300,000	174,262,000	163,146,000	146,698,000
Property, Plant and Equipment, Useful Life	40 years 0 months 0 days
Entity Incorporate, Date of Incorporation, Year	1991
SEC Schedule III, Real Estate, Federal Income Tax Basis	1,742,086
Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	25,350,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	417,270,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	25,350,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	417,270,000
SEC Schedule III, Real Estate, Gross	442,620,000
SEC Schedule III, Real Estate Accumulated Depreciation	129,074,000
Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	47,352,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	31,299,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	405,522,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	1,627,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	31,299,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	407,149,000
SEC Schedule III, Real Estate, Gross	438,448,000
SEC Schedule III, Real Estate Accumulated Depreciation	35,618,000
Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	22,108,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	480,504,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	22,108,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	480,504,000
SEC Schedule III, Real Estate, Gross	502,612,000
SEC Schedule III, Real Estate Accumulated Depreciation	18,935,000
Senior Living Campus [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	9,651,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	59,759,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	6,398,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	9,651,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	66,157,000
SEC Schedule III, Real Estate, Gross	75,808,000
SEC Schedule III, Real Estate Accumulated Depreciation	13,442,000
Entrance-Fee Communities [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	31,040,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	436,120,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	31,040,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	436,120,000
SEC Schedule III, Real Estate, Gross	467,160,000
SEC Schedule III, Real Estate Accumulated Depreciation	0
Medical Office Building [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	796,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	9,690,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	796,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	9,690,000
SEC Schedule III, Real Estate, Gross	10,486,000
SEC Schedule III, Real Estate Accumulated Depreciation	6,505,000
Hospital [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	7,164,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	36,068,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	7,583,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	7,164,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	43,651,000
SEC Schedule III, Real Estate, Gross	50,815,000
SEC Schedule III, Real Estate Accumulated Depreciation	8,549,000
Total Continuing Operations Properties [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	47,352,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	127,408,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	1,844,933,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	15,608,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	127,408,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	1,860,541,000
SEC Schedule III, Real Estate, Gross	1,987,949,000
SEC Schedule III, Real Estate Accumulated Depreciation	212,123,000
Corporate Office [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	158,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	677,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	66,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	157,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	743,000
SEC Schedule III, Real Estate, Gross	900,000
SEC Schedule III, Real Estate Accumulated Depreciation	177,000
Anniston, AL [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	70,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	4,477,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	70,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	4,477,000
SEC Schedule III, Real Estate, Gross	4,547,000
SEC Schedule III, Real Estate Accumulated Depreciation		3,206,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Moulton, AL [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	25,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	688,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	25,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	688,000
SEC Schedule III, Real Estate, Gross	713,000
SEC Schedule III, Real Estate Accumulated Depreciation	688,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Avondale, AZ [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	453,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	6,678,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	453,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	6,678,000
SEC Schedule III, Real Estate, Gross	7,131,000
SEC Schedule III, Real Estate Accumulated Depreciation	3,241,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Aug. 13, 1996
Brooksville, FL [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	1,217,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	16,166,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	1,217,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	16,166,000
SEC Schedule III, Real Estate, Gross	17,383,000
SEC Schedule III, Real Estate Accumulated Depreciation	1,987,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Feb. 01, 2010
Crystal River, FL [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	912,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	12,117,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	912,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	12,117,000
SEC Schedule III, Real Estate, Gross	13,029,000
SEC Schedule III, Real Estate Accumulated Depreciation	1,489,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Feb. 01, 2010
Dade City, FL [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	605,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	8,042,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	605,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	8,042,000
SEC Schedule III, Real Estate, Gross	8,647,000
SEC Schedule III, Real Estate Accumulated Depreciation	988,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Feb. 01, 2010
Hudson, FL [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	1,290,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	22,392,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	1,290,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	22,392,000
SEC Schedule III, Real Estate, Gross	23,682,000
SEC Schedule III, Real Estate Accumulated Depreciation	8,942,000
Real Estate And Accumulated Depreciation Date Acquired String	Various
Merritt Island, FL [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	701,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	8,869,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	701,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	8,869,000
SEC Schedule III, Real Estate, Gross	9,570,000
SEC Schedule III, Real Estate Accumulated Depreciation	6,546,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
New Port Richey, FL [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	228,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	3,023,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	228,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	3,023,000
SEC Schedule III, Real Estate, Gross	3,251,000
SEC Schedule III, Real Estate Accumulated Depreciation	372,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Feb. 01, 2010
Plant City, FL [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	405,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	8,777,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	405,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	8,777,000
SEC Schedule III, Real Estate, Gross	9,182,000
SEC Schedule III, Real Estate Accumulated Depreciation	6,634,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Stuart, FL [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	787,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	9,048,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	787,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	9,048,000
SEC Schedule III, Real Estate, Gross	9,835,000
SEC Schedule III, Real Estate Accumulated Depreciation	6,771,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Trenton, FL [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	851,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	11,312,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	851,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	11,312,000
SEC Schedule III, Real Estate, Gross	12,163,000
SEC Schedule III, Real Estate Accumulated Depreciation	1,390,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Feb. 01, 2010
Grangeville, ID [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	122,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	2,491,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	122,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	2,491,000
SEC Schedule III, Real Estate, Gross	2,613,000
SEC Schedule III, Real Estate Accumulated Depreciation	1,229,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Aug. 13, 1996
Glasgow, KY [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	33,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	2,110,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	33,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	2,110,000
SEC Schedule III, Real Estate, Gross	2,143,000
SEC Schedule III, Real Estate Accumulated Depreciation	1,902,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Greenfield, MA [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	370,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	4,341,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	370,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	4,341,000
SEC Schedule III, Real Estate, Gross	4,711,000
SEC Schedule III, Real Estate Accumulated Depreciation	153,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Aug. 30, 2013
Holyoke, MA [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	110,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	943,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	110,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	943,000
SEC Schedule III, Real Estate, Gross	1,053,000
SEC Schedule III, Real Estate Accumulated Depreciation	35,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Aug. 30, 2013
Quincy, MA [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	450,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	710,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	450,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	710,000
SEC Schedule III, Real Estate, Gross	1,160,000
SEC Schedule III, Real Estate Accumulated Depreciation	24,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Aug. 30, 2013
Taunton, MA [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	900,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	5,906,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	900,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	5,906,000
SEC Schedule III, Real Estate, Gross	6,806,000
SEC Schedule III, Real Estate Accumulated Depreciation	210,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Aug. 30, 2013
Desloge, MO [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	178,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	3,804,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	178,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	3,804,000
SEC Schedule III, Real Estate, Gross	3,982,000
SEC Schedule III, Real Estate Accumulated Depreciation	2,989,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Joplin, MO [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	175,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	4,034,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	175,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	4,034,000
SEC Schedule III, Real Estate, Gross	4,209,000
SEC Schedule III, Real Estate Accumulated Depreciation	2,501,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Kennett, MO [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	180,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	4,928,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	180,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	4,928,000
SEC Schedule III, Real Estate, Gross	5,108,000
SEC Schedule III, Real Estate Accumulated Depreciation	3,919,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Maryland Heights, MO [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	482,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	5,512,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	482,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	5,512,000
SEC Schedule III, Real Estate, Gross	5,994,000
SEC Schedule III, Real Estate Accumulated Depreciation	4,953,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
St. Charles, MO [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	150,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	4,790,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	150,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	4,790,000
SEC Schedule III, Real Estate, Gross	4,940,000
SEC Schedule III, Real Estate Accumulated Depreciation	3,757,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
St. Charles, MO [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	344,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	3,181,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	344,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	3,181,000
SEC Schedule III, Real Estate, Gross	3,525,000
SEC Schedule III, Real Estate Accumulated Depreciation	2,284,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Voorhees, NJ [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	670,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	23,710,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	670,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	23,710,000
SEC Schedule III, Real Estate, Gross	24,380,000
SEC Schedule III, Real Estate Accumulated Depreciation	633,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 23, 2013
Gahanna, OH [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	920,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	22,919,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	920,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	22,919,000
SEC Schedule III, Real Estate, Gross	23,839,000
SEC Schedule III, Real Estate Accumulated Depreciation	629,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 23, 2013
Broken Arrow, OK [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	2,660,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	18,476,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	2,660,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	18,476,000
SEC Schedule III, Real Estate, Gross	21,136,000
SEC Schedule III, Real Estate Accumulated Depreciation	513,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 23, 2013
Albany, OR [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	190,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	11,150,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	190,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	11,150,000
SEC Schedule III, Real Estate, Gross	11,340,000
SEC Schedule III, Real Estate Accumulated Depreciation	219,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Mar. 31, 2014
Creswell, OR [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	470,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	9,642,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	470,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	9,642,000
SEC Schedule III, Real Estate, Gross	10,112,000
SEC Schedule III, Real Estate Accumulated Depreciation	205,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Mar. 31, 2014
Forest Grove, OR [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	540,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	12,277,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	540,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	12,277,000
SEC Schedule III, Real Estate, Gross	12,817,000
SEC Schedule III, Real Estate Accumulated Depreciation	257,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Mar. 31, 2014
Newberg, OR [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	1,080,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	19,187,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	1,080,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	19,187,000
SEC Schedule III, Real Estate, Gross	20,267,000
SEC Schedule III, Real Estate Accumulated Depreciation	529,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 23, 2013
Myrtle Beach, SC [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	1,310,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	26,229,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	1,310,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	26,229,000
SEC Schedule III, Real Estate, Gross	27,539,000
SEC Schedule III, Real Estate Accumulated Depreciation	702,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 23, 2013
Myrtle Beach, SC [Member] | Entrance-Fee Communities [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	3,910,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	82,140,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	3,910,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	82,140,000
SEC Schedule III, Real Estate, Gross	86,050,000
SEC Schedule III, Real Estate Accumulated Depreciation	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 17, 2014
Greenville, SC [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	560,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	16,547,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	560,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	16,547,000
SEC Schedule III, Real Estate, Gross	17,107,000
SEC Schedule III, Real Estate Accumulated Depreciation	460,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 23, 2013
Greenville, SC [Member] | Entrance-Fee Communities [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	5,850,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	90,760,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	5,850,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	90,760,000
SEC Schedule III, Real Estate, Gross	96,610,000
SEC Schedule III, Real Estate Accumulated Depreciation	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 17, 2014
Manchester, NH [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	790,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	20,077,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	790,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	20,077,000
SEC Schedule III, Real Estate, Gross	20,867,000
SEC Schedule III, Real Estate Accumulated Depreciation	693,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Aug. 30, 2013
Epsom, NH [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	630,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	2,191,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	630,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	2,191,000
SEC Schedule III, Real Estate, Gross	2,821,000
SEC Schedule III, Real Estate Accumulated Depreciation	81,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Aug. 30, 2013
Anderson, SC [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	308,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	4,643,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	308,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	4,643,000
SEC Schedule III, Real Estate, Gross	4,951,000
SEC Schedule III, Real Estate Accumulated Depreciation	3,998,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Greenwood, SC [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	222,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	3,457,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	222,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	3,457,000
SEC Schedule III, Real Estate, Gross	3,679,000
SEC Schedule III, Real Estate Accumulated Depreciation	2,925,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Laurens, SC [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	42,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	3,426,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	42,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	3,426,000
SEC Schedule III, Real Estate, Gross	3,468,000
SEC Schedule III, Real Estate Accumulated Depreciation	2,685,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Orangeburg, SC [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	300,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	3,715,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	300,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	3,715,000
SEC Schedule III, Real Estate, Gross	4,015,000
SEC Schedule III, Real Estate Accumulated Depreciation	640,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Sep. 25, 2008
Athens, TN [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	38,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	1,463,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	38,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	1,463,000
SEC Schedule III, Real Estate, Gross	1,501,000
SEC Schedule III, Real Estate Accumulated Depreciation	1,314,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Chattanooga, TN [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	143,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	2,309,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	143,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	2,309,000
SEC Schedule III, Real Estate, Gross	2,452,000
SEC Schedule III, Real Estate Accumulated Depreciation	2,044,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Chattanooga, TN [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	9,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	1,567,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	9,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	1,567,000
SEC Schedule III, Real Estate, Gross	1,576,000
SEC Schedule III, Real Estate Accumulated Depreciation	1,148,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Dickson, TN [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	90,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	3,541,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	90,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	3,541,000
SEC Schedule III, Real Estate, Gross	3,631,000
SEC Schedule III, Real Estate Accumulated Depreciation	2,798,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Franklin, TN [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	47,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	1,130,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	47,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	1,130,000
SEC Schedule III, Real Estate, Gross	1,177,000
SEC Schedule III, Real Estate Accumulated Depreciation	955,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Hendersonville, TN [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	363,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	3,837,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	363,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	3,837,000
SEC Schedule III, Real Estate, Gross	4,200,000
SEC Schedule III, Real Estate Accumulated Depreciation	2,667,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Johnson City, TN [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	85,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	1,918,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	85,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	1,918,000
SEC Schedule III, Real Estate, Gross	2,003,000
SEC Schedule III, Real Estate Accumulated Depreciation	1,788,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Johnson City, TN [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	55,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	4,077,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	55,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	4,077,000
SEC Schedule III, Real Estate, Gross	4,132,000
SEC Schedule III, Real Estate Accumulated Depreciation	2,588,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Lewisburg, TN [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	46,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	994,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	46,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	994,000
SEC Schedule III, Real Estate, Gross	1,040,000
SEC Schedule III, Real Estate Accumulated Depreciation	928,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
McMinnville, TN [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	73,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	3,618,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	73,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	3,618,000
SEC Schedule III, Real Estate, Gross	3,691,000
SEC Schedule III, Real Estate Accumulated Depreciation	2,814,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Milan, TN [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	41,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	1,826,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	41,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	1,826,000
SEC Schedule III, Real Estate, Gross	1,867,000
SEC Schedule III, Real Estate Accumulated Depreciation	1,545,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Pulaski, TN [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	53,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	3,921,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	53,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	3,921,000
SEC Schedule III, Real Estate, Gross	3,974,000
SEC Schedule III, Real Estate Accumulated Depreciation	3,090,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Lawrenburg, TN [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	98,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	2,901,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	98,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	2,901,000
SEC Schedule III, Real Estate, Gross	2,999,000
SEC Schedule III, Real Estate Accumulated Depreciation	2,113,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Dunlap, TN [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	35,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	3,679,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	35,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	3,679,000
SEC Schedule III, Real Estate, Gross	3,714,000
SEC Schedule III, Real Estate Accumulated Depreciation	2,651,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Smithville, TN [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	35,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	3,816,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	35,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	3,816,000
SEC Schedule III, Real Estate, Gross	3,851,000
SEC Schedule III, Real Estate Accumulated Depreciation	2,923,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 18, 1991
Somerville, TN [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	26,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	678,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	26,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	678,000
SEC Schedule III, Real Estate, Gross	704,000
SEC Schedule III, Real Estate Accumulated Depreciation	637,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 19, 1991
Sparta, TN [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	80,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	1,602,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	80,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	1,602,000
SEC Schedule III, Real Estate, Gross	1,682,000
SEC Schedule III, Real Estate Accumulated Depreciation	1,311,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 20, 1991
Canton, TX [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	420,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	12,330,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	420,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	12,330,000
SEC Schedule III, Real Estate, Gross	12,750,000
SEC Schedule III, Real Estate Accumulated Depreciation	682,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Apr. 18, 2013
Corinth, TX [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	1,075,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	13,935,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	1,075,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	13,935,000
SEC Schedule III, Real Estate, Gross	15,010,000
SEC Schedule III, Real Estate Accumulated Depreciation	829,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Apr. 18, 2013
Ennis, TX [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	986,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	9,025,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	986,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	9,025,000
SEC Schedule III, Real Estate, Gross	10,011,000
SEC Schedule III, Real Estate Accumulated Depreciation	1,015,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 31, 2011
Greenville, TX [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	1,800,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	13,948,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	1,800,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	13,948,000
SEC Schedule III, Real Estate, Gross	15,748,000
SEC Schedule III, Real Estate Accumulated Depreciation	1,409,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 31, 2011
Houston, TX [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	3,818,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	63,921,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	3,818,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	63,921,000
SEC Schedule III, Real Estate, Gross	67,739,000
SEC Schedule III, Real Estate Accumulated Depreciation	10,255,000
Real Estate And Accumulated Depreciation Date Acquired String	Various
Kyle, TX [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	1,096,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	12,279,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	1,096,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	12,279,000
SEC Schedule III, Real Estate, Gross	13,375,000
SEC Schedule III, Real Estate Accumulated Depreciation	1,114,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 11, 2012
Mesquite, TX [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	180,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	6,162,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	180,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	6,162,000
SEC Schedule III, Real Estate, Gross	6,342,000
SEC Schedule III, Real Estate Accumulated Depreciation	2,365,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Sep. 01, 1998
Paris, TX [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	60,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	12,040,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	60,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	12,040,000
SEC Schedule III, Real Estate, Gross	12,100,000
SEC Schedule III, Real Estate Accumulated Depreciation	2,017,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 30, 2009
San Antonio, TX [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	300,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	12,150,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	300,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	12,150,000
SEC Schedule III, Real Estate, Gross	12,450,000
SEC Schedule III, Real Estate Accumulated Depreciation	2,208,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 30, 2009
Bristol, VA [Member] | Skilled Nursing Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	176,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	2,511,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	176,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	2,511,000
SEC Schedule III, Real Estate, Gross	2,687,000
SEC Schedule III, Real Estate Accumulated Depreciation	1,973,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 17, 1991
Rainbow City, AL [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	670,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	11,330,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	670,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	11,330,000
SEC Schedule III, Real Estate, Gross	12,000,000
SEC Schedule III, Real Estate Accumulated Depreciation	410,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 31, 2013
Gilbert, AZ [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	451,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	3,142,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	79,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	451,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	3,221,000
SEC Schedule III, Real Estate, Gross	3,672,000
SEC Schedule III, Real Estate Accumulated Depreciation	1,274,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 31, 1998
Glendale, AZ [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	387,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	3,823,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	57,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	387,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	3,880,000
SEC Schedule III, Real Estate, Gross	4,267,000
SEC Schedule III, Real Estate Accumulated Depreciation	1,544,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 31, 1998
Tucson, AZ [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	919,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	6,656,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	190,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	919,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	6,846,000
SEC Schedule III, Real Estate, Gross	7,765,000
SEC Schedule III, Real Estate Accumulated Depreciation	2,697,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 31, 1998
Sacramento, CA [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	660,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	10,840,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	660,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	10,840,000
SEC Schedule III, Real Estate, Gross	11,500,000
SEC Schedule III, Real Estate Accumulated Depreciation	179,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 01, 2014
Bartow, FL [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	225,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	3,192,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	225,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	3,192,000
SEC Schedule III, Real Estate, Gross	3,417,000
SEC Schedule III, Real Estate Accumulated Depreciation	396,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Nov. 30, 2010
Lakeland, FL [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	250,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	3,167,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	250,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	3,167,000
SEC Schedule III, Real Estate, Gross	3,417,000
SEC Schedule III, Real Estate Accumulated Depreciation	395,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Nov. 30, 2010
Maitland, FL [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	1,687,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	5,428,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	1,687,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	5,428,000
SEC Schedule III, Real Estate, Gross	7,115,000
SEC Schedule III, Real Estate Accumulated Depreciation	2,808,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Aug. 06, 1996
Maitland, FL [Member] | Senior Living Campus [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	2,317,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	9,161,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	2,317,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	9,161,000
SEC Schedule III, Real Estate, Gross	11,478,000
SEC Schedule III, Real Estate Accumulated Depreciation	5,422,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Aug. 06, 1996
St. Cloud, FL [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	307,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	3,117,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	307,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	3,117,000
SEC Schedule III, Real Estate, Gross	3,424,000
SEC Schedule III, Real Estate Accumulated Depreciation	388,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Nov. 30, 2010
Greensboro, GA [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	572,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	4,849,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	12,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	572,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	4,861,000
SEC Schedule III, Real Estate, Gross	5,433,000
SEC Schedule III, Real Estate Accumulated Depreciation	446,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Sep. 15, 2011
Ames, IA [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	360,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	4,670,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	360,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	4,670,000
SEC Schedule III, Real Estate, Gross	5,030,000
SEC Schedule III, Real Estate Accumulated Depreciation	200,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 28, 2013
Burlington, IA [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	200,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	8,374,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	200,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	8,374,000
SEC Schedule III, Real Estate, Gross	8,574,000
SEC Schedule III, Real Estate Accumulated Depreciation	360,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 28, 2013
Cedar Falls, IA [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	4,072,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	260,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	4,700,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	260,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	4,700,000
SEC Schedule III, Real Estate, Gross	4,960,000
SEC Schedule III, Real Estate Accumulated Depreciation	206,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 28, 2013
Clinton, IA [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	2,818,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	133,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	3,215,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	133,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	3,215,000
SEC Schedule III, Real Estate, Gross	3,348,000
SEC Schedule III, Real Estate Accumulated Depreciation	391,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 30, 2010
Ft. Dodge, IA [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	100,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	7,208,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	100,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	7,208,000
SEC Schedule III, Real Estate, Gross	7,308,000
SEC Schedule III, Real Estate Accumulated Depreciation	302,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 28, 2013
Iowa City, IA [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	2,559,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	297,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	2,725,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	297,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	2,725,000
SEC Schedule III, Real Estate, Gross	3,022,000
SEC Schedule III, Real Estate Accumulated Depreciation	381,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 30, 2010
Marshalltown, IA [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	240,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	6,208,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	240,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	6,208,000
SEC Schedule III, Real Estate, Gross	6,448,000
SEC Schedule III, Real Estate Accumulated Depreciation	265,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 28, 2013
Muscatine, IA [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	140,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	1,802,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	140,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	1,802,000
SEC Schedule III, Real Estate, Gross	1,942,000
SEC Schedule III, Real Estate Accumulated Depreciation	87,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 28, 2013
Urbandale, IA [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	540,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	4,292,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	540,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	4,292,000
SEC Schedule III, Real Estate, Gross	4,832,000
SEC Schedule III, Real Estate Accumulated Depreciation	194,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 28, 2013
Caldwell, ID [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	320,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	10,080,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	320,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	10,080,000
SEC Schedule III, Real Estate, Gross	10,400,000
SEC Schedule III, Real Estate Accumulated Depreciation	210,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Mar. 31, 2014
Weiser, ID [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	20,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	2,433,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	20,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	2,433,000
SEC Schedule III, Real Estate, Gross	2,453,000
SEC Schedule III, Real Estate Accumulated Depreciation	128,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 21, 2012
Bourbonnais, IL [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	170,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	16,594,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	170,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	16,594,000
SEC Schedule III, Real Estate, Gross	16,764,000
SEC Schedule III, Real Estate Accumulated Depreciation	694,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 28, 2013
Moline, IL [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	250,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	5,630,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	250,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	5,630,000
SEC Schedule III, Real Estate, Gross	5,880,000
SEC Schedule III, Real Estate Accumulated Depreciation	244,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 28, 2013
Peoria, IL [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	4,260,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	403,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	4,532,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	96,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	403,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	4,628,000
SEC Schedule III, Real Estate, Gross	5,031,000
SEC Schedule III, Real Estate Accumulated Depreciation	625,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 19, 2009
Quincy, IL [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	360,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	12,403,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	360,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	12,403,000
SEC Schedule III, Real Estate, Gross	12,763,000
SEC Schedule III, Real Estate Accumulated Depreciation	517,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 28, 2013
Rockford, IL [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	390,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	12,576,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	390,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	12,576,000
SEC Schedule III, Real Estate, Gross	12,966,000
SEC Schedule III, Real Estate Accumulated Depreciation	541,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 28, 2013
Springfield, IL [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	450,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	19,355,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	450,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	19,355,000
SEC Schedule III, Real Estate, Gross	19,805,000
SEC Schedule III, Real Estate Accumulated Depreciation	808,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 28, 2013
Carmel, IN [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	475,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	7,336,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	475,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	7,336,000
SEC Schedule III, Real Estate, Gross	7,811,000
SEC Schedule III, Real Estate Accumulated Depreciation	0
Real Estate And Accumulated Depreciation Date Acquired String	11/12/2014
Crawfordsville, IN [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	300,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	3,134,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	300,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	3,134,000
SEC Schedule III, Real Estate, Gross	3,434,000
SEC Schedule III, Real Estate Accumulated Depreciation	138,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 28, 2013
Crown Point, IN [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	791,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	7,020,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	227,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	791,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	7,247,000
SEC Schedule III, Real Estate, Gross	8,038,000
SEC Schedule III, Real Estate Accumulated Depreciation	277,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 30, 2013
Greenwood, IN [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	463,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	6,810,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	245,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	463,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	7,055,000
SEC Schedule III, Real Estate, Gross	7,518,000
SEC Schedule III, Real Estate Accumulated Depreciation	270,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Nov. 07, 2013
Lafayette, IN [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	546,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	4,583,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	546,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	4,583,000
SEC Schedule III, Real Estate, Gross	5,129,000
SEC Schedule III, Real Estate Accumulated Depreciation	552,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 30, 2010
Wabash, IN [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	320,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	2,241,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	320,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	2,241,000
SEC Schedule III, Real Estate, Gross	2,561,000
SEC Schedule III, Real Estate Accumulated Depreciation	111,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 28, 2013
Overland Park, KS [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	2,199,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	20,026,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	2,199,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	20,026,000
SEC Schedule III, Real Estate, Gross	22,225,000
SEC Schedule III, Real Estate Accumulated Depreciation	1,585,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Sep. 30, 2012
Mission, KS [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	1,901,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	17,310,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	1,901,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	17,310,000
SEC Schedule III, Real Estate, Gross	19,211,000
SEC Schedule III, Real Estate Accumulated Depreciation	1,370,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Sep. 30, 2012
Bastrop, LA [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	325,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	2,456,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	325,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	2,456,000
SEC Schedule III, Real Estate, Gross	2,781,000
SEC Schedule III, Real Estate Accumulated Depreciation	290,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Apr. 30, 2011
Bossier City, LA [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	500,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	3,344,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	500,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	3,344,000
SEC Schedule III, Real Estate, Gross	3,844,000
SEC Schedule III, Real Estate Accumulated Depreciation	415,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Apr. 30, 2011
Minden, LA [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	280,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	1,698,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	280,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	1,698,000
SEC Schedule III, Real Estate, Gross	1,978,000
SEC Schedule III, Real Estate Accumulated Depreciation	199,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Apr. 30, 2011
West Monroe, LA [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	770,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	5,627,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	770,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	5,627,000
SEC Schedule III, Real Estate, Gross	6,397,000
SEC Schedule III, Real Estate Accumulated Depreciation	624,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Apr. 30, 2011
Baltimore, MD [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	860,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	8,078,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	353,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	860,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	8,431,000
SEC Schedule III, Real Estate, Gross	9,291,000
SEC Schedule III, Real Estate Accumulated Depreciation	257,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 31, 2013
Battle Creek, MI [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	3,112,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	398,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	3,093,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	398,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	3,093,000
SEC Schedule III, Real Estate, Gross	3,491,000
SEC Schedule III, Real Estate Accumulated Depreciation	443,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 19, 2009
Lansing, MI [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	6,749,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	340,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	7,908,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	340,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	7,908,000
SEC Schedule III, Real Estate, Gross	8,248,000
SEC Schedule III, Real Estate Accumulated Depreciation	1,118,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 19, 2009
Midland, MI [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	5,880,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	504,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	6,612,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	504,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	6,612,000
SEC Schedule III, Real Estate, Gross	7,116,000
SEC Schedule III, Real Estate Accumulated Depreciation	894,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 19, 2009
Saginaw, MI [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	3,871,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	248,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	4,212,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	248,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	4,212,000
SEC Schedule III, Real Estate, Gross	4,460,000
SEC Schedule III, Real Estate Accumulated Depreciation	590,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 19, 2009
Champlin, MN [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	980,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	4,430,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	980,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	4,430,000
SEC Schedule III, Real Estate, Gross	5,410,000
SEC Schedule III, Real Estate Accumulated Depreciation	642,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Mar. 10, 2010
Hugo, MN [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	400,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	3,800,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	400,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	3,800,000
SEC Schedule III, Real Estate, Gross	4,200,000
SEC Schedule III, Real Estate Accumulated Depreciation	535,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Mar. 10, 2010
Maplewood, MN [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	1,700,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	6,510,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	1,700,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	6,510,000
SEC Schedule III, Real Estate, Gross	8,210,000
SEC Schedule III, Real Estate Accumulated Depreciation	936,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Mar. 10, 2010
North Branch, MN [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	595,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	2,985,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	595,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	2,985,000
SEC Schedule III, Real Estate, Gross	3,580,000
SEC Schedule III, Real Estate Accumulated Depreciation	467,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Mar. 10, 2010
Grand Island, NE [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	4,528,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	370,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	5,029,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	90,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	370,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	5,119,000
SEC Schedule III, Real Estate, Gross	5,489,000
SEC Schedule III, Real Estate Accumulated Depreciation	214,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 28, 2013
Lincoln, NE [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	380,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	10,904,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	380,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	10,904,000
SEC Schedule III, Real Estate, Gross	11,284,000
SEC Schedule III, Real Estate Accumulated Depreciation	451,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 28, 2013
Omaha, NE [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	480,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	7,039,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	480,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	7,039,000
SEC Schedule III, Real Estate, Gross	7,519,000
SEC Schedule III, Real Estate Accumulated Depreciation	295,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 28, 2013
Marysville, OH [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	1,250,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	13,950,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	1,250,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	13,950,000
SEC Schedule III, Real Estate, Gross	15,200,000
SEC Schedule III, Real Estate Accumulated Depreciation	636,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jul. 01, 2013
Middletown, OH [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	9,503,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	940,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	15,548,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	940,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	15,548,000
SEC Schedule III, Real Estate, Gross	16,488,000
SEC Schedule III, Real Estate Accumulated Depreciation	75,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 31, 2014
Milwaukie, OR [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	370,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	5,283,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	370,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	5,283,000
SEC Schedule III, Real Estate, Gross	5,653,000
SEC Schedule III, Real Estate Accumulated Depreciation	35,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Sep. 30, 2014
Ontario, OR [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	428,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	6,128,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	428,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	6,128,000
SEC Schedule III, Real Estate, Gross	6,556,000
SEC Schedule III, Real Estate Accumulated Depreciation	323,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 21, 2012
Conway, SC [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	344,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	2,877,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	94,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	344,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	2,971,000
SEC Schedule III, Real Estate, Gross	3,315,000
SEC Schedule III, Real Estate Accumulated Depreciation	1,174,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 31, 1998
Gallatin, TN [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	326,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	2,277,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	61,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	326,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	2,338,000
SEC Schedule III, Real Estate, Gross	2,664,000
SEC Schedule III, Real Estate Accumulated Depreciation	925,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Mar. 31, 1999
Kingsport, TN [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	354,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	2,568,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	66,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	354,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	2,634,000
SEC Schedule III, Real Estate, Gross	2,988,000
SEC Schedule III, Real Estate Accumulated Depreciation	1,042,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 31, 1998
Tullahoma, TN [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	191,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	2,216,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	57,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	191,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	2,273,000
SEC Schedule III, Real Estate, Gross	2,464,000
SEC Schedule III, Real Estate Accumulated Depreciation	883,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Mar. 31, 1999
Beaver Dam, WI [Member] | Assisted Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	210,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	20,149,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	210,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	20,149,000
SEC Schedule III, Real Estate, Gross	20,359,000
SEC Schedule III, Real Estate Accumulated Depreciation	1,162,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 21, 2012
Rogers, AR [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	1,470,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	25,283,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	1,470,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	25,283,000
SEC Schedule III, Real Estate, Gross	26,753,000
SEC Schedule III, Real Estate Accumulated Depreciation	694,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 23, 2013
Fort Smith, AR [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	590,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	22,447,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	590,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	22,447,000
SEC Schedule III, Real Estate, Gross	23,037,000
SEC Schedule III, Real Estate Accumulated Depreciation	611,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 23, 2013
Pinole, CA [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	1,020,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	18,066,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	1,020,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	18,066,000
SEC Schedule III, Real Estate, Gross	19,086,000
SEC Schedule III, Real Estate Accumulated Depreciation	492,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 23, 2013
West Covina, CA [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	940,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	20,280,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	940,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	20,280,000
SEC Schedule III, Real Estate, Gross	21,220,000
SEC Schedule III, Real Estate Accumulated Depreciation	545,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 23, 2013
Hemet, CA [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	1,250,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	12,645,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	1,250,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	12,645,000
SEC Schedule III, Real Estate, Gross	13,895,000
SEC Schedule III, Real Estate Accumulated Depreciation	359,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 23, 2013
Fresno, CA [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	420,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	10,899,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	420,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	10,899,000
SEC Schedule III, Real Estate, Gross	11,319,000
SEC Schedule III, Real Estate Accumulated Depreciation	315,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 23, 2013
Merced, CA [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	350,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	18,712,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	350,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	18,712,000
SEC Schedule III, Real Estate, Gross	19,062,000
SEC Schedule III, Real Estate Accumulated Depreciation	511,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 23, 2013
Roseville, CA [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	630,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	31,343,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	630,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	31,343,000
SEC Schedule III, Real Estate, Gross	31,973,000
SEC Schedule III, Real Estate Accumulated Depreciation	842,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 23, 2013
Modesto, CA [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	1,170,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	22,673,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	1,170,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	22,673,000
SEC Schedule III, Real Estate, Gross	23,843,000
SEC Schedule III, Real Estate Accumulated Depreciation	607,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 23, 2013
Athens, GA [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	910,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	31,940,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	910,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	31,940,000
SEC Schedule III, Real Estate, Gross	32,850,000
SEC Schedule III, Real Estate Accumulated Depreciation	861,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 23, 2013
Columbus, GA [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	570,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	8,639,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	570,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	8,639,000
SEC Schedule III, Real Estate, Gross	9,209,000
SEC Schedule III, Real Estate Accumulated Depreciation	254,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 23, 2013
Savannah, GA [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	1,200,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	15,851,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	1,200,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	15,851,000
SEC Schedule III, Real Estate, Gross	17,051,000
SEC Schedule III, Real Estate Accumulated Depreciation	441,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 23, 2013
Boise, ID [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	400,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	12,422,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	400,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	12,422,000
SEC Schedule III, Real Estate, Gross	12,822,000
SEC Schedule III, Real Estate Accumulated Depreciation	346,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 23, 2013
Fort Wayne, IN [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	310,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	12,864,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	310,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	12,864,000
SEC Schedule III, Real Estate, Gross	13,174,000
SEC Schedule III, Real Estate Accumulated Depreciation	370,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 23, 2013
Kenner, LA [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	310,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	24,259,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	310,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	24,259,000
SEC Schedule III, Real Estate, Gross	24,569,000
SEC Schedule III, Real Estate Accumulated Depreciation	656,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 23, 2013
Bellevue, WA [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	780,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	18,692,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	780,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	18,692,000
SEC Schedule III, Real Estate, Gross	19,472,000
SEC Schedule III, Real Estate Accumulated Depreciation	504,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 23, 2013
Vancouver, WA [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	1,740,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	23,411,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	1,740,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	23,411,000
SEC Schedule III, Real Estate, Gross	25,151,000
SEC Schedule III, Real Estate Accumulated Depreciation	653,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 23, 2013
Yakima, WA [Member] | Independent Living Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	440,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	14,185,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	440,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	14,185,000
SEC Schedule III, Real Estate, Gross	14,625,000
SEC Schedule III, Real Estate Accumulated Depreciation	388,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 23, 2013
Loma Linda, CA [Member] | Senior Living Campus [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	1,200,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	10,800,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	4,232,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	1,200,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	15,032,000
SEC Schedule III, Real Estate, Gross	16,232,000
SEC Schedule III, Real Estate Accumulated Depreciation	687,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Sep. 28, 2012
Nampa, ID [Member] | Senior Living Campus [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	243,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	4,182,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	243,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	4,182,000
SEC Schedule III, Real Estate, Gross	4,425,000
SEC Schedule III, Real Estate Accumulated Depreciation	2,042,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Aug. 13, 1996
Mt. Airy, NC [Member] | Senior Living Campus [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	1,370,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	7,470,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	1,370,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	7,470,000
SEC Schedule III, Real Estate, Gross	8,840,000
SEC Schedule III, Real Estate Accumulated Depreciation	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 17, 2014
West Palm Beach, FL [Member] | Senior Living Campus [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	2,771,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	4,286,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	2,771,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	4,286,000
SEC Schedule III, Real Estate, Gross	7,057,000
SEC Schedule III, Real Estate Accumulated Depreciation	3,633,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Aug. 06, 1996
Silverdale, WA [Member] | Senior Living Campus [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	1,750,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	23,860,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	2,166,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	1,750,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	26,026,000
SEC Schedule III, Real Estate, Gross	27,776,000
SEC Schedule III, Real Estate Accumulated Depreciation	1,658,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Aug. 16, 2012
Fernandina Beach, FL [Member] | Entrance-Fee Communities [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	1,430,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	63,420,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	1,430,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	63,420,000
SEC Schedule III, Real Estate, Gross	64,850,000
SEC Schedule III, Real Estate Accumulated Depreciation	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 17, 2014
St. Simons Island, GA [Member] | Entrance-Fee Communities [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	8,770,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	38,070,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	8,770,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	38,070,000
SEC Schedule III, Real Estate, Gross	46,840,000
SEC Schedule III, Real Estate Accumulated Depreciation	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 17, 2014
Winston-Salem, NC [Member] | Entrance-Fee Communities [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	8,700,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	73,920,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	8,700,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	73,920,000
SEC Schedule III, Real Estate, Gross	82,620,000
SEC Schedule III, Real Estate Accumulated Depreciation	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 17, 2014
Pawleys Island, SC [Member] | Entrance-Fee Communities [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	1,480,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	38,620,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	1,480,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	38,620,000
SEC Schedule III, Real Estate, Gross	40,100,000
SEC Schedule III, Real Estate Accumulated Depreciation	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 17, 2014
Spartanburg, SC [Member] | Entrance-Fee Communities [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	900,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	49,190,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	900,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	49,190,000
SEC Schedule III, Real Estate, Gross	50,090,000
SEC Schedule III, Real Estate Accumulated Depreciation	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Dec. 17, 2014
Crestview, FL [Member] | Medical Office Building [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	165,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	3,349,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	165,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	3,349,000
SEC Schedule III, Real Estate, Gross	3,514,000
SEC Schedule III, Real Estate Accumulated Depreciation	2,193,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 30, 1993
Pasadena, TX [Member] | Medical Office Building [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	631,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	6,341,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	631,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	6,341,000
SEC Schedule III, Real Estate, Gross	6,972,000
SEC Schedule III, Real Estate Accumulated Depreciation	4,312,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jan. 01, 1995
La Mesa, CA [Member] | Hospital [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	4,180,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	8,320,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	4,180,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	8,320,000
SEC Schedule III, Real Estate, Gross	12,500,000
SEC Schedule III, Real Estate Accumulated Depreciation	1,482,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Mar. 10, 2010
Jackson, KY [Member] | Hospital [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	540,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	10,163,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	7,583,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	540,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	17,746,000
SEC Schedule III, Real Estate, Gross	18,286,000
SEC Schedule III, Real Estate Accumulated Depreciation	6,079,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Jun. 12, 1992
Murfreesboro, TN [Member] | Hospital [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Amount of Encumbrances	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Land	2,444,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	17,585,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Costs Capitalized Subsequent to Acquisition, Improvements	0
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Land	2,444,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Carrying Amount of Buildings and Improvements	17,585,000
SEC Schedule III, Real Estate, Gross	20,029,000
SEC Schedule III, Real Estate Accumulated Depreciation	988,000
SEC Schedule III, Real Estate and Accumulated Depreciation, Date Acquired	Oct. 01, 2012
Subsequent Property Additions Purchased From NHC [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate and Accumulated Depreciation, Initial Cost of Buildings and Improvements	$ 33,909,000

XML

Schedule III - Real Estate and Accumulated Depreciation Schedule III - Real Estate and Accumulated Depreciation (Summary) (Details) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
SEC Schedule III, Real Estate, Gross, January 1	$ 1,422,002,000	$ 698,536,000	$ 541,493,000
Payments to Acquire Property, Plant, and Equipment	533,171,000	654,670,000	110,601,000
Change In Accounts Payable, Real Property Additions	(995,000)	3,086,000	0
Additions Through Contingent Liabilities	3,000,000	1,600,000	0
Additions Through Assumption Of Debt	7,858,000	80,528,000	19,250,000
Payments for Delayed Tax Exempt Exchange	23,813,000	0	0
Property Additions Through Conveyance Of Noncontrolling Interest	0	0	10,964,000
Additions Through Settlement Of Mortgage Note	0	13,741,000	0
SEC Schedule III, Real Estate, Cost of Real Estate Sold	0	(30,159,000)	(17,259,000)
SEC Schedule III, Real Estate, Other Additions	0	0	39,323,000
SEC Schedule III, Real Estate, Other Deductions	0	0	(5,836,000)
SEC Schedule III, Real Estate, Gross, December 31	1,988,849,000	1,422,002,000	698,536,000
SEC Schedule III, Real Estate Accumulated Depreciation, January 1	174,262,000	163,146,000	146,698,000
SEC Schedule III, Real Estate Accumulated Depreciation, Depreciation Expense	38,038,000	20,658,000	16,981,000
SEC Schedule III, Real Estate Accumulated Depreciation, Real Estate Sold	0	(9,542,000)	(6,250,000)
SEC Schedule III, Real Estate Accumulated Depreciation, Other Additions	0	0	9,942,000
SEC Schedule III, Real Estate Accumulated Depreciation, Other Deductions	0	0	(4,225,000)
SEC Schedule III, Real Estate Accumulated Depreciation, December 31	$ 212,300,000	$ 174,262,000	$ 163,146,000

XML

Limits On Common Stock Ownership Limits On Common Stock Ownership (Narrative) (Details)	12 Months Ended
	Dec. 31, 2014
Limits On Common Stock Ownership [Abstract]
Common Stock Ownership Limit	9.90%
Excepted Holder Agreement, Common Stock, Ownership Limit	7.50%
Stock Repurchase Program, Number of Shares Authorized to be Repurchased	1,000,000

XML

Subsequent Events Subsequent Events

12 Months Ended

Dec. 31, 2014

Subsequent Events [Abstract]

Subsequent Events [Text Block]

SUBSEQUENT EVENTS

Loan Investment

On February 10, 2015, we finalized our agreement to lend Life Care Services, through its LCS-Westminster Partnership III LLP (“LCS-WP”) up to $154,500,000. The agreement conveys a mortgage interest and will facilitate the construction of Phase II of Timber Ridge at Talus (“Timber Ridge”), a Type-A Continuing Care Retirement Community in the Seattle area.

The loans take the form of two notes under a master credit agreement. The senior loan (“Note A”) will total $60,000,000 at a 6.75% interest rate with 10 basis-point escalators after year three, and has a term of 10 years. We funded $33,100,000 of Note A at closing. Note A is interest-only and is locked to prepayment for three years. After year three, the prepayment penalty starts at 5% and declines 1% per year. The loan will be freely prepayable during the last 6 months of its term. The second note ("Note B") is a construction loan for up to $94,500,000 at an interest rate of 8% and a 5 year maturity. We anticipate funding Note B over twenty months and will be repaid with entrance fees once Phase II opens.

NHI has a purchase option on the property for the greater of fair market value or $115,000,000. A purchase option window of fifteen months will contingently open in year five or upon earlier stabilization, as defined. The purchase option constitutes a variable interest in Phase II of the Timber Ridge project, creating an interest in specified assets of LCS-WP but not in LCS-WP as a whole. Since LCS-WP is not a VIE, the specified Timber Ridge assets are not subject to the consolidation guidance governing Variable Interest Entities.

Refinancing

On January 15, 2015 we issued $125,000,000 of 8-year notes with a coupon of 3.99% and $100,000,000 of 12-year notes with a coupon of 4.51% to a leading provider of private placement fixed rate debt. The notes are unsecured and require quarterly payments of interest only until maturity. We used the proceeds from the notes to pay down borrowings on our revolving credit facility.

XML

Investment In Preferred Stock, At Cost (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Investment income and other	$ 4,217,000	$ 4,166,000	$ 4,409,000
Investment in cumulative preferred stock of LTC properties	2,000,000
Original cost of cost method investments	38,132,000
Nonvoting Convertible Preferred Stock	2,000,000
Closing Price Of LTC's Common Stock	$ 43.17
Preferred Stock, Dividend Rate, Percentage	8.50%
Preferred Stock, Liquidation Preference Per Share	$ 19.25
Preferred Dividends [Member]
Investment income and other	$ 3,273,000	$ 3,272,500	$ 3,272,500

XML

Real Estate (New Real Estate Investments) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014
Real Estate Investments During The Period	$ 555,453,000
Prestige Senior Living [Member]
Number Of Real Estate Properties Acquired	4
Senior Housing Community [Member] | Senior Living Communities [Member]
Number Of Real Estate Properties Acquired	8
Real Estate Investments During The Period	476,000,000
Senior Housing Community [Member] | Chancellor Healthcare [Member]
Number Of Real Estate Properties Acquired	2
Real Estate Investments During The Period	17,150,000
Skilled Nursing Facility [Member] | Prestige Senior Living [Member]
Number Of Real Estate Properties Acquired	3
Real Estate Investments During The Period	45,115,000
Skilled Nursing Facility [Member] | Senior Living Management [Member]
Number Of Real Estate Properties Acquired	1
Real Estate Investments During The Period	$ 700,000

XML

Schedule II - Valuation and Qualifying Accounts Schedule II - Valuation and Qualifying Accounts (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Schedule II - Valuation and Qualifying Accounts [Abstract]
Valuation Allowances and Reserves, Balance, January 1	$ 0	$ 0	$ 0
Valuation Allowances and Reserves, Charged to Cost and Expense	0	0	0
Valuation Allowances and Reserves, Deductions	0	0	0
Valuation Allowances and Reserves, Balance, December 31	0	0	0
Loan and realty losses (recoveries), net	0	1,976,000	(2,195,000)
Mortgage Loans On Real Estate, Impairment	0	4,037,000	2,300,000
Allowance for Loan and Lease Loss, Recovery of Bad Debts		$ 2,061,000	$ 4,495,000

XML

Earnings and Dividends Per Share (Tables)

12 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table summarizes the average number of common shares and the net income used in the calculation of basic and diluted earnings per common share (in thousands, except share and per share amounts):

	Year Ended December 31,
	2014		2013		2012
Income from continuing operations attributable to common stockholders	$	101,609	$	78,499	$	72,667
Discontinued operations	—		27,684		18,064
Net income attributable to common stockholders	$	101,609	$	106,183	$	90,731
BASIC:
Weighted average common shares outstanding	33,375,966		28,362,398		27,811,813
Income from continuing operations per common share	$	3.04	$	2.77	$	2.61
Discontinued operations per common share	—		.97		.65
Net income per common share	$	3.04	$	3.74	$	3.26
DILUTED:
Weighted average common shares outstanding	33,375,966		28,362,398		27,811,813
Stock options and restricted shares	40,048		35,304		26,907
Average dilutive common shares outstanding	33,416,014		28,397,702		27,838,720
Income from continuing operations per common share	$	3.04	$	2.77	$	2.61
Discontinued operations per common share	—		.97		.65
Net income per common share	$	3.04	$	3.74	$	3.26
Incremental shares excluded since anti-dilutive:
Stock options with an exercise price in excess of the average market price for our common shares	13,831		23,883		—
Regular dividends declared per common share	$	3.08	$	2.90	$	2.64
Special dividends declared per common share1	$	—	$	—	$	.22
1Special dividends are paid in January following the year in which they are declared

XML

Investments In Marketable Securities (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Marketable Securities [Abstract]
Available-for-sale Securities, Accumulated Gross Unrealized Gain (Loss), before Tax	$ 11,415	$ 8,562
Dividend Income On Marketable Securities	$ 716	$ 667	$ 628

XML

Income Taxes Income Taxes (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Income Taxes [Line Items]
Income Tax Expense (Benefit)	$ 133,000	$ 267,000	$ 137,000
Deferred Income Tax Expense (Benefit)	0	0	0
Income Taxes Paid	139,000	129,000	96,000
Taxable REIT Subsidiary [Member]
Income Taxes [Line Items]
Income Tax Expense (Benefit)		128,000
Other than Taxable REIT Subsidiary [Member]
Income Taxes [Line Items]
Income Tax Expense (Benefit)		$ 139,000

XML

Share-Based Compensation (Schedule of Non-Vested Share Activity) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-vested stock options, January 1	193,344
Non-vested stock options, December 31	226,681	193,344
Weighted Average Grant Date Fair Value, Non-vested stock options, January 1	$ 6.95
Weighted Average Fair Value Per Share, Options granted	$ 4.93	$ 6.41	$ 6.36
Weighted Average Grant Date Fair Value, Non-vested stock options, December 31	$ 5.64	$ 6.95
2012 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted	400,000
Options vested	(306,657)
Weighted Average Fair Value Per Share, Options granted	$ 4.93
Weighted Average Grant Date Fair Value, Options vested	5.34
2005 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted		360,000	340,000
Options vested	(60,006)
Weighted Average Grant Date Fair Value, Options vested	7.23

XML

Equity-Method Investment And Other Assets (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Equity Method Investments And Other Assets [Abstract]
Equity Method Investments	$ 9,424	$ 9,494
Loan costs and prepaid expenses	11,491	7,366
Accounts receivable and others assets	3,818	2,502
Replacement reserve and tax escrows - Fannie Mae	4,324	706
Lease escrow deposits	21,648	22,775
Escrow deposit for tax deferred exchange	0	23,813
Equity-method investment and other assets	$ 50,705	$ 66,656

XML

Significant Accounting Policies

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Significant Accounting Policies

SIGNIFICANT ACCOUNTING POLICIES

The Company - National Health Investors, Inc. ("NHI" or the "Company"), a Maryland corporation incorporated and publicly listed in 1991, is a real estate investment trust (“REIT”) specializing in sale-leaseback, joint-venture, mortgage and mezzanine financing of need-driven and discretionary senior housing and medical investments. Our portfolio consists of real estate investments in independent, assisted and memory care communities, entrance-fee communities, senior living campuses, skilled nursing facilities, specialty hospitals and medical office buildings. Other investments include mortgages and notes, the preferred stock and marketable securities of other REITs, and a joint venture structured to comply with the provisions of the REIT Investment Diversification Empowerment Act of 2007 (“RIDEA”). Through this RIDEA joint venture, we invest in facility operations, managed by independent third-parties. We fund our real estate investments primarily through: (1) cash flow, (2) debt offerings, including bank lines of credit and ordinary term debt, and (3) the sale of equity securities.

Principles of Consolidation - The accompanying consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries and the joint venture entity over which we exercise control. All inter-company transactions and balances have been eliminated in consolidation. Net income is reduced by the portion of net income attributable to noncontrolling interests.

We apply Financial Accounting Standards Board ("FASB") guidance for our arrangements with variable interest entities ("VIEs") which requires us to identify entities for which control is achieved through means other than voting rights and to determine which business enterprise is the primary beneficiary of the VIE. A VIE is broadly defined as an entity with one or more of the following characteristics: (a) the total equity investment at risk is insufficient to finance the entity's activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about the entity's activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity's activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. We consolidate investments in VIEs when we are determined to be the primary beneficiary of the VIE. We may change our assessment of a VIE due to events such as modifications of contractual arrangements that affect the characteristics or adequacy of the entity's equity investments at risk and the disposal of all or a portion of an interest held by the primary beneficiary.

We identify the primary beneficiary of a VIE as the enterprise that has both: (i) the power to direct the activities of the VIE that most significantly impact the entity's economic performance; and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could be significant to the entity. We perform this analysis on an ongoing basis. At December 31, 2014, we held interests in two unconsolidated VIEs, for neither of which were we the primary beneficiary.

We also apply FASB guidance related to investments in joint ventures based on the type of controlling rights held by the members' interests in limited liability companies that may preclude consolidation by the majority equity owner in certain circumstances in which the majority equity owner would otherwise consolidate the joint venture.

We structure our joint ventures to be compliant with the provisions of the REIT Investment Diversification and Empowerment Act of 2007 ("RIDEA") which permits NHI to receive rent payments through a triple-net lease between a property company and an operating company, and is designed to give NHI the opportunity to capture additional value on the improving performance of the operating company through distributions to a taxable REIT subsidiary ("TRS"). Accordingly, the TRS holds our equity interest in an unconsolidated operating company, which we do not control, and provides an organizational structure that will allow the TRS to engage in a broad range of activities and share in revenues that would otherwise be non-qualifying income under the REIT gross income tests.

Equity-Method Investment - We report our TRS' investment in an unconsolidated entity, over whose operating and financial policies we have the ability to exercise significant influence but not control, under the equity method of accounting. Under this method of accounting, our pro rata share of the entity's earnings or losses is included in our Consolidated Statements of Income. Additionally, we adjust our investment carrying amount to reflect our share of changes in an equity-method investee's capital resulting from its capital transactions.

The initial carrying value of our equity-method investment is based on the fair value of the net assets of the entity at the time we acquired our interest. We estimate fair values of the net assets of our equity-method investee based on discounted cash flow models. The inputs we use in these models are based on assumptions that are within a reasonable range of current market rates for the respective investments.

We evaluate our equity-method investment for impairment whenever events or changes in circumstances indicate that the carrying value of our investment may exceed the fair value. If it is determined that a decline in the fair value of our investment is not temporary, and if such reduced fair value is below its carrying value, an impairment is recorded. Determining the fair value of our equity-method investments involves significant judgment. Our estimates consider all available evidence including the present value of the expected future cash flows discounted at market rates, general economic conditions and other relevant factors.

Noncontrolling Interest - We present the portion of any equity that we do not own in entities that we control (and thus consolidate) as noncontrolling interest and classify such interest as a component of consolidated equity, separate from total NHI stockholders' equity, in our Consolidated Balance Sheets. In addition, we include net income attributable to the noncontrolling interest in net income in our Consolidated Statements of Income.

Use of Estimates - The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Earnings Per Share - The weighted average number of common shares outstanding during the reporting period is used to calculate basic earnings per common share. Diluted earnings per common share assume the exercise of stock options using the treasury stock method, to the extent dilutive. Diluted earnings per share also incorporate the potential dilutive impact of our 3.25% convertible senior notes due 2021. We apply the if-converted method to our convertible debt instruments, the effect of which is that conversion will not be assumed for purposes of computing diluted earnings (loss) per share if the effect would be anti-dilutive.

Fair Value Measurements - Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy is required to prioritize the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs.

The three levels of inputs used to measure fair value are as follows:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

If the fair value measurement is based on inputs from different levels of the hierarchy, the level within which the entire fair value measurement falls is the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. When an event or circumstance alters our assessment of the observability and thus the appropriate classification of an input to a fair value measurement which we deem to be significant to the fair value measurement as a whole, we will transfer that fair value measurement to the appropriate level within the fair value hierarchy.

Real Estate Properties - Real estate properties are recorded at cost or, if acquired through business combination, at fair value. Cost or fair value at the time of acquisition is allocated among land, buildings, tenant improvements, lease and other intangibles, and personal property. For properties acquired in transactions accounted for as asset purchases, the purchase price allocation is based on the relative fair values of the assets acquired. Cost includes capitalized interest during construction periods. We use the straight-line method of depreciation for buildings over their estimated useful lives of 40 years, and improvements over their estimated useful lives ranging from 3 to 25 years.

We evaluate the recoverability of the carrying value of our real estate properties on a property-by-property basis. On a quarterly basis, we review our properties for recoverability when events or circumstances, including significant physical changes in the property, significant adverse changes in general economic conditions and significant deteriorations of the underlying cash flows of the property, indicate that the carrying amount of the property may not be recoverable. The need to recognize an impairment charge is based on estimated undiscounted future cash flows from a property compared to the carrying value of that property. If recognition of an impairment charge is necessary, it is measured as the amount by which the carrying amount of the property exceeds the fair value of the property.

We have reclassified for all periods presented the operations of facilities meeting the accounting criteria as either being sold or held for sale as discontinued operations in the Consolidated Statements of Income. Long-lived assets classified as held for sale are reported separately in the Consolidated Balance Sheets. When assets previously classified as being held for sale no longer meet the accounting criteria for such classification, we reclassify those assets as held and used, measured at the lower of their carrying amount before the assets were classified as held for sale (adjusted in the period in which the decision not to sell was made for any depreciation expense that would have been recognized had the assets been continuously classified as held and used) or their fair value at the date of the subsequent decision not to sell. Results of operations of the facilities previously disclosed in our Consolidated Statements of Income as discontinued operations which no longer meet the accounting criteria as held for sale are reclassified into continuing operations for all periods presented. There is no change to reported net income for the prior periods as a result of this reclassification.

Mortgage and Other Notes Receivable - Each quarter, we evaluate the carrying values of our notes receivable on an instrument-by-instrument basis for recoverability when events or circumstances, including the non-receipt of contractual principal and interest payments, significant deteriorations of the financial condition of the borrower and significant adverse changes in general economic conditions, indicate that the carrying amount of the note receivable may not be recoverable. If a note receivable becomes more than 30 days delinquent as to contractual principal or interest payments, the loan is classified as non-performing, and thereafter we recognize all amounts due when received. If necessary, an impairment is measured as the amount by which the carrying amount exceeds the discounted cash flows expected to be received under the note receivable or, if foreclosure is probable, the fair value of the collateral securing the note receivable.

Cash Equivalents - Cash equivalents consist of all highly liquid investments with an original maturity of three months or less.

Concentration of Credit Risks - Our credit risks primarily relate to cash and cash equivalents, investments in preferred stock and investments in mortgage and other notes receivable. Cash and cash equivalents are primarily held in bank accounts and overnight investments. We maintain our bank deposit accounts with large financial institutions in amounts that often exceed federally-insured limits. We have not experienced any losses in such accounts. Our mortgages and other notes receivable consist primarily of secured loans on facilities. Our investment in preferred stock is in another healthcare REIT.

Our financial instruments, principally our investments in preferred stock, marketable securities, and notes receivable, are subject to the possibility of loss of the carrying values as a result of either the failure of other parties to perform according to their contractual obligations or changes in market prices which may make the instruments less valuable. We obtain collateral in the form of mortgage liens and other protective rights and continually monitor these rights in order to reduce such possibilities of loss. We evaluate the need to provide for reserves for potential losses on our financial instruments based on management's periodic review of our portfolio on an instrument-by-instrument basis.

Marketable Securities - Our investments in marketable securities are classified as available-for-sale securities. Unrealized gains and losses on available-for-sale securities are recorded in stockholders' equity. We evaluate our marketable securities for other-than-temporary impairments on at least a quarterly basis. Realized gains and losses from the sale of available-for-sale securities are determined on a specific-identification basis.

A decline in the market value of any available-for-sale or held-to-maturity security below cost that is deemed to be other-than-temporary results in an impairment to reduce the carrying amount to fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other-than-temporary, we consider whether we have the ability and intent to hold the investment until a market price recovery and consider whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and duration of the impairment, changes in value subsequent to year-end and forecasted performance of the investment.

Deferred Costs - Costs incurred to acquire debt are amortized by the effective interest method over the term of the related debt.

Deferred Income - Deferred income primarily includes non-refundable loan and lease commitment fees received by us, which are amortized into income over the expected period of the related loan or lease. In the event that our financing commitment to a potential borrower or lessee expires, the related commitment fees are recognized into income immediately. Commitment fees may be charged based on the terms of the loan or lease agreements and the creditworthiness of the parties.

Rental Income - Base rental income is recognized using the straight-line method over the term of the lease. Under certain leases, we receive additional contingent rent, which is calculated on the increase in revenues of the lessee over a base year or base quarter. We recognize contingent rent annually or quarterly when, based on the actual revenues of the lessee, receipt of such income is probable since the target threshold has been achieved. Revenue from minimum lease payments under our leases is recognized on a straight-line basis to the extent that future lease payments are considered collectible. Lease payments that depend on a factor directly related to future use of the property, such as an increase in annual revenues over a base year, are considered to be contingent rentals and are excluded from minimum lease payments.

If rental income calculated on a straight-line basis exceeds the cash rent due under a lease, the difference is recorded as an increase to straight-line rent receivable in the Consolidated Balance Sheets and an increase in rental income in the Consolidated Statements of Income. If rental income on a straight-line basis is calculated to be less than cash received, there is a decrease in the same accounts.

We identify a lease as non-performing if a required payment is not received within 30 days of the date it is due. Our policy related to rental income on non-performing leased real estate properties is to recognize rental income in the period when the related cash is received. As of December 31, 2014, we had not identified any of our leases as non-performing.

Mortgage Interest Income - Mortgage interest income is recognized based on the interest rates and principal amounts outstanding on the mortgage notes receivable. Under certain mortgages, we receive additional contingent interest, which is calculated on the increase in the current year revenues of a borrower over a base year. We identify a mortgage loan as non-performing if a required payment is not received within 30 days of the date it is due. Our policy related to mortgage interest income on non-performing mortgage loans is to recognize mortgage interest income in the period when the cash is received. As of December 31, 2014, we had not identified any of our mortgages as non-performing.

Investment Income and Other - Investment income and other includes dividends when declared and interest when earned from investments in preferred stock and marketable securities of other healthcare REITs, interest on cash and cash equivalents when earned, and amortization of deferred income. Realized gains and losses on sales of marketable securities using the specific-identification method are included as a separate component of continuing operations in the Consolidated Statements of Income as investment and other gains.

Derivatives - In the normal course of business, we are subject to risk from adverse fluctuations in interest rates. We have periodically chosen to manage this risk through the use of derivative financial instruments, primarily interest rate swaps. Counterparties to these contracts are major financial institutions. We are exposed to credit loss in the event of nonperformance by these counterparties. We do not use derivative instruments for trading or speculative purposes. Our objective in managing exposure to market risk is to limit the impact on cash flows.

To qualify for hedge accounting, our interest rate swaps must effectively reduce the risk exposure that they are designed to hedge. In addition, at inception of a qualifying cash flow hedging relationship, the underlying transaction or transactions must be, and are expected to remain, probable of occurring in accordance with our related assertions. All of our hedges are cash flow hedges.

We recognize all derivative instruments, including embedded derivatives required to be bifurcated, as assets or liabilities at their fair value in the Consolidated Balance Sheets. Changes in the fair value of derivative instruments that are not designated as hedges or that do not meet the criteria of hedge accounting are recognized in earnings. For derivatives designated in qualifying cash flow hedging relationships, the change in fair value of the effective portion of the derivatives is recognized in accumulated other comprehensive income (loss), whereas the change in fair value of the ineffective portion is recognized in earnings. Gains and losses are reclassified from accumulated other comprehensive income into earnings once the underlying hedged transaction is recognized in earnings.

Federal Income Taxes - We intend at all times to qualify as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. Effective October 1, 2012, we began recording income tax expense or benefit with respect to one of our subsidiaries which is taxed as a Taxable REIT Subsidiary ("TRS") under provisions similar to those applicable to regular corporations. Aside from such income taxes which may be applicable to the taxable income in the TRS, we will not be subject to U.S. federal income tax, provided that we continue to qualify as a REIT and make distributions to stockholders equal to or in excess of our taxable income. Accordingly, no provision for federal income taxes has been made in the consolidated financial statements, except for the provision on the taxable income of the TRS which is included in franchise, excise and other taxes in the Consolidated Statements of Income. Our failure to continue to qualify under the applicable REIT qualification rules and regulations would have a material adverse impact on our financial position, results of operations and cash flows.

Earnings and profits, which determine the taxability of dividends to stockholders, differ from net income reported for financial reporting purposes due primarily to differences in the basis of assets, estimated useful lives used to compute depreciation expense, gains on sales of real estate, non-cash compensation expense and recognition of commitment fees.

Our tax returns filed for years beginning in 2011 are subject to examination by taxing authorities. We classify interest and penalties related to uncertain tax positions, if any, in our consolidated financial statements as a component of income tax expense.

Segment Disclosures - We are in the business of owning and financing health care properties. We are managed as one segment, rather than multiple segments for internal purposes and for internal decision making.

Reclassifications - The results of operations for facilities sold, including the gain or loss on such sales, have been reported for periods prior to the adoption of ASU 2014-08 as discontinued operations in the Consolidated Statements of Income. The reclassifications to retrospectively reflect the disposition of these facilities had no impact on previously reported net income.

New Accounting Pronouncements - In the first quarter of 2014, we adopted ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Under ASU 2014-08, disposals will be reported as discontinued operations only when the disposal represents a strategic shift that will have a major effect on our operations and financial results. Previously, we reported the disposition of components that were either reporting units, subsidiaries, or asset groups as discontinued operations. ASU 2014-08 is effective for all disposals (or classifications as held for sale) of components that occur on or after December 15, 2014. We have elected early adoption, under which terms we will prospectively apply ASU 2014-08 and report as discontinued operations only those disposals (or classifications as held for sale) that have not been previously reported.

In May 2014 the FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 provides a principles-based approach for a broad range of revenue generating transactions, including the sale of real estate, which will generally require more estimates and more judgment and more disclosures than under current guidance. Because this ASU specifically excludes lease contracts from its scope, its application is not expected to impact our recognition of rental income on a straight-line basis. ASU 2014-09 is effective for public entities for annual periods beginning after December 15, 2016, including interim periods therein. Early adoption is prohibited. We have yet to determine the method by which ASU 2014-09 will be adopted in 2017 and we are continuing to study the effect that our eventual adoption of this standard will have on our reported financial position and results of operation, the extent of which cannot be reasonably estimable at this time.

XML

Share-Based Compensation (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Sep. 30, 2014	May 31, 2012	May 31, 2005
Share-based compensation expense	$ 2,020,000	$ 2,339,000	$ 2,168,000
Weighted Average Fair Value Per Share, Options granted	$ 4.93	$ 6.41	$ 6.36
Weighted Average Remaining Contractual Life (Years), Options outstanding	3 years 4 months 28 days
Number of Shares Authorized, Available to Issue and Outstanding	1,647,306
Unrecognized compensation cost				366,943
Aggregate Intrinsic Value, Options exercised	465,000	1,084,000	5,527,000
Aggregate Intrinsic Value, Per Share, Options exercised	$ 15.51	$ 19.71	$ 8.67
2012 Plan [Member]
Shares available for grants	755,000				1,500,000
Stock Option Plan, Award Vesting Period	5 years
Common stock on date granted term period, years	10
Weighted Average Fair Value Per Share, Options granted	$ 4.93
2005 Plan [Member]
Shares available for grants	20,635					1,500,000
Stock Option Plan, Award Vesting Period	10 years
Common stock on date granted term period, years	10
Expected To Be Recognized During 2015 [Member]
Unrecognized compensation cost	330,619
Expected To Be Recognized During 2016 [Member]
Unrecognized compensation cost	$ 36,324

XML

Real Estate (Significant Business Combination Proforma) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Significant Business Combination Proforma [Abstract]
Revenue	$ 215,398	$ 157,250
Net income	119,929	125,460
Net income available to common stockholders	$ 118,486	$ 124,461
Basic earnings per share	$ 3.16	$ 3.80
Diluted earnings per share	$ 3.16	$ 3.79

XML

Significant Accounting Policies (Policy)

12 Months Ended

Dec. 31, 2014

Policy Text Block [Abstract]

Business Description and Basis of Presentation

The Company - National Health Investors, Inc. ("NHI" or the "Company"), a Maryland corporation incorporated and publicly listed in 1991, is a real estate investment trust (“REIT”) specializing in sale-leaseback, joint-venture, mortgage and mezzanine financing of need-driven and discretionary senior housing and medical investments. Our portfolio consists of real estate investments in independent, assisted and memory care communities, entrance-fee communities, senior living campuses, skilled nursing facilities, specialty hospitals and medical office buildings. Other investments include mortgages and notes, the preferred stock and marketable securities of other REITs, and a joint venture structured to comply with the provisions of the REIT Investment Diversification Empowerment Act of 2007 (“RIDEA”). Through this RIDEA joint venture, we invest in facility operations, managed by independent third-parties. We fund our real estate investments primarily through: (1) cash flow, (2) debt offerings, including bank lines of credit and ordinary term debt, and (3) the sale of equity securities.

Consolidation

Principles of Consolidation - The accompanying consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries and the joint venture entity over which we exercise control. All inter-company transactions and balances have been eliminated in consolidation. Net income is reduced by the portion of net income attributable to noncontrolling interests.

We apply Financial Accounting Standards Board ("FASB") guidance for our arrangements with variable interest entities ("VIEs") which requires us to identify entities for which control is achieved through means other than voting rights and to determine which business enterprise is the primary beneficiary of the VIE. A VIE is broadly defined as an entity with one or more of the following characteristics: (a) the total equity investment at risk is insufficient to finance the entity's activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about the entity's activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity's activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. We consolidate investments in VIEs when we are determined to be the primary beneficiary of the VIE. We may change our assessment of a VIE due to events such as modifications of contractual arrangements that affect the characteristics or adequacy of the entity's equity investments at risk and the disposal of all or a portion of an interest held by the primary beneficiary.

We identify the primary beneficiary of a VIE as the enterprise that has both: (i) the power to direct the activities of the VIE that most significantly impact the entity's economic performance; and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could be significant to the entity. We perform this analysis on an ongoing basis. At December 31, 2014, we held interests in two unconsolidated VIEs, for neither of which were we the primary beneficiary.

We also apply FASB guidance related to investments in joint ventures based on the type of controlling rights held by the members' interests in limited liability companies that may preclude consolidation by the majority equity owner in certain circumstances in which the majority equity owner would otherwise consolidate the joint venture.

We structure our joint ventures to be compliant with the provisions of the REIT Investment Diversification and Empowerment Act of 2007 ("RIDEA") which permits NHI to receive rent payments through a triple-net lease between a property company and an operating company, and is designed to give NHI the opportunity to capture additional value on the improving performance of the operating company through distributions to a taxable REIT subsidiary ("TRS"). Accordingly, the TRS holds our equity interest in an unconsolidated operating company, which we do not control, and provides an organizational structure that will allow the TRS to engage in a broad range of activities and share in revenues that would otherwise be non-qualifying income under the REIT gross income tests.

Equity-Method Investment - We report our TRS' investment in an unconsolidated entity, over whose operating and financial policies we have the ability to exercise significant influence but not control, under the equity method of accounting. Under this method of accounting, our pro rata share of the entity's earnings or losses is included in our Consolidated Statements of Income. Additionally, we adjust our investment carrying amount to reflect our share of changes in an equity-method investee's capital resulting from its capital transactions.

The initial carrying value of our equity-method investment is based on the fair value of the net assets of the entity at the time we acquired our interest. We estimate fair values of the net assets of our equity-method investee based on discounted cash flow models. The inputs we use in these models are based on assumptions that are within a reasonable range of current market rates for the respective investments.

We evaluate our equity-method investment for impairment whenever events or changes in circumstances indicate that the carrying value of our investment may exceed the fair value. If it is determined that a decline in the fair value of our investment is not temporary, and if such reduced fair value is below its carrying value, an impairment is recorded. Determining the fair value of our equity-method investments involves significant judgment. Our estimates consider all available evidence including the present value of the expected future cash flows discounted at market rates, general economic conditions and other relevant factors.

Noncontrolling Interest - We present the portion of any equity that we do not own in entities that we control (and thus consolidate) as noncontrolling interest and classify such interest as a component of consolidated equity, separate from total NHI stockholders' equity, in our Consolidated Balance Sheets. In addition, we include net income attributable to the noncontrolling interest in net income in our Consolidated Statements of Income

Use of Estimates

Use of Estimates - The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Earnings Per Share

Earnings Per Share - The weighted average number of common shares outstanding during the reporting period is used to calculate basic earnings per common share. Diluted earnings per common share assume the exercise of stock options using the treasury stock method, to the extent dilutive. Diluted earnings per share also incorporate the potential dilutive impact of our 3.25% convertible senior notes due 2021. We apply the if-converted method to our convertible debt instruments, the effect of which is that conversion will not be assumed for purposes of computing diluted earnings (loss) per share if the effect would be anti-dilutive.

Fair Value Of Financial Instruments

Fair Value Measurements - Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy is required to prioritize the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs.

The three levels of inputs used to measure fair value are as follows:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

If the fair value measurement is based on inputs from different levels of the hierarchy, the level within which the entire fair value measurement falls is the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. When an event or circumstance alters our assessment of the observability and thus the appropriate classification of an input to a fair value measurement which we deem to be significant to the fair value measurement as a whole, we will transfer that fair value measurement to the appropriate level within the fair value hierarchy.

Property, Plant and Equipment, Impairment

Real Estate Properties - Real estate properties are recorded at cost or, if acquired through business combination, at fair value. Cost or fair value at the time of acquisition is allocated among land, buildings, tenant improvements, lease and other intangibles, and personal property. For properties acquired in transactions accounted for as asset purchases, the purchase price allocation is based on the relative fair values of the assets acquired. Cost includes capitalized interest during construction periods. We use the straight-line method of depreciation for buildings over their estimated useful lives of 40 years, and improvements over their estimated useful lives ranging from 3 to 25 years.

We evaluate the recoverability of the carrying value of our real estate properties on a property-by-property basis. On a quarterly basis, we review our properties for recoverability when events or circumstances, including significant physical changes in the property, significant adverse changes in general economic conditions and significant deteriorations of the underlying cash flows of the property, indicate that the carrying amount of the property may not be recoverable. The need to recognize an impairment charge is based on estimated undiscounted future cash flows from a property compared to the carrying value of that property. If recognition of an impairment charge is necessary, it is measured as the amount by which the carrying amount of the property exceeds the fair value of the property.

We have reclassified for all periods presented the operations of facilities meeting the accounting criteria as either being sold or held for sale as discontinued operations in the Consolidated Statements of Income. Long-lived assets classified as held for sale are reported separately in the Consolidated Balance Sheets. When assets previously classified as being held for sale no longer meet the accounting criteria for such classification, we reclassify those assets as held and used, measured at the lower of their carrying amount before the assets were classified as held for sale (adjusted in the period in which the decision not to sell was made for any depreciation expense that would have been recognized had the assets been continuously classified as held and used) or their fair value at the date of the subsequent decision not to sell. Results of operations of the facilities previously disclosed in our Consolidated Statements of Income as discontinued operations which no longer meet the accounting criteria as held for sale are reclassified into continuing operations for all periods presented. There is no change to reported net income for the prior periods as a result of this reclassification.

Mortgage Notes Receivable

Mortgage and Other Notes Receivable - Each quarter, we evaluate the carrying values of our notes receivable on an instrument-by-instrument basis for recoverability when events or circumstances, including the non-receipt of contractual principal and interest payments, significant deteriorations of the financial condition of the borrower and significant adverse changes in general economic conditions, indicate that the carrying amount of the note receivable may not be recoverable. If a note receivable becomes more than 30 days delinquent as to contractual principal or interest payments, the loan is classified as non-performing, and thereafter we recognize all amounts due when received. If necessary, an impairment is measured as the amount by which the carrying amount exceeds the discounted cash flows expected to be received under the note receivable or, if foreclosure is probable, the fair value of the collateral securing the note receivable.

Cash and Cash Equivalents

Cash Equivalents - Cash equivalents consist of all highly liquid investments with an original maturity of three months or less.

Concentration Risk, Credit Risk

Concentration of Credit Risks - Our credit risks primarily relate to cash and cash equivalents, investments in preferred stock and investments in mortgage and other notes receivable. Cash and cash equivalents are primarily held in bank accounts and overnight investments. We maintain our bank deposit accounts with large financial institutions in amounts that often exceed federally-insured limits. We have not experienced any losses in such accounts. Our mortgages and other notes receivable consist primarily of secured loans on facilities. Our investment in preferred stock is in another healthcare REIT.

Our financial instruments, principally our investments in preferred stock, marketable securities, and notes receivable, are subject to the possibility of loss of the carrying values as a result of either the failure of other parties to perform according to their contractual obligations or changes in market prices which may make the instruments less valuable. We obtain collateral in the form of mortgage liens and other protective rights and continually monitor these rights in order to reduce such possibilities of loss. We evaluate the need to provide for reserves for potential losses on our financial instruments based on management's periodic review of our portfolio on an instrument-by-instrument basis.

Marketable Securities

Marketable Securities - Our investments in marketable securities are classified as available-for-sale securities. Unrealized gains and losses on available-for-sale securities are recorded in stockholders' equity. We evaluate our marketable securities for other-than-temporary impairments on at least a quarterly basis. Realized gains and losses from the sale of available-for-sale securities are determined on a specific-identification basis.

A decline in the market value of any available-for-sale or held-to-maturity security below cost that is deemed to be other-than-temporary results in an impairment to reduce the carrying amount to fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other-than-temporary, we consider whether we have the ability and intent to hold the investment until a market price recovery and consider whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and duration of the impairment, changes in value subsequent to year-end and forecasted performance of the investment.

Deferred Charges

Deferred Costs - Costs incurred to acquire debt are amortized by the effective interest method over the term of the related debt.

Revenue Recognition, Deferred Revenue

Deferred Income - Deferred income primarily includes non-refundable loan and lease commitment fees received by us, which are amortized into income over the expected period of the related loan or lease. In the event that our financing commitment to a potential borrower or lessee expires, the related commitment fees are recognized into income immediately. Commitment fees may be charged based on the terms of the loan or lease agreements and the creditworthiness of the parties.

Revenue Recognition

Rental Income - Base rental income is recognized using the straight-line method over the term of the lease. Under certain leases, we receive additional contingent rent, which is calculated on the increase in revenues of the lessee over a base year or base quarter. We recognize contingent rent annually or quarterly when, based on the actual revenues of the lessee, receipt of such income is probable since the target threshold has been achieved. Revenue from minimum lease payments under our leases is recognized on a straight-line basis to the extent that future lease payments are considered collectible. Lease payments that depend on a factor directly related to future use of the property, such as an increase in annual revenues over a base year, are considered to be contingent rentals and are excluded from minimum lease payments.

If rental income calculated on a straight-line basis exceeds the cash rent due under a lease, the difference is recorded as an increase to straight-line rent receivable in the Consolidated Balance Sheets and an increase in rental income in the Consolidated Statements of Income. If rental income on a straight-line basis is calculated to be less than cash received, there is a decrease in the same accounts.

We identify a lease as non-performing if a required payment is not received within 30 days of the date it is due. Our policy related to rental income on non-performing leased real estate properties is to recognize rental income in the period when the related cash is received. As of December 31, 2014, we had not identified any of our leases as non-performing.

Mortgage Interest Income - Mortgage interest income is recognized based on the interest rates and principal amounts outstanding on the mortgage notes receivable. Under certain mortgages, we receive additional contingent interest, which is calculated on the increase in the current year revenues of a borrower over a base year. We identify a mortgage loan as non-performing if a required payment is not received within 30 days of the date it is due. Our policy related to mortgage interest income on non-performing mortgage loans is to recognize mortgage interest income in the period when the cash is received. As of December 31, 2014, we had not identified any of our mortgages as non-performing.

Investment Income and Other - Investment income and other includes dividends when declared and interest when earned from investments in preferred stock and marketable securities of other healthcare REITs, interest on cash and cash equivalents when earned, and amortization of deferred income. Realized gains and losses on sales of marketable securities using the specific-identification method are included as a separate component of continuing operations in the Consolidated Statements of Income as investment and other gains.

Derivatives

Derivatives - In the normal course of business, we are subject to risk from adverse fluctuations in interest rates. We have periodically chosen to manage this risk through the use of derivative financial instruments, primarily interest rate swaps. Counterparties to these contracts are major financial institutions. We are exposed to credit loss in the event of nonperformance by these counterparties. We do not use derivative instruments for trading or speculative purposes. Our objective in managing exposure to market risk is to limit the impact on cash flows.

To qualify for hedge accounting, our interest rate swaps must effectively reduce the risk exposure that they are designed to hedge. In addition, at inception of a qualifying cash flow hedging relationship, the underlying transaction or transactions must be, and are expected to remain, probable of occurring in accordance with our related assertions. All of our hedges are cash flow hedges.

We recognize all derivative instruments, including embedded derivatives required to be bifurcated, as assets or liabilities at their fair value in the Consolidated Balance Sheets. Changes in the fair value of derivative instruments that are not designated as hedges or that do not meet the criteria of hedge accounting are recognized in earnings. For derivatives designated in qualifying cash flow hedging relationships, the change in fair value of the effective portion of the derivatives is recognized in accumulated other comprehensive income (loss), whereas the change in fair value of the ineffective portion is recognized in earnings.

Income Tax

Federal Income Taxes - We intend at all times to qualify as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. Effective October 1, 2012, we began recording income tax expense or benefit with respect to one of our subsidiaries which is taxed as a Taxable REIT Subsidiary ("TRS") under provisions similar to those applicable to regular corporations. Aside from such income taxes which may be applicable to the taxable income in the TRS, we will not be subject to U.S. federal income tax, provided that we continue to qualify as a REIT and make distributions to stockholders equal to or in excess of our taxable income. Accordingly, no provision for federal income taxes has been made in the consolidated financial statements, except for the provision on the taxable income of the TRS which is included in franchise, excise and other taxes in the Consolidated Statements of Income. Our failure to continue to qualify under the applicable REIT qualification rules and regulations would have a material adverse impact on our financial position, results of operations and cash flows.

Earnings and profits, which determine the taxability of dividends to stockholders, differ from net income reported for financial reporting purposes due primarily to differences in the basis of assets, estimated useful lives used to compute depreciation expense, gains on sales of real estate, non-cash compensation expense and recognition of commitment fees.

Our tax returns filed for years beginning in 2011 are subject to examination by taxing authorities. We classify interest and penalties related to uncertain tax positions, if any, in our consolidated financial statements as a component of income tax expense.

Segment Reporting

Segment Disclosures - We are in the business of owning and financing health care properties. We are managed as one segment, rather than multiple segments for internal purposes and for internal decision making.

New Accounting Pronouncements

New Accounting Pronouncements - In the first quarter of 2014, we adopted ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Under ASU 2014-08, disposals will be reported as discontinued operations only when the disposal represents a strategic shift that will have a major effect on our operations and financial results. Previously, we reported the disposition of components that were either reporting units, subsidiaries, or asset groups as discontinued operations. ASU 2014-08 is effective for all disposals (or classifications as held for sale) of components that occur on or after December 15, 2014. We have elected early adoption, under which terms we will prospectively apply ASU 2014-08 and report as discontinued operations only those disposals (or classifications as held for sale) that have not been previously reported.

In May 2014 the FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 provides a principles-based approach for a broad range of revenue generating transactions, including the sale of real estate, which will generally require more estimates and more judgment and more disclosures than under current guidance. Because this ASU specifically excludes lease contracts from its scope, its application is not expected to impact our recognition of rental income on a straight-line basis. ASU 2014-09 is effective for public entities for annual periods beginning after December 15, 2016, including interim periods therein. Early adoption is prohibited. We have yet to determine the method by which ASU 2014-09 will be adopted in 2017 and we are continuing to study the effect that our eventual adoption of this standard will have on our reported financial position and results of operation, the extent of which cannot be reasonably estimable at this time.

XML

Schedule IV - Mortgage Loans on Real Estate Schedule IV - Mortgage Loans on Real Estate

12 Months Ended

Dec. 31, 2014

Schedule IV - Mortgage Loans on Real Estate [Abstract]

Mortgage Loans on Real Estate, by Loan Disclosure [Text Block]

NATIONAL HEALTH INVESTORS, INC.
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
December 31, 2014
			Monthly						Amount Subject To
	Interest	Maturity	Payment	Prior	Original		Carrying		Delinquent Principal
	Rate	Date	Terms	Liens	Face Amount		Amount		or Interest
					(in thousands)
First Mortgages:
Skilled nursing facilities:
Grundy, VA	8.0%	2032	$31,000		$	4,396	$	3,099
Virginia Beach, VA	8.0%	2031	$31,000		3,814		2,795
Lexington, VA	8.0%	2032	$21,000		3,089		1,989
Brookneal, VA	8.0%	2031	$21,000		2,780		1,959
Laurel Fork, VA	8.0%	2030	$20,000		2,672		1,893
Front Royal, VA	9.6%	2027	$22,000		2,367		1,588
Assisted living facility in Owatonna, MN	7.5%	2018	$38,000		5,033		3,657
Construction Loan:
Transitional rehabilitation center in Mesa, Arizona	10.0%	2015	Interest Only		13,870		11,870
Second Mortgages:
Skilled nursing facility in Georgetown, TX	14.0%	2015	Interest Only		1,000		1,000
Assisted living facilities:
Ocala, FL	13.0%	2014	Interest Only		2,500		2,500
Naples, FL	12.0%	2016	Interest Only		2,500		2,500
							$	34,850	$	—

See the notes to our consolidated financial statements for more information on our mortgage loan receivables.

NATIONAL HEALTH INVESTORS, INC.
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
FOR THE YEARS ENDED DECEMBER 31, 2014, 2013 AND 2012
(in thousands)
	December 31,
	2014		2013		2012
Reconciliation of mortgage loans on real estate
Balance at beginning of period	$	34,926	$	68,214	$	78,672
Additions:
New mortgage loans	1,131		1,369		—
Total Additions	1,131		1,369		—
Deductions:
Settlement of mortgage note by real estate acquisition	—		13,741		—
Impairment of mortgage note	—		4,037		2,300
Collection of principal, less recoveries of previous write-downs	1,207		16,879		8,158
Total Deductions	1,207		34,657		10,458
Balance at end of period	$	34,850	$	34,926	$	68,214

XML

Debt (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014 properties	Dec. 31, 2013	Dec. 31, 2012	Mar. 27, 2014	Sep. 30, 2014 properties
Proceeds from Convertible Debt	$ 200,000,000	$ 0	$ 0
Debt Instrument, Convertible, Conversion Ratio	13.926
Convertible Debt Instrument, Conversion Ratio, Principal Amount, Basis	1,000
Debt Instrument, Convertible, Conversion Price	$ 71.81
Debt Instrument, Convertible, Number of Equity Instruments	2,785,200
Convertible Debt	193,037,000	0		192,238,000
Debt Instrument, Convertible, Carrying Amount of Equity Component	7,762,000
Debt Instrument, Interest Rate, Effective Percentage	3.90%
Line of Credit Facility, Maximum Borrowing Capacity	700,000,000
Credit Facility, Current Revolving Borrowing Capacity	450,000,000
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	4000.00%
Credit Facility Expansion Amount	130,000,000
Number of Real Estate Properties	172
Noncash or Part Noncash Acquisition, Value of Liabilities Assumed	2,091,000	3,086,000	0
Debt Instrument, Name, Convertible Senior Notes [Member]
Debt Issuance Cost	6,063,000
Debt Instrument, Interest Rate, Stated Percentage	3.25%
Debt Instrument, Name, Revolving Credit Facility [Member]
Debt Maturity, Extension Option, Number Of Years	1 year 0 months 0 days
Debt Instrument, Basis Spread on Variable Rate	15000.00%
Unused balance of the unsecured revolving credit facility	76,000,000
Debt Instrument Name, $130m Term Loan - June 2020 Maturity [Member]
Term Loans, Outstanding Balance	130,000,000
Debt Instrument, Basis Spread on Variable Rate	17500.00%
Debt Instrument Name, $120m Term Loans - June 2020 Maturity [Member]
Term Loans, Outstanding Balance	120,000,000
Number of Term Loans	2
Debt Instrument, Basis Spread on Variable Rate	17500.00%
Debt Instrument, Name, Fannie Mae (A) [Member]
Bank term loans - secured	70,131,000
Debt Instrument, Name, Fannie Mae (B) [Member]
Bank term loans - secured	7,136,000
Debt Instrument, Name, Q3 2014 HUD Mortgages [Member]
Secured Debt, Outstanding Balance	38,007,000
Debt Instrument, Name, HUD Mortgages [Member]
Bank term loans - secured	45,689,000	0
Number of Real Estate Properties	9
Secured Debt, Outstanding Balance	47,352,000
Interest Rate Swap, Date Entered, May 2012 [Member]
Derivative, Fixed Interest Rate	3.29%
Derivative, Basis Spread on Variable Rate	1.75%
Derivative, Notional Amount	40,000,000
Interest Rate Cash Flow Hedge Liability at Fair Value	98,000
Allocated to Debt [Member] | Debt Instrument, Name, Convertible Senior Notes [Member]
Debt Issuance Cost	5,788,000
Allocated to Equity [Member] | Debt Instrument, Name, Convertible Senior Notes [Member]
Debt Issuance Cost	275,000
Debt Instrument, Interest Rate, Period, Year 1 [Member] | Debt Instrument, Name, HUD Mortgages [Member]
Mortgage Loans on Real Estate, Interest Rate	4.65%
Debt Instrument, Interest Rate, Period, After Year 1 [Member] | Debt Instrument, Name, HUD Mortgages [Member]
Mortgage Loans on Real Estate, Interest Rate	4.30%
Fundamental Long Term Care Holdings [Member]
Number of Real Estate Properties	2				2
Expected Annual Rental Income	$ 250,000

XML

Real Estate (Summary of NHC Percentage Rent) (Details) (National Healthcare Corporation [Member], USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Total percentage rent	$ 2,307	$ 3,021	$ 2,527
Current year [Member]
Total percentage rent	2,292	2,275	1,530
Prior year final certification [Member]
Total percentage rent	$ 15	$ 746	$ 997

XML

Real Estate (Tables)

12 Months Ended

Dec. 31, 2014

Real Estate [Abstract]

New Real Estate Investments [Table Text Block]

During the year endedDecember 31, 2014, we made the following real estate investments and commitments as described below (dollars in thousands):

Operator	Properties	Asset Class	Amount
Senior Living Communities	8	SHO	$	476,000
Bickford Senior Living	1	SHO	16,488
Prestige Senior Living	4	3 SNF & 1 SHO	45,115
Chancellor Health Care	2	SHO	17,150
Senior Living Management	1	SHO	700
			$	555,453

Summary of NHC Percentage Rent [Table Text Block]

The following table summarizes the percentage rent received and recognized from NHC (in thousands):

	Year Ended December 31,
	2014		2013		2012
Current year	$	2,292	$	2,275	$	1,530
Prior year final certification1	15		746		997
Total percentage rent	$	2,307	$	3,021	$	2,527

¹ For purposes of the percentage rent calculation described in the Master Lease Agreement, NHC’s annual revenue by facility for a given year is certified to NHI by March 31st of the following year.

Business Acquisition, Pro Forma Information [Table Text Block]

January 1, 2013 (in thousands except per share amounts):

	2014		2013
Revenue	$	215,398	$	157,250
Net income	$	119,929	$	125,460
Net income available to common stockholders	$	118,486	$	124,461
Basic earnings per common share	$	3.16	$	3.80
Diluted earnings per common share	$	3.16	$	3.79

Future Minimum Lease Payments [Table Text Block]

Future Minimum Lease Payments

At December 31, 2014, the future minimum lease payments (excluding percentage rent) to be received by us under our operating leases with our tenants are as follows (in thousands):

2015	$	182,195
2016	183,255
2017	183,353
2018	172,155
2019	167,924
Thereafter	1,531,958
	$	2,420,840

XML

Equity-Method Investment And Other Assets (Tables)

12 Months Ended

Dec. 31, 2014

Equity Method Investments And Other Assets [Abstract]

Equity-Method Investment And Other Assets Disclosure [Table Text Block]

Our equity-method investment in OpCo and other assets consist of the following (in thousands):

	As of December 31,
	2014		2013
Equity-method investment in OpCo	$	9,424	$	9,494
Debt issuance costs	11,491		7,366
Accounts receivable and other assets	3,818		2,502
Replacement reserve and tax escrows	4,324		706
Lease escrow deposits	21,648		22,775
Escrow deposit for tax deferred exchange	—		23,813
	$	50,705	$	66,656

XML

Consolidated Statement Of Stockholders' Equity (Parenthetical) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Statement of Stockholders' Equity [Abstract]
Common Stock, Dividends, Per Share, Declared	$ 3.08	$ 2.90	$ 2.86

XML

Investments In Marketable Securities (Tables)

12 Months Ended

Dec. 31, 2014

Marketable Securities [Abstract]

Schedule Of Marketable Securities

Marketable securities consist of the following (in thousands):

	December 31, 2014				December 31, 2013
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Common stock of other healthcare REITs	$	4,088	$	15,503	$	4,088	$	12,650

XML

Selected Quarterly Financial Data (Unaudited) Selected Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2014

Dec. 31, 2013

Selected Quarterly Financial Data [Abstract]

Quarterly Financial Information 2014 & 2013

2014	Quarter Ended
	March 31,		June 30,		September 30,		December 31,
Net revenues	$	43,136	$	44,160	$	44,478	$	45,735
Investment and other gains	—		—		—		—
Income from continuing operations attributable to common stockholders	23,533		25,294		25,250		27,532
Discontinued operations	—		—		—		—
Net income attributable to common stockholders	$	23,533	$	25,294	$	25,250	$	27,532
Weighted average common shares outstanding:
Basic	33,051,415		33,052,750		33,055,992		34,343,706
Diluted	33,085,232		33,087,283		33,088,570		34,402,969
Earnings per common share:
Basic:
Income from continuing operations attributable to common stockholders	$	.71	$	.77	$	.76	$	.80
Discontinued operations	—		—		—		—
Net income attributable to common stockholders	$	.71	$	.77	$	.76	$	.80
Diluted:
Income from continuing operations attributable to common stockholders	$	.71	$	.76	$	.76	$	.80
Discontinued operations	—		—		—		—
Net income attributable to common stockholders	$	.71	$	.76	$	.76	$	.80

2013	Quarter Ended
	March 31,		June 30,		September 30,		December 31,
Net revenues	$	27,104	$	27,089	$	30,845	$	32,790
Investment and other gains	22		14		3		3,267
Income from continuing operations attributable to common stockholders	14,050		18,300		22,035		24,114
Discontinued operations	1,693		1,621		20,709		3,661
Net income attributable to common stockholders	$	15,743	$	19,921	$	42,744	$	27,775
Weighted average common shares outstanding:
Basic	27,876,176		27,876,176		27,876,176		29,831,176
Diluted	27,911,584		27,913,727		27,905,545		29,860,614
Earnings per common share:
Basic:
Income from continuing operations attributable to common stockholders	$	.50	$	.65	$	.79	$	.81
Discontinued operations	.06		.06		.74		.12
Net income attributable to common stockholders	$	.56	$	.71	$	1.53	$	.93
Diluted:
Income from continuing operations attributable to common stockholders	$	.50	$	.65	$	.79	$	.81
Discontinued operations	.06		.06		.74		.12
Net income attributable to common stockholders	$	.56	$	.71	$	1.53	$	.93

XML

Debt (Schedule of Debt) (Details) (USD $)	Dec. 31, 2014	Mar. 27, 2014	Dec. 31, 2013
Convertible senior notes - unsecured (net of discount of $6,963)	$ 193,037,000	$ 192,238,000	$ 0
Revolving credit facility - unsecured	374,000,000		167,000,000
Bank term loans - unsecured	250,000,000		370,000,000
Debt, Long-term and Short-term, Combined Amount	862,726,000		617,080,000
Debt Instrument, Unamortized Premium	1,756,000
Debt Instrument, Name, HUD Mortgages [Member]
Debt Instrument, Unamortized Discount	1,662,000
Fannie Mae term loans - secured (including premium of $1,756)	45,689,000		0
Debt Instrument, Name, Fannie Mae Term Loans [Member]
Fannie Mae term loans - secured (including premium of $1,756)	0		80,080,000
Debt Instrument, Name, Convertible Senior Notes [Member]
Debt Instrument, Unamortized Discount	$ 6,963,000

XML

Selected Quarterly Financial Data (Unaudited) Selected Quarterly Financial Data (Unaudited) (Quarterly Financial information - 2014) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Selected Quarterly Financial Data [Abstract]
Net revenues	$ 45,735	$ 44,478	$ 44,160	$ 43,136	$ 32,790	$ 30,845	$ 27,089	$ 27,104	$ 177,509	$ 117,828	$ 93,317
Investment and other gains	0	0	0	0	3,267	3	14	22
Income from continuing operations attributable to common stockholders	27,532	25,250	25,294	23,533	24,114	22,035	18,300	14,050	101,609	78,499	72,667
Discontinued operations	0	0	0	0	3,661	20,709	1,621	1,693
Net income attributable to common stockholders	$ 27,532	$ 25,250	$ 25,294	$ 23,533	$ 27,775	$ 42,744	$ 19,921	$ 15,743	$ 101,609	$ 106,183	$ 90,731
Weighted average common shares outstanding:
Basic	34,343,706	33,055,992	33,052,750	33,051,415	29,831,176	27,876,176	27,876,176	27,876,176	33,375,966	28,362,398	27,811,813
Diluted	34,402,969	33,088,570	33,087,283	33,085,232	29,860,614	27,905,545	27,913,727	27,911,584	33,416,014	28,397,702	27,838,720
Basic:
Income from continuing operations attributable to common stockholders	$ 0.80	$ 0.76	$ 0.77	$ 0.71	$ 0.81	$ 0.79	$ 0.65	$ 0.50	$ 3.04	$ 2.77	$ 2.61
Discontinued operations	$ 0.00	$ 0.00	$ 0.00	$ 0.00	$ 0.12	$ 0.74	$ 0.06	$ 0.06	$ 0.00	$ 0.97	$ 0.65
Net income per common share attributable to common stockholders	$ 0.80	$ 0.76	$ 0.77	$ 0.71	$ 0.93	$ 1.53	$ 0.71	$ 0.56	$ 3.04	$ 3.74	$ 3.26
Diluted:
Income from continuing operations attributable to common stockholders	$ 0.80	$ 0.76	$ 0.76	$ 0.71	$ 0.81	$ 0.79	$ 0.65	$ 0.50	$ 3.04	$ 2.77	$ 2.61
Discontinued operations	$ 0.00	$ 0.00	$ 0.00	$ 0.00	$ 0.12	$ 0.74	$ 0.06	$ 0.06	$ 0.00	$ 0.97	$ 0.65
Net income per common share attributable to common stockholders	$ 0.80	$ 0.76	$ 0.76	$ 0.71	$ 0.93	$ 1.53	$ 0.71	$ 0.56	$ 3.04	$ 3.74	$ 3.26

XML

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Assets
Land	$ 127,566	$ 91,770
Buildings and improvements	1,854,855	1,320,567
Construction in progress	6,428	9,665
Real estate properties, gross	1,988,849	1,422,002
Less accumulated depreciation	(212,300)	(174,262)
Real estate properties, net	1,776,549	1,247,740
Mortgage and other notes receivable, net	63,630	60,639
Investment in preferred stock, at cost	38,132	38,132
Cash and cash equivalents	3,287	11,312
Marketable securities	15,503	12,650
Straight-line rent receivable	35,154	18,691
Equity-method investment and other assets	50,705	66,656
Total Assets	1,982,960	1,455,820
Liabilities and Equity
Debt	862,726	617,080
Real estate purchase liabilities	3,000	2,600
Accounts payable and accrued expenses	15,718	8,011
Dividends Payable	28,864	24,293
Lease deposit liabilities	21,648	22,775
Deferred income	1,071	3,901
Total Liabilities	933,027	678,660
Commitments and Contingencies
National Health Investors Stockholders' Equity:
Common stock, $.01 par value; 40,000,000 shares authorized; 33,051,176 and 27,857,217 shares issued and outstanding, respectively	375	330
Capital in excess of par value	1,033,896	753,635
Cumulative net income in excess (deficit) of dividends	(569)	3,043
Accumulated other comprehensive income	6,223	9,538
Total National Health Investors Stockholders' Equity	1,039,925	766,546
Noncontrolling interest	10,008	10,614
Total Equity	1,049,933	777,160
Total Liabilities and Equity	$ 1,982,960	$ 1,455,820

XML

Real Estate Real Estate (Future Minimum Lease Payments) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014
Future Minimum Lease Payments [Abstract]
Operating Leases, Future Minimum Payments Due, Next Twelve Months	$ 182,195
Operating Leases, Future Minimum Payments, Due in Two Years	183,255
Operating Leases, Future Minimum Payments, Due in Three Years	183,353
Operating Leases, Future Minimum Payments, Due in Four Years	172,155
Operating Leases, Future Minimum Payments, Due in Five Years	167,924
Operating Leases, Future Minimum Payments, Due Thereafter	1,531,958
Operating Leases, Future Minimum Payments Due	$ 2,420,840

XML

Consolidated Statements Of Cash Flows (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Cash flows from operating activities:
Net income	$ 103,052,000	$ 107,182,000	$ 90,898,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	38,078,000	20,658,000	16,981,000
Amortization	2,611,000	247,000	320,000
Amortization	2,580,000	247,000	320,000
Straight-line rental income	(16,463,000)	(6,560,000)	(3,664,000)
Unamortized debt premium written off	(1,655,000)	0	0
Write-off of debt issuance costs	2,145,000	416,000	0
Loan and realty losses (recoveries), net	0	1,976,000	(2,195,000)
Gain on sale of real estate	0	(22,258,000)	(11,966,000)
Gain on payoff of mortgage note	0	0	(4,605,000)
Gain on purchase liability settlement	0	(3,256,000)	0
Net realized gains on sales of marketable securities	0	0	(30,000)
Share-based compensation	2,020,000	2,339,000	2,168,000
Income from equity-method investee	71,000	(324,000)	(45,000)
Change in operating assets and liabilities:
Equity-method investment and other assets	(2,334,000)	(659,000)	(745,000)
Accounts payable and accrued expenses	1,448,000	2,495,000	(512,000)
Deferred income	(2,830,000)	1,937,000	(339,000)
Net cash provided by operating activities	126,143,000	104,193,000	86,266,000
Cash flows from investing activities:
Investment in mortgage and other notes receivable	(4,447,000)	(11,082,000)	(16,241,000)
Collection of mortgage and other notes receivable	1,456,000	18,976,000	17,463,000
Investment in real estate	(520,505,000)	(635,971,000)	(110,601,000)
Investment in real estate development	(8,455,000)	(11,926,000)	0
Investment in renovations of existing real estate	(4,211,000)	(6,773,000)	0
Payments into facility repair escrows	(1,554,000)	0	0
Investment in equity-method investment	0	0	8,309,000
Payment of real estate purchase liability	(2,600,000)	0	(5,222,000)
Proceeds from disposition of real estate properties	0	20,952,000	22,975,000
Proceeds from sales of marketable securities	0	0	125,000
Net cash used in investing activities	(540,316,000)	(625,824,000)	(99,810,000)
Cash flows from financing activities:
Net change in borrowings under revolving credit facilities	207,000,000	103,000,000	(33,300,000)
Proceeds from convertible senior notes	200,000,000	0	0
Proceeds from issuance of secured debt	38,007,000	0	0
Borrowings on term loan	130,000,000	330,000,000	120,000,000
Payments of term loans	(328,515,000)	(99,655,000)	0
Debt issuance costs	(8,443,000)	(5,867,000)	(766,000)
Proceeds from equity offering, net	270,798,000	282,542,000	0
Proceeds from exercise of stock options	0	(146,000)	2,000
Distributions to noncontrolling interest	(2,049,000)	(1,250,000)	(177,000)
Dividends paid to stockholders	(100,650,000)	(85,145,000)	(78,925,000)
Net cash provided by (used in) financing activities	406,148,000	523,771,000	6,830,000
(Decrease) increase in cash and cash equivalents	(8,025,000)	2,140,000	(6,714,000)
Cash and cash equivalents, beginning of year	11,312,000	9,172,000	15,886,000
Cash and cash equivalents, end of year	3,287,000	11,312,000	9,172,000
Supplemental disclosure of cash flow information:
Interest Paid	22,172,000	7,964,000	3,240,000
Supplemental schedule of non-cash investing and financing activities:
Settlement of mortgage note by real estate acquisition	0	13,741,000	0
Lease escrow deposits	0	22,775,000	0
Escrow deposit for tax deferred exchange	0	23,813,000	0
Conditional consideration in asset acquisition	3,000,000	1,600,000	0
Accounts payable increase due to investments in real estate	2,091,000	3,086,000	0
Discount on mortgage note receivable purchased	2,062,000	0
Assumption of debt in real estate acquisition	7,858,000	80,528,000	19,250,000
Noncontrolling interest conveyed in acquisition	0	0	10,964,000
Assignment of net assets in equity-method investee	$ 0	$ 817,000	$ 0

XML

Share-Based Compensation Share-Based Compensation (Schedule of Stock Option Valuation Assumptions) (Details)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Schedule of Stock Option Valuation Assumptions [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate	5.00%	4.50%	6.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate	21.50%	23.80%	32.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	2 years 9 months 22 days	2 years 9 months 14 days	3 years 10 months 9 days
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	0.63%	0.35%	0.32%

XML

Share-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2014

Deferred Compensation Arrangements [Abstract]

Schedule of Stock Option Valuation Assumptions [Table Text Block]

The fair value of each grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

	2014	2013	2012
Dividend yield	5.0%	4.5%	6.0%
Expected volatility	21.5%	23.8%	32.0%
Expected lives	2.8 years	2.8 years	3.9 years
Risk-free interest rate	0.63%	0.35%	0.32%

Schedule of Stock Option Activity [Table Text Block]

The following tables summarize our outstanding stock options:

				Weighted Average
	Number		Weighted Average	Remaining	Aggregate
	of Shares		Exercise Price	Contractual Life (Years)	Intrinsic Value
Outstanding December 31, 2011	509,422		$42.03
Options granted under 2005 Plan	340,000		$47.52
Options exercised under 1997 Plan	(19,266	)	$33.26
Options exercised under 2005 Plan	(618,481	)	$43.63
Outstanding December 31, 2012	211,675		$46.60
Options granted under 2005 Plan	360,000		$64.49
Options exercised under 2005 Plan	(55,001	)	$45.31
Outstanding December 31, 2013	516,674		$59.20
Options granted under 2012 Plan	400,000		$61.31
Options exercised under 2005 Plan	(26,670	)	$47.52
Options exercised under 2012 Plan	(3,333	)	$61.31
Options forfeited under 2012 Plan	(15,000	)	$64.49
Outstanding December 31, 2014	871,671		$60.43	3.41	$	8,308,000
Exercisable December 31, 2014	644,990		$59.79	3.25	$	6,559,000

				Remaining
Grant	Number	Exercise		Contractual
Date	of Shares	Price		Life in Years
2/22/2011	15,000	$	45.58	1.15
2/25/2011	33,336	$	46.22	1.15
2/21/2012	81,668	$	47.52	2.15
2/25/2013	345,000	$	64.49	3.16
2/25/2014	396,667	$	61.31	4.16
Outstanding December 31, 2014	871,671

Schedule of Nonvested Share Activity [Table Text Block]

The following table summarizes our outstanding non-vested stock options:

	Number of Shares		Weighted Average Grant Date Fair Value
Non-vested December 31, 2013	193,344		$6.95
Options granted under 2012 Plan	400,000		$4.93
Options vested under 2012 Plan	(306,657	)	$5.34
Options vested under 2005 Plan	(60,006	)	$7.23
Non-vested December 31, 2014	226,681		$5.64

XML

Earnings and Dividends Per Share (Summary Of Calculation Of Basic And Diluted Earnings Per Share) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Earnings Per Share [Abstract]
Income from continuing operations attributable to common stockholders	$ 27,532	$ 25,250	$ 25,294	$ 23,533	$ 24,114	$ 22,035	$ 18,300	$ 14,050	$ 101,609	$ 78,499	$ 72,667
Income from discontinued operations									0	27,684	18,064
Net income attributable to common stockholders	$ 27,532	$ 25,250	$ 25,294	$ 23,533	$ 27,775	$ 42,744	$ 19,921	$ 15,743	$ 101,609	$ 106,183	$ 90,731
Weighted Average Number of Shares Outstanding, Basic	34,343,706	33,055,992	33,052,750	33,051,415	29,831,176	27,876,176	27,876,176	27,876,176	33,375,966	28,362,398	27,811,813
Income from continuing operations per common share, basic	$ 0.80	$ 0.76	$ 0.77	$ 0.71	$ 0.81	$ 0.79	$ 0.65	$ 0.50	$ 3.04	$ 2.77	$ 2.61
Discontinued operations per common share, basic	$ 0.00	$ 0.00	$ 0.00	$ 0.00	$ 0.12	$ 0.74	$ 0.06	$ 0.06	$ 0.00	$ 0.97	$ 0.65
Net income per common share attributable to common stockholders	$ 0.80	$ 0.76	$ 0.77	$ 0.71	$ 0.93	$ 1.53	$ 0.71	$ 0.56	$ 3.04	$ 3.74	$ 3.26
Weighted average common shares outstanding, diluted									33,375,966	28,362,398	27,811,813
Stock options, diluted									40,048	35,304	26,907
Average dilutive common shares outstanding	34,402,969	33,088,570	33,087,283	33,085,232	29,860,614	27,905,545	27,913,727	27,911,584	33,416,014	28,397,702	27,838,720
Income from continuing operations per common share	$ 0.80	$ 0.76	$ 0.76	$ 0.71	$ 0.81	$ 0.79	$ 0.65	$ 0.50	$ 3.04	$ 2.77	$ 2.61
Discontinued operations per common share	$ 0.00	$ 0.00	$ 0.00	$ 0.00	$ 0.12	$ 0.74	$ 0.06	$ 0.06	$ 0.00	$ 0.97	$ 0.65
Net income per common share attributable to common stockholders	$ 0.80	$ 0.76	$ 0.76	$ 0.71	$ 0.93	$ 1.53	$ 0.71	$ 0.56	$ 3.04	$ 3.74	$ 3.26
Stock options with an exercise price in excess of the market price for our common shares									13,831	23,883	0
Common Stock, Dividends, Per Share, Declared, Regular									$ 3.08	$ 2.90	$ 2.64
Special dividends declared per common share1									$ 0.00	$ 0.00	$ 0.22

XML

Fair Value Of Financial Instruments

12 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Of Financial Instruments

FAIR VALUE OF FINANCIAL INSTRUMENTS

Our financial assets and liabilities measured at fair value (based on the hierarchy of the three levels of inputs described in Note 1) on a recurring basis include marketable securities, derivative financial instruments and contingent consideration arrangements. Marketable securities consist of common stock of other healthcare REITs. Derivative financial instruments include our interest rate swap agreements. Contingent consideration arrangements relate to certain provisions of recent real estate purchase agreements involving both business combinations.

Marketable securities. We utilize quoted prices in active markets to measure debt and equity securities; these items are classified as Level 1 in the hierarchy and include the common and preferred stock of other healthcare REITs.

Derivative financial instruments. Derivative financial instruments are valued in the market using discounted cash flow techniques. These techniques incorporate primarily Level 2 inputs. The market inputs are utilized in the discounted cash flow calculation considering the instrument's term, notional amount, discount rate and credit risk. Significant inputs to the derivative valuation model for interest rate swaps are observable in active markets and are classified as Level 2 in the hierarchy.

Contingent consideration. Contingent consideration arrangements are classified as Level 3 and are valued using unobservable inputs about the nature of the contingent arrangement and the counter-party to the arrangement, as well as our assumptions about the probability of full settlement of the contingency.

Assets and liabilities measured at fair value on a recurring basis are as follows (in thousands):

		Fair Value Measurement
	Balance Sheet Classification	December 31, 2014		December 31, 2013
Level 1
Common stock of other healthcare REITs	Marketable securities	$	15,503	$	12,650
Level 2
Interest rate swap asset	Other assets	$	—	$	975
Interest rate swap liability	Accrued expenses	$	5,193	$	—
Level 3
Contingent consideration	Real estate purchase liabilities	$	3,000	$	2,600

The following table presents a reconciliation of Level 3 liabilities measured at fair value on a recurring basis for the years ended December 31, 2014 and 2013(in thousands):

	Fair Value Beginning of Period		Transfers Into Level 3		Realized Gains and (Losses)		Purchases, Issuances and Settlements			Fair Value at End of Period		Total Period Losses Included in Earnings Attributable to the Change in Unrealized Losses Relating to Assets Held at End of Year
2014
Contingent consideration	$	2,600	$	—	$	—	$	400		$	3,000	$	—
2013
Contingent consideration	$	4,256	$	—	$	—	$	(1,656	)	$	2,600	$	—

Carrying values and fair values of financial instruments that are not carried at fair value at December 31, 2014 and 2013 in the Consolidated Balance Sheets are as follows (in thousands):

	Carrying Amount				Fair Value Measurement
	2014		2013		2014		2013
Level 2
Variable rate debt	$	624,000	$	537,000	$	624,000	$	537,000
Fixed rate debt	$	238,726	$	80,080	$	254,150	$	79,365
Level 3
Mortgage and other notes receivable	$	63,630	$	60,639	$	72,435	$	67,201

The fair value of mortgage and other notes receivable is based on credit risk and discount rates that are not observable in the marketplace and therefore represents a Level 3 measurement.

Fixed rate debt. Fixed rate debt is classified as Level 2 and its value is based on quoted prices for similar instruments or calculated utilizing model derived valuations in which significant inputs are observable in active markets.

Carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to their short-term nature. The fair value of our borrowings under our credit facility are reasonably estimated at their carrying value at December 31, 2014 and 2013, due to the predominance of floating interest rates, which generally reflect market conditions.

XML

Discontinued Operations (Tables)

12 Months Ended

Dec. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

Schedule Of Income From Discontinued Operations

Income from discontinued operations is summarized below (in thousands):

	Year Ended December 31,
	2014		2013		2012
Revenues:
Rental income	$	—	$	5,962	$	8,304
Other income	—		21		3
Expenses:
Depreciation	—		557		2,209
Operating income	—		5,426		6,098
Gain on sale of real estate	—		22,258		11,966
Total discontinued operations	$	—	$	27,684	$	18,064
Weighted average common shares outstanding:
Basic	33,375,966		28,362,398		27,811,813
Diluted	33,416,014		28,397,702		27,838,720
Discontinued operations income per share:
Basic	$	—	$	.97	$	.65
Diluted	$	—	$	.97	$	.65

XML

Selected Quarterly Financial Data (Unaudited) Selected Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2014

Selected Quarterly Financial Data [Abstract]

Quarterly Financial Information [Text Block]

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

The following table sets forth selected quarterly financial data for the two most recent fiscal years (in thousands, except per share amounts).

2014	Quarter Ended
	March 31,		June 30,		September 30,		December 31,
Net revenues	$	43,136	$	44,160	$	44,478	$	45,735
Investment and other gains	—		—		—		—
Income from continuing operations attributable to common stockholders	23,533		25,294		25,250		27,532
Discontinued operations	—		—		—		—
Net income attributable to common stockholders	$	23,533	$	25,294	$	25,250	$	27,532
Weighted average common shares outstanding:
Basic	33,051,415		33,052,750		33,055,992		34,343,706
Diluted	33,085,232		33,087,283		33,088,570		34,402,969
Earnings per common share:
Basic:
Income from continuing operations attributable to common stockholders	$	.71	$	.77	$	.76	$	.80
Discontinued operations	—		—		—		—
Net income attributable to common stockholders	$	.71	$	.77	$	.76	$	.80
Diluted:
Income from continuing operations attributable to common stockholders	$	.71	$	.76	$	.76	$	.80
Discontinued operations	—		—		—		—
Net income attributable to common stockholders	$	.71	$	.76	$	.76	$	.80

2013	Quarter Ended
	March 31,		June 30,		September 30,		December 31,
Net revenues	$	27,104	$	27,089	$	30,845	$	32,790
Investment and other gains	22		14		3		3,267
Income from continuing operations attributable to common stockholders	14,050		18,300		22,035		24,114
Discontinued operations	1,693		1,621		20,709		3,661
Net income attributable to common stockholders	$	15,743	$	19,921	$	42,744	$	27,775
Weighted average common shares outstanding:
Basic	27,876,176		27,876,176		27,876,176		29,831,176
Diluted	27,911,584		27,913,727		27,905,545		29,860,614
Earnings per common share:
Basic:
Income from continuing operations attributable to common stockholders	$	.50	$	.65	$	.79	$	.81
Discontinued operations	.06		.06		.74		.12
Net income attributable to common stockholders	$	.56	$	.71	$	1.53	$	.93
Diluted:
Income from continuing operations attributable to common stockholders	$	.50	$	.65	$	.79	$	.81
Discontinued operations	.06		.06		.74		.12
Net income attributable to common stockholders	$	.56	$	.71	$	1.53	$	.93

Certain quarterly financial information shown above differs from amounts previously reported in the Forms 10-Q and Form 10-K for those periods due to reclassifications to retrospectively reflect the dispositions or planned dispositions of certain facilities as discontinued operations for all periods presented.

XML

Fair Value Of Financial Instruments (Assets Measured At Fair Value On A Recurring Basis) (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Loans and Leases Receivable, Net Amount	$ 63,630,000	$ 60,639,000
Fair Value, Inputs, Level 1 [Member]
Available-for-sale Securities	15,503,000	12,650,000
Fair Value, Inputs, Level 2 [Member]
Cash Flow Hedge Derivative Instrument Assets at Fair Value	0	975,000
Cash Flow Hedge Derivative Instrument Liabilities at Fair Value	5,193,000	0
Fair Value, Inputs, Level 3 [Member]
Business Combination, Contingent Consideration, Liability	3,000,000	2,600,000	4,256,000
Loans and Leases Receivable, Net Amount	$ 72,435,000	$ 67,201,000

XML

Consolidated Statement Of Equity (USD $)	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Cumulative Dividends In Excess Of Net Income [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Parent [Member]	Noncontrolling Interest [Member]
Balance, value at Dec. 31, 2011	$ 443,485,000	$ 278,000	$ 465,678,000	$ (29,652,000)	$ 7,181,000	$ 443,485,000	$ 0
Balance, shares at Dec. 31, 2011		27,751,208
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to common stockholders	90,731,000			90,731,000	374,000	91,105,000	167,000
Comprehensive income	91,272,000
Noncontrolling Interest, Increase from Subsidiary Equity Issuance	10,964,000						10,964,000
Distributions to noncontrolling interest	(266,000)						(266,000)
Shares issued on stock options exercised, shares		106,009
Shares issued on stock options exercised, value	(2,000)	(1,000)	(3,000)			(2,000)
Share-based Compensation			2,168,000
Share-based compensation	2,168,000					2,168,000
Assignment of net assets in equity-method investee	0
Dividends declared, $1.43 per share	(79,574,000)			(79,574,000)		(79,574,000)
Balance, value at Dec. 31, 2012	468,047,000	279,000	467,843,000	(18,495,000)	7,555,000	457,182,000	10,865,000
Balance, shares at Dec. 31, 2012		27,857,217
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to common stockholders	106,183,000			106,183,000	1,983,000	108,166,000	999,000
Comprehensive income	109,165,000
Distributions to noncontrolling interest	(1,250,000)						(1,250,000)
Stock Issued During Period, Shares, New Issues		5,175,000
Stock Issued During Period, Value, New Issues	282,541,000	51,000	282,490,000			282,541,000
Shares issued on stock options exercised, shares		18,959
Shares issued on stock options exercised, value	(146,000)	0	(146,000)			(146,000)
Share-based Compensation			2,339,000
Share-based compensation	2,339,000					2,339,000
Assignment of net assets in equity-method investee	817,000		817,000			817,000
Dividends declared, $1.43 per share	(84,645,000)			(84,645,000)		(84,645,000)
Balance, value at Dec. 31, 2013	777,160,000	330,000	753,635,000	3,043,000	9,538,000	766,546,000	10,614,000
Balance, shares at Dec. 31, 2013	33,051,176	33,051,176
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to common stockholders	101,609,000			101,609,000	(3,315,000)	98,294,000	1,443,000
Comprehensive income	99,737,000
Distributions to noncontrolling interest	(2,049,000)						(2,049,000)
Stock Issued During Period, Shares, New Issues		4,427,500
Stock Issued During Period, Value, New Issues	270,798,000	44,000	270,754,000			270,798,000
Shares issued on stock options exercised, shares		7,226
Shares issued on stock options exercised, value	(1,000)	(1,000)	0			(1,000)
Share-based Compensation			2,020,000
Share-based compensation	2,020,000					2,020,000
Assignment of net assets in equity-method investee	0
Adjustments to Additional Paid in Capital, Equity Component of Convertible Debt	7,487,000		7,487,000			7,487,000
Dividends declared, $1.43 per share	(105,221,000)			(105,221,000)		(105,221,000)
Balance, value at Dec. 31, 2014	$ 1,049,933,000	$ 375,000	$ 1,033,896,000	$ (569,000)	$ 6,223,000	$ 1,039,925,000	$ 10,008,000
Balance, shares at Dec. 31, 2014	37,485,902	37,485,902

XML

Consolidated Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	60,000,000	40,000,000
Common stock, shares issued	37,485,902	33,051,176
Common stock, shares outstanding	37,485,902	33,051,176

XML

Investment And Other Gains Investment And Other Gains

12 Months Ended

Dec. 31, 2014

Investment And Other Gains [Abstract]

Investment And Other Gains [Text Block]

INVESTMENT AND OTHER GAINS

The following table summarizes our investment and other gains (in thousands):

	Year Ended December 31,
	2014		2013		2012
Gain on payoff of mortgage note receivable	$	—	$	—	$	4,605
Gains on sales of marketable securities	—		—		30
Gain on purchase liability settlement	—		3,256		—
Other gains	—		50		242
	$	—	$	3,306	$	4,877

XML

Document And Entity Information (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Feb. 13, 2015	Jun. 30, 2014
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY
Entity Registrant Name	NATIONAL HEALTH INVESTORS INC
Entity Central Index Key	0000877860
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		37,564,987
Entity Current Reporting Status	Yes
Entity Public Float:			$ 1,970,533
Entity Voluntary Filers:	No
Entity Well-known Seasoned Issuer:	Yes

XML

Share-Based Compensation

12 Months Ended

Dec. 31, 2014

Deferred Compensation Arrangements [Abstract]

Share-Based Compensation

SHARE-BASED COMPENSATION

We recognize share-based compensation for all stock options granted over the requisite service period using the fair value of these grants as estimated at the date of grant using the Black-Scholes pricing model, and all restricted stock granted over the requisite service period using the market value of our publicly-traded common stock on the date of grant.

Share-Based Compensation Plans

The Compensation Committee of the Board of Directors ("the Committee") has the authority to select the participants to be granted options; to designate whether the option granted is an incentive stock option ("ISO"), a non-qualified option, or a stock appreciation right; to establish the number of shares of common stock that may be issued upon exercise of the option; to establish the vesting provision for any award; and to establish the term any award may be outstanding. The exercise price of any ISO’s granted will not be less than 100% of the fair market value of the shares of common stock on the date granted and the term of an ISO may not be more than ten years. The exercise price of any non-qualified options granted will not be less than 100% of the fair market value of the shares of common stock on the date granted unless so determined by the Committee.

In May 2012, our stockholders approved the 2012 Stock Incentive Plan ("the 2012 Plan") pursuant to which 1,500,000 shares of our common stock were made available to grant as share-based payments to employees, officers, directors or consultants. As of December 31, 2014, there were 755,000 shares available for future grants under the 2012 Plan. The individual restricted stock and option grant awards vest over periods up to five years. The term of the options under the 2012 Plan is up to ten years from the date of grant.

In May 2005, our stockholders approved the NHI 2005 Stock Option Plan ("the 2005 Plan") pursuant to which 1,500,000 shares of our common stock were made available to grant as share-based payments to employees, officers, directors or consultants. As of December 31, 2014, there were 20,635 shares available for future grants under the 2005 Plan. The individual restricted stock and option grant awards vest over periods up to ten years. The term of the options outstanding under the 2005 Plan is up to ten years from the date of grant.

Compensation expense is recognized only for the awards that ultimately vest. Accordingly, forfeitures that were not expected may result in the reversal of previously recorded compensation expense. The compensation expense reported for the years endedDecember 31, 2014, 2013 and 2012 was $2,020,000 and $2,339,000, $2,168,000,respectively, and is included in general and administrative expense in the Consolidated Statements of Income.

Determining Fair Value of Option Awards

The fair value of each option award was estimated on the grant date using the Black-Scholes option valuation model with the weighted average assumptions indicated in the following table. Each grant is valued as a single award with an expected term based upon expected employee and termination behavior. Compensation cost is recognized on the graded vesting method over the requisite service period for each separately vesting tranche of the award as though the award were, in substance, multiple awards. The expected volatility is derived using daily historical data for periods preceding the date of grant. The risk-free interest rate is the approximate yield on the United States Treasury Strips having a life equal to the expected option life on the date of grant. The expected life is an estimate of the number of years an option will be held before it is exercised.

Stock Options

The weighted average fair value per share of options granted was $4.93, $6.41 and $6.36 for 2014, 2013 and 2012, respectively.

The fair value of each grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

	2014	2013	2012
Dividend yield	5.0%	4.5%	6.0%
Expected volatility	21.5%	23.8%	32.0%
Expected lives	2.8 years	2.8 years	3.9 years
Risk-free interest rate	0.63%	0.35%	0.32%

Stock Option Activity

The following tables summarize our outstanding stock options:

				Weighted Average
	Number		Weighted Average	Remaining	Aggregate
	of Shares		Exercise Price	Contractual Life (Years)	Intrinsic Value
Outstanding December 31, 2011	509,422		$42.03
Options granted under 2005 Plan	340,000		$47.52
Options exercised under 1997 Plan	(19,266	)	$33.26
Options exercised under 2005 Plan	(618,481	)	$43.63
Outstanding December 31, 2012	211,675		$46.60
Options granted under 2005 Plan	360,000		$64.49
Options exercised under 2005 Plan	(55,001	)	$45.31
Outstanding December 31, 2013	516,674		$59.20
Options granted under 2012 Plan	400,000		$61.31
Options exercised under 2005 Plan	(26,670	)	$47.52
Options exercised under 2012 Plan	(3,333	)	$61.31
Options forfeited under 2012 Plan	(15,000	)	$64.49
Outstanding December 31, 2014	871,671		$60.43	3.41	$	8,308,000
Exercisable December 31, 2014	644,990		$59.79	3.25	$	6,559,000

				Remaining
Grant	Number	Exercise		Contractual
Date	of Shares	Price		Life in Years
2/22/2011	15,000	$	45.58	1.15
2/25/2011	33,336	$	46.22	1.15
2/21/2012	81,668	$	47.52	2.15
2/25/2013	345,000	$	64.49	3.16
2/25/2014	396,667	$	61.31	4.16
Outstanding December 31, 2014	871,671

The weighted average remaining contractual life of all options outstanding at December 31, 2014 is 3.4 years. Including outstanding stock options, our stockholders have authorized an additional 1,647,306 shares of common stock that may be issued under the share-based payments plans.

The following table summarizes our outstanding non-vested stock options:

	Number of Shares		Weighted Average Grant Date Fair Value
Non-vested December 31, 2013	193,344		$6.95
Options granted under 2012 Plan	400,000		$4.93
Options vested under 2012 Plan	(306,657	)	$5.34
Options vested under 2005 Plan	(60,006	)	$7.23
Non-vested December 31, 2014	226,681		$5.64

At December 31, 2014, we had $366,943 of unrecognized compensation cost related to unvested stock options, net of expected forfeitures, which is expected to be recognized over the following periods: 2015 - $330,619 and 2016 - $36,324. Stock-based compensation is included in general and administrative expense in the Consolidated Statements of Income.

The intrinsic value of the total options exercised for the years ended December 31, 2014, 2013 and 2012 was $465,000 or $15.51 per share; $1,084,000 or $19.71 per share, and $5,527,000 or $8.67 per share, respectively.

XML

Consolidated Statements Of Income (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Revenues:
Rental income	$ 166,279,000	$ 106,029,000	$ 81,482,000
Interest income from mortgage and other notes	7,013,000	7,633,000	7,426,000
Investment income and other	4,217,000	4,166,000	4,409,000
Revenues	177,509,000	117,828,000	93,317,000
Expenses:
Depreciation	38,078,000	20,101,000	14,772,000
Interest expense	26,372,000	9,229,000	3,492,000
Legal expense	209,000	784,000	766,000
Franchise, excise and other taxes	620,000	616,000	771,000
General and administrative	9,107,000	9,254,000	7,799,000
Loan and realty losses (recoveries), net	0	1,976,000	(2,195,000)
Total operating expenses	74,386,000	41,960,000	25,405,000
Income before equity-method investee, discontinued operations and noncontrolling interest	103,123,000	75,868,000	67,912,000
Income from equity-method investee	(71,000)	324,000	45,000
Investment and other gains	0	3,306,000	4,877,000
Income from continuing operations	103,052,000	79,498,000	72,834,000
Discontinued operations
Income from operations - discontinued	0	5,426,000	6,098,000
Gain on sale of real estate	0	22,258,000	11,966,000
Total discontinued operations	0	27,684,000	18,064,000
Net income	103,052,000	107,182,000	90,898,000
Less: net income attributable to noncontrolling interest	(1,443,000)	(999,000)	(167,000)
Net income attributable to common stockholders	$ 101,609,000	$ 106,183,000	$ 90,731,000
Weighted average common shares outstanding:
Basic	33,375,966	28,362,398	27,811,813
Diluted	33,416,014	28,397,702	27,838,720
Basic:
Income from continuing operations attributable to common stockholders	$ 3.04	$ 2.77	$ 2.61
Discontinued operations	$ 0.00	$ 0.97	$ 0.65
Net income per common share attributable to common stockholders	$ 3.04	$ 3.74	$ 3.26
Diluted:
Income from continuing operations attributable to common stockholders	$ 3.04	$ 2.77	$ 2.61
Discontinued operations	$ 0.00	$ 0.97	$ 0.65
Net income per common share attributable to common stockholders	$ 3.04	$ 3.74	$ 3.26

XML

Mortgage And Other Notes Receivable

12 Months Ended

Dec. 31, 2014

Financing Receivable, Net [Abstract]

Mortgage Notes Receivable

MORTGAGE AND OTHER NOTES RECEIVABLE

At December 31, 2014, we had investments in mortgage notes receivable with a carrying value of $34,850,000 secured by real estate and UCC liens on the personal property of 11 facilities and other notes receivable with a carrying value of $28,780,000 guaranteed by significant parties to the notes or by cross-collateralization of properties with the same owner. At December 31, 2013, we had investments in mortgage notes receivable with a carrying value of $34,926,000 and other notes receivable with a carrying value of $25,713,000. No allowance for doubtful accounts was considered necessary at December 31, 2014 or 2013.

In connection with the Senior Living acquisition, discussed in Note 2, we are providing a $15,000,000 revolving line of credit, the maturity of which will mirror the term of the master lease. Borrowings will be used to finance construction projects within the Senior Living Portfolio, including building additional units. Up to $5,000,000 of the facility may be used to meet general working capital needs. Amounts outstanding under the facility, $2,816,000 at December 31, 2014, bear interest at an annual rate equal to the 10-year U.S. Treasury rate, 2.17% at December 31, 2014, plus 6%.

In July 2013 we extended a $9,200,000 loan with our joint venture partner, Sycamore Street, LLC (“Sycamore”), an affiliate of Bickford to fund a portion of their acquisition of six senior housing communities consisting of 342 units. The loan is guaranteed by principals of Sycamore and has a two year maturity plus a one year extension option and 12% annual interest. Also, in June 2014 we entered into a $500,000 revolving loan to Sycamore, to fund pre-development expenses related to potential future projects. Interest is payable monthly at 10% and the note matures in August 2015. At December 31, 2014, this revolving loan was fully drawn. As a result of the June 2013 loan, PropCo acquired a $97,000,000 purchase option on the properties which is exercisable over the term of the loan.

These loans and the related purchase option constitute variable interests, and we have concluded that Sycamore meets the accounting criteria to be considered a VIE. However, because we do not control Sycamore, nor do we have any role in the day-to-day management, we are not the primary beneficiary of the entity, and we account for support given to Sycamore at historical cost. Sycamore is intended to be self-financing, and our direct support has been limited to the loans described herein and a $3,550,000 letter of credit for the benefit of Sycamore. Further, a decision to furnish additional direct support would be at our discretion and not obligatory. As a result, we believe our maximum exposure to loss at December 31, 2014, due to our investment in Sycamore, would be limited to the amount of our loans and letter of credit.

In September 2012 we evaluated the recoverability of mortgage notes receivable from SeniorTrust of Florida, Inc., a Tennessee non-profit organization. As a result of that evaluation, and a further assessment in March 2013, we recorded impairments of $2,300,000 and $4,037,000 in 2012 and 2013, respectively. In June 2013 we received full payment in satisfaction of the remaining balance of $15,000,000 on these notes.

In August 2013 the mortgage notes receivable due from ElderTrust of Florida, Inc. with an aggregate principal balance of $13,741,000 were applied to the purchase price of seven skilled nursing facilities in Massachusetts and New Hampshire. See Note 8 for more information on our transactions with SeniorTrust and ElderTrust.

In September 2013 we received $3,293,000 as full payment upon the final maturity of a mortgage note secured by a skilled nursing facility located in Georgia. Of the amount received, we recorded $2,061,000 as a recovery of a previous writedown.

In December 2012, we received from our current borrower a payment of $13,830,000 in full settlement of our note receivable secured by three skilled nursing facilities in Georgia formerly owned by Allgood Healthcare, Inc. The payment consisted of note principal of $4,650,000, accrued interest of $80,000, a recovery of a previous writedown of $4,495,000, and a note gain of $4,605,000. The recovery and gain are included in separate components of our income from continuing operations in our Consolidated Statements of Income. These facilities had previously been involved in bankruptcy proceedings with the former owner.

XML

Equity-Method Investment And Other Assets

12 Months Ended

Dec. 31, 2014

Equity Method Investments And Other Assets [Abstract]

Equity Method Investments And Other Assets Disclosure [Text Block]

EQUITY-METHOD INVESTMENT AND OTHER ASSETS

Our equity-method investment in OpCo and other assets consist of the following (in thousands):

	As of December 31,
	2014		2013
Equity-method investment in OpCo	$	9,424	$	9,494
Debt issuance costs	11,491		7,366
Accounts receivable and other assets	3,818		2,502
Replacement reserve and tax escrows	4,324		706
Lease escrow deposits	21,648		22,775
Escrow deposit for tax deferred exchange	—		23,813
	$	50,705	$	66,656

Upon the acquisition of our equity method investment in OpCo, in 2012, our purchase price was allocated to the assets acquired based upon their estimated relative fair values. Accounting guidance for equity method investments requires that we account for the difference between the cost basis of our investment in OpCo and our pro rata share of the amount of underlying equity in the net assets of OpCo as though OpCo were a consolidated subsidiary. Accordingly, the excess of the original purchase price over the fair value of identified tangible assets at acquisition of $8,986,000 is treated as implied goodwill and is subject to periodic review for impairment in conjunction with our equity method investment. When we acquired the Bickford properties in June 2013, an assignment was entered into whereby the operations of the 17 facilities were conveyed by an affiliate of Bickford to OpCo. The transaction mandated the effective cut-off of operating revenues and expenses and the settlement of operating assets and liabilities as of the acquisition date. Specified remaining net tangible assets were assigned to OpCo at the transferor's carryover basis resulting in an adjustment, through NHI's capital in excess of par value to our equity method investment in OpCo, of $817,000. We monitor and periodically review our equity method investment in OpCo for impairment to determine whether a decline, if any, in the value of the investment is other-than temporary. We noted no decline in value as of December 31, 2013.

OpCo is intended to be self-financing, and aside from initial investments therein, no direct support has been provided by NHI to OpCo since inception on September 30, 2012. While PropCo's rental revenues associated with the related properties are sourced from OpCo, a decision to furnish additional direct support would be at our discretion and not obligatory. As a result, we believe our maximum exposure to loss at December 31, 2014, due to our investment in OpCo, would be limited to our equity interest. We have concluded that OpCo meets the accounting criteria to be considered a VIE. However, because we do not control the entity, nor do we have any role in the day-to-day management, we are not the primary beneficiary of the entity, and we account for our investment using the equity method. There have been no distributions declared during the years ended December 31, 2014 and 2013.

At December 31, 2014, we held lease escrow deposits of $21,648,000 in regard to our lease with Holiday. The Holiday deposits include $21,275,000 as a lease security deposit which remains for the term of the 17-year lease which commenced in December 2013 and is payable to Holiday at the end of the lease term. The additional $374,000 represents net amounts reserved for specified capital improvements after reimbursements of $1,126,000 to Holiday.

Reserves for replacement, insurance and tax escrows include amounts required to be held on deposit in accordance with regulatory agreements governing our Fannie Mae and HUD mortgages.

In March 2014 we utilized $23,813,000 held with a qualified intermediary to provide a portion of the funding for the Prestige acquisition discussed in Note 2.

XML

Limits On Common Stock Ownership Limits On Common Stock Ownership

12 Months Ended

Dec. 31, 2014

Limits On Common Stock Ownership [Abstract]

Limits On Common Stock Ownership [Text Block]

LIMITS ON COMMON STOCK OWNERSHIP

The Company's charter contains certain provisions which are designed to ensure that the Company's status as a REIT is protected for federal income tax purposes. One of these provisions ensures that any transfer which would cause NHI to be beneficially owned by fewer than 100 persons or would cause NHI to be “closely held” under the Internal Revenue Code would be void which, subject to certain exceptions, results in no stockholder being allowed to own, either directly or indirectly pursuant to certain tax attribution rules, more than 9.9% of the Company's common stock. In 1991, the Board created an exception to this ownership limitation for Dr. Carl E. Adams, his spouse, Jennie Mae Adams, and their lineal descendants. Effective May 12, 2008, we entered into Excepted Holder Agreements with W. Andrew Adams and certain members of his family. These written agreements are intended to restate and replace the parties' prior verbal agreement. Based on the Excepted Holder Agreements currently outstanding, the ownership limit for all other stockholders is approximately 7.5%. Our charter gives our Board of Directors broad powers to prohibit and rescind any attempted transfer in violation of the ownership limits. These agreements were entered into in connection with the Company's stock purchase program pursuant to which the Company announced that it would purchase up to 1,000,000 shares of its common stock in the public market from its stockholders.

A separate agreement was entered into with each of the spouse and children of Dr. Carl E. Adams and others within Mr. W. Andrew Adams' family. We needed to enter into such an agreement with each family member because of the complicated ownership attribution rules under Internal Revenue Code. The Agreement permits the Excepted Holders to own common stock in excess of 9.9% up to the limit specifically provided in the individual agreement and not lose rights with respect to such shares. However, if the stockholder's stock ownership exceeds the limit then such shares in excess of the limit become “Excess Stock” and lose voting rights and entitlement to receive dividends. The Excess Stock classification remains in place until the stockholder no longer exceeds the threshold limit specified in the Agreement. The purpose of these agreements is to ensure that the Company does not violate the prohibition against a REIT being closely held. W. Andrew Adams' Excess Holder Agreement also provides that he will not own shares of stock in any tenant of the Company if such ownership would cause the Company to constructively own more than a 9.9% interest in such tenant. This prohibition is designed to protect the Company's status as a REIT for tax purposes.

XML

Discontinued Operations

12 Months Ended

Dec. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

DISCONTINUED OPERATIONS

We have reclassified, for periods before adoption of ASU 2014-08, the operations of facilities meeting the accounting criteria for properties sold or held for sale as discontinued operations.

In December 2013, we sold three older skilled nursing facilities to affiliates of our current tenant, Fundamental, for $18,500,000 and recorded a gain of $1,269,000 for financial statement purposes. Our lease revenue from these facilities was $3,316,000 and $3,231,000 for the years endedDecember 31, 2013 and 2012, respectively. Pursuant to the purchase option, rents associated with the two remaining properties will be fixed at $250,000 per month, without escalation, through the first renewal term in February 2016.

In October 2013, our tenant, Weatherly Associates, LLC, exercised their option to purchase a senior housing facility in Pennsylvania for $5,315,000. The sale was completed in December 2013, and we recorded a gain of $1,619,000 for financial statement purposes. Our lease revenue from the facility was $352,000 and $403,000 for the years endedDecember 31, 2013 and 2012, respectively.

In August 2013 we sold six older skilled nursing facilities to NHC for $21,000,000 and recorded a gain of $19,370,000 for financial statement purposes. Our lease revenue from the facilities was $2,294,000 and $3,368,000 for the years endedDecember 31, 2013 and 2012, respectively.

In December 2012, our tenant, Sunrise Senior Living, exercised its option to purchase our assisted living facility in Edison, New Jersey. Our lease revenue from the facility was $1,302,000 for the year endedDecember 31, 2012.

Income from discontinued operations is summarized below (in thousands):

	Year Ended December 31,
	2014		2013		2012
Revenues:
Rental income	$	—	$	5,962	$	8,304
Other income	—		21		3
Expenses:
Depreciation	—		557		2,209
Operating income	—		5,426		6,098
Gain on sale of real estate	—		22,258		11,966
Total discontinued operations	$	—	$	27,684	$	18,064
Weighted average common shares outstanding:
Basic	33,375,966		28,362,398		27,811,813
Diluted	33,416,014		28,397,702		27,838,720
Discontinued operations income per share:
Basic	$	—	$	.97	$	.65
Diluted	$	—	$	.97	$	.65

XML

Debt

12 Months Ended

Dec. 31, 2014

Debt Instruments [Abstract]

Debt Disclosure

DEBT

Debt consists of the following (in thousands):

	As of December 31,
	2014		2013
Convertible senior notes - unsecured (net of discount of $6,963)	$	193,037	$	—
Revolving credit facility - unsecured	374,000		167,000
Bank term loans - unsecured	250,000		370,000
HUD mortgage loans (net of discount of $1,662)	45,689		—
Fannie Mae term loans - secured (including premium of $1,756)	—		80,080
	$	862,726	$	617,080

In March 2014 we issued $200,000,000 of 3.25% senior unsecured convertible notes due April 2021 (the "Notes"). Interest is payable April 1st and October 1st of each year. The Notes are convertible at an initial conversion rate of 13.926 shares of common stock per $1,000 principal amount, representing a conversion price of approximately $71.81 per share for a total of approximately 2,785,200 underlying shares. The conversion rate is subject to adjustment upon the occurrence of certain events, as defined in the indenture governing the Notes, but will not be adjusted for any accrued and unpaid interest except in limited circumstances. The conversion option is considered an "optional net-share settlement conversion feature," meaning that upon conversion, NHI's conversion obligation may be satisfied, at our option, in cash, shares of common stock or a combination of cash and shares of common stock. Because the conversion price is in excess of the average stock price for the year, the impact of the conversion option is currently anti-dilutive to the earnings per share calculation and as such has no effect on our earnings per share.

The embedded conversion options (1) do not require net cash settlement, (2) are not conventionally convertible but can be classified in stockholders’ equity under ASC 815-40, and (3) are considered indexed to NHI’s own stock. Therefore, the conversion feature satisfies the conditions to qualify for an exception to the derivative liability rules, and the Notes are split into debt and equity components. The value of the debt component is based upon the estimated fair value of a similar debt instrument without the conversion feature at the time of issuance and was estimated to be approximately $$192,238,000. The $7,762,000 difference between the contractual principal on the debt and the value allocated to the debt was recorded as an equity component and represents the estimated value of the conversion feature of the instrument. The excess of the contractual principal amount of the debt over its estimated fair value, the original issue discount, is amortized to interest expense using the effective interest method over the estimated term of the Notes, projected to extend through October 2020, at issuance. The effective interest rate used to amortize the debt discount and the debt component of the issue costs for the Notes was approximately 3.9% based on our estimated non-convertible borrowing rate at the date the Notes were issued.

The total cost of issuing the Notes was $6,063,000, of which $5,788,000 was allocated to the debt component and is subject to amortization over the estimated term of the notes. The remaining $275,000 was allocated to the equity component.

In March 2014, we entered into an amended $700,000,000 senior unsecured credit facility. The facility can be expanded, subject to certain conditions, up to an additional $130,000,000. The amended credit facility provides for: (1) a $450,000,000 unsecured, revolving credit facility that matures in March 2019 (inclusive of an embedded 1-year extension option) with interest at 150 basis points over LIBOR; (2) a $130,000,000 unsecured term loan that matures in June 2020 with interest at 175 basis points over LIBOR; and (3) two existing term loans which remain in place totaling $120,000,000, maturing in June 2020 and bearing interest at 175 basis points over LIBOR. The employment of interest rate swaps for our fixed term debt leaves only our revolving credit facility exposed to variable rate risk. Our swaps and the financial instruments to which they relate are described in the table below, under the caption “Interest Rate Swap Agreements.”

At December 31, 2014, we had $76,000,000 available to draw on the revolving portion of the credit facility. The unused commitment fee is 40 basis points per annum. The unsecured credit facility requires that we maintain certain financial ratios within limits set by our creditors. To date, these ratios, which are calculated quarterly, have been within the limits required by the credit facility agreements.

On December 31, 2014, we paid off Fannie Mae mortgage loans with remaining principal balances of $70,131,000 and $7,136,000 using funds drawn from our revolving credit facility.

In July and September 2014 we obtained mortgage loans totaling $38,007,000 from the U.S. Department of Housing and Urban Development secured by nine properties in our joint venture with an affiliate of Bickford. The mortgage notes require monthly payments of principal and interest of 4.65% in the first year and 4.3% thereafter (inclusive of mortgage insurance premium) and mature in August and October 2049.

In October 2014 we assumed a HUD mortgage loan with an outstanding principal balance of $9,535,000 and an estimated fair value of $7,858,000. The HUD mortgage requires monthly payments of principal and interest of 2.9% (inclusive of mortgage insurance premium) and matures in October 2047.

The aggregate outstanding balance of our HUD mortgage loans as of December 31, 2014 was $47,352,000.

The following table summarizes interest expense (in thousands):

	Year Ended December 31,
	2014			2013			2012
Interest expense at contractual rates	$	23,878		$	8,944		$	3,380
Capitalized interest	(576		)	(378		)	(208		)
Amortization of debt premiums, discounts and issuance costs	2,580			247			320
Unamortized premium written off as a result of debt payoff	(1,655		)	—			—
Debt issuance costs expensed due to credit facility modifications	2,145			416			—
Total interest expense	$	26,372		$	9,229		$	3,492

Interest Rate Swap Agreements

We have entered into interest rate swap agreements to fix the interest rates on our bank term loans. The critical terms of this swap agreement are essentially identical to those of the term loans and thus, in accordance with ASC Topic 815 Derivative Instruments and Hedging Activities, the swap is considered a perfectly effective "cash flow hedge." Accordingly, changes in the fair value of this cash flow hedge are included in accumulated other comprehensive income rather than net income in our Consolidated Statements of Income. Gains and losses are reclassified from accumulated other comprehensive income into earnings once the underlying hedged transaction is recognized in earnings. If the fair value of the hedge is an asset, we include it in our Consolidated Balance Sheets in other assets, and, if a liability, as a component of accrued expenses.

Below is a summary of our swap agreements at December 31, 2014 (dollars in thousands):

Date Entered	Maturity Date	Fixed Rate	Rate Index	Notional Amount		Fair Value
May 2012	April 2019	3.29%	1-month LIBOR	$	40,000	$	(98	)
June 2013	June 2020	3.86%	1-month LIBOR	$	80,000	$	(1,814	)
March 2014	June 2020	3.91%	1-month LIBOR	$	130,000	$	(3,281	)

See Note 14 for fair value disclosures about our interest rate swap agreements.

XML

Share-Based Compensation (Schedule Of Stock Option Activity) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Options outstanding, January 1	516,674			509,422
Options outstanding, December 31	871,671		211,675	509,422
Options exercisable, December 31	644,990
Weighted Average Exercise Price, Options outstanding, January 1	$ 59.20			$ 42.03
Weighted Average Exercise Price, Options outstanding, December 31	$ 60.43		$ 46.60	$ 42.03
Weighted Average Exercise Price, Options exercisable, December 31	$ 59.79
Weighted Average Remaining Contractual Life (Years), Options outstanding, December 31	3 years 4 months 28 days
Weighted Average Remaining Contractual Life (Years), Options exercisable, December 31	3 years 2 months 29 days
Aggregate Intrinsic Value, Options outstanding, December 31	$ 8,308
Aggregate Intrinsic Value, Options exercisable, December 31	$ 6,559
2005 Plan [Member]
Options granted		360,000	340,000
Options exercised	(26,670)	(55,001)	(618,481)
Weighted Average Exercise Price, Options granted		$ 64.49	$ 47.52
Weighted Average Exercise Price, Options exercised	$ 47.52	$ 45.31	$ 43.63
2012 Plan [Member]
Options granted	400,000
Options exercised	(3,333)
Options forfeited	(15,000)
Weighted Average Exercise Price, Options granted	$ 61.31
Weighted Average Exercise Price, Options exercised	$ 61.31
Weighted Average Exercise Price, Options forfeited	$ 64.49
1997 Plan [Member]
Options exercised			(19,266)
Weighted Average Exercise Price, Options exercised			$ 33.26
Grant Date 2-22-2011 [Member]
Options outstanding, December 31	15,000
Weighted Average Exercise Price, Options outstanding, December 31	$ 45.58
Weighted Average Remaining Contractual Life (Years), Options outstanding, December 31	1 year 1 month 23 days
Grant Date 2-25-2011 [Member]
Options outstanding, December 31	33,336
Weighted Average Exercise Price, Options outstanding, December 31	$ 46.22
Weighted Average Remaining Contractual Life (Years), Options outstanding, December 31	1 year 1 month 26 days
Grant Date 2-21-2012 [Member]
Options outstanding, December 31	81,668
Weighted Average Exercise Price, Options outstanding, December 31	$ 47.52
Weighted Average Remaining Contractual Life (Years), Options outstanding, December 31	2 years 1 month 23 days
Grant Date 2-25-2013 [Member]
Options outstanding, December 31	345,000
Weighted Average Exercise Price, Options outstanding, December 31	$ 64.49
Weighted Average Remaining Contractual Life (Years), Options outstanding, December 31	3 years 1 month 27 days
Grant Date 2-25-2014 [Member]
Options outstanding, December 31	396,667
Weighted Average Exercise Price, Options outstanding, December 31	$ 61.31
Weighted Average Remaining Contractual Life (Years), Options outstanding, December 31	4 years 1 month 27 days

XML

Investment In Preferred Stock, At Cost

12 Months Ended

Dec. 31, 2014

Investment In Preferred Stock, At Cost [Abstract]

Investment In Preferred Stock, At Cost

INVESTMENT IN PREFERRED STOCK, AT COST

We received $3,273,000 in preferred dividends from LTC (a publicly-traded REIT) for each of the years ended December 31, 2014, 2013 and 2012, on our investment in 2,000,000 shares of their cumulative preferred stock carried at its original cost of $38,132,000. The preferred stock, which was purchased in September 1998, is not listed on a stock exchange, is considered a non-marketable security and is recorded at cost in our Consolidated Balance Sheets. The non-voting preferred stock is convertible into 2,000,000 shares of LTC common stock whose closing price at December 31, 2014 was $43.17 per share. The preferred stock has an annual cumulative coupon rate of 8.5% payable quarterly and a liquidation preference of $19.25 per share. While not the fair value of our preferred stock investment, we provide the above information as pertinent to the reader's estimation of the fair value of our investment. In accordance with ASC Topic 825 Financial Instruments, paragraph 10-50 Disclosure-Overall, we have determined that due to excessive costs, it is not practicable to estimate the fair value of our cost basis investment in preferred stock because of inherent subjectivities in refining the estimate to a degree that is likely to materially augment the information provided above. Further, we have identified no events that may have had an adverse effect on its fair value which would have required revisiting the instrument's carrying value.

XML

Investments In Marketable Securities

12 Months Ended

Dec. 31, 2014

Marketable Securities [Abstract]

Investments In Marketable Securities [Text Block]

INVESTMENTS IN MARKETABLE SECURITIES

Our investments in marketable securities include available-for-sale securities which are reported at fair value. Unrealized gains and losses on available-for-sale securities are presented as a component of accumulated other comprehensive income. Realized gains and losses from securities sales are determined based upon specific identification of the securities.

Marketable securities consist of the following (in thousands):

	December 31, 2014				December 31, 2013
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Common stock of other healthcare REITs	$	4,088	$	15,503	$	4,088	$	12,650

Gross unrealized gains related to available-for-sale securities were $11,415,000 at December 31, 2014 and $8,562,000 at December 31, 2013.

During 2014, 2013 and 2012 we recognized $716,000, $667,000, and $628,000, respectively, of dividend income from our marketable securities and have included these amounts in investment income and other in the Consolidated Statements of Income.

XML

Commitments And Contingencies

12 Months Ended

Dec. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingencies

COMMITMENTS AND CONTINGENCIES

Bickford

During the quarter ended December 31, 2014, our consolidated subsidiary, PropCo, completed major construction and received certificates of occupancy on one assisted living facility which had been under development. Our costs incurred to date, including land, were $7,811,000. In February 2014 we entered into a commitment of $2,785,000 on a letter of credit for the benefit of our joint venture partner, Sycamore, an affiliate of Bickford, which holds a minority interest in PropCo. In December 2014 we increased the amount of our commitment on the letter of credit to $3,550,000.

In June 2014 we entered into a $500,000 revolving loan with Sycamore to fund pre-development expenses related to potential future projects. Interest is payable monthly at 10% and the note matures in August 2015. At December 31, 2014 the revolving loan was fully drawn.

Chancellor

In October 2013, we entered into a $7,500,000 commitment to build a 46-unit free-standing assisted living and memory care community, expanding our Linda Valley senior living campus in Loma Linda, California. We began construction 2014 and had funded $4,231,000 as of December 31, 2014. The initial lease term is for 15 years at an annual rate of 9% plus a fixed annual escalator. We also committed to provide up to $500,000 for renovations and improvements related to our recent acquisition of a 63-unit senior housing community in Baltimore, Maryland which we have leased to Chancellor Health Care. We began renovations in 2014 and as of December 31, 2014 had funded $353,000. We receive rent income on funds advanced for both construction projects.

Discovery

As a lease inducement, we have a contingent commitment to fund a series of payments up to $2,500,000 in connection with our September 2013 lease to Discovery of a senior living campus in Rainbow City, Alabama. Discovery would earn the contingent payments upon obtaining, and maintaining, a specified lease coverage ratio. As earned, the payments would be due in installments of $750,000 in each of years two and three of the lease with the residual due in year four. As of December 31, 2014, incurring the contingent payments was not considered probable. Accordingly, no provision for these payments is reflected in the consolidated financial statements.

Fundamental

In April 2013, we completed the purchase of two skilled nursing facilities located in Canton and Corinth, Texas for a purchase price of $26,150,000 in cash, plus consideration related to the Corinth facility of $1,600,000 conditional upon meeting future performance measures. In March 2014 upon satisfactory achievement of the required operating metrics, we made the full $1,600,000 payment to Fundamental.

Helix Healthcare

In March 2010, we completed a purchase/leaseback transaction with Helix Healthcare (“Helix”) for $12,500,000. The purchase price includes a conditional payment of $1,000,000. In December 2014 we made the full $1,000,000 payment to Helix.

Holiday Retirement

In connection with our December 2013 purchase/leaseback of 25 independent living facilities from Holiday Retirement, we we collected escrow deposits of $1,500,000 for capital improvements to the acquired facilities. As of December 31, 2014, we had funded $1,126,000 toward this commitment.

Kentucky River

In March 2012, we entered into a construction commitment to Jackson Hospital Corporation, an affiliate of Community Health Systems, to provide up to $8,000,000 for extensive renovations and additions to our Kentucky River Medical Center, a general acute care hospital in Jackson, Kentucky. This investment will be added to the basis on which the lease amount is calculated. The construction project commenced during the first quarter of 2013 and is expected to be completed in 2015. Total construction costs incurred as of December 31, 2014 were $7,583,000.

Prestige

We have agreed to fund capital improvements of up to $2,000,000 in connection with two of the facilities we lease to Prestige. The capital improvements will be an addition to our original investment in the properties when funded and will be included in the lease base. As of December 31, 2014, we had funded $1,555,000 of this commitment. Additionally, we have committed to fund contingent earn out payments up to a maximum of $6,390,000 based on the achievement of certain financial metrics as measured periodically through December 31, 2015. At acquisition, we estimated probable contingent payments of $3,000,000 to be likely and have reflected that amount in the consolidated financial statements. Contingent payments earned will be included in the lease base when funded.

Santé

We have a $2,000,000 loan commitment to our borrower, Santé Partners, LLC (“Santé”). This additional loan amount becomes available to the borrower when the 70-bed transitional rehabilitation hospital, completed in March 2011, achieves certain operating metrics. NHI also has the option to purchase and lease back the hospital when it achieves a predetermined level of stabilized net operating income.

We are committed to fund a $3,500,000 expansion and renovation program at our Silverdale, Washington senior living campus and as of December 31, 2014 had funded $2,621,000, which was added to the basis on which the lease amount is calculated. In connection with our Silverdale, Washington senior living campus, we have a contingent commitment to fund two lease inducement payments of $1,000,000 each. Santé would earn the payments upon attaining and sustaining a specified lease coverage ratio. If earned, the first payment would be due after the second lease year and the second payment would be due after the third lease year. At acquisition, incurring the contingent payments was not considered probable. Accordingly, no provision for these payments is reflected in the consolidated financial statements.

Senior Living Communities

In connection with the Senior Living acquisition, we are providing a $15,000,000 revolving line of credit to Senior Living, the maturity of which will mirror the term of the master lease. Borrowings will be used to finance construction projects within the Senior Living Portfolio, including building additional units. Up to $5,000,000 of the facility may be used to meet general working capital needs. Amounts outstanding under the facility, $2,816,000 at December 31, 2014, bear interest at an annual rate equal to the 10-year U.S. Treasury rate, 2.17% at December 31, 2014, plus 6%.

Senior Living Management

In September 2014 we entered into an agreement with our current tenant, Senior Living Management, to fund up to $700,000 for renovations to our Greensboro, Georgia assisted living facility. When the renovations are complete, the total amount will be added to the lease base. As of December 31, 2014, $13,000 of this commitment had been funded.

Litigation

Our facilities are subject to claims and suits in the ordinary course of business. Our lessees and borrowers have indemnified, and are obligated to continue to indemnify us, against all liabilities arising from the operation of the facilities, and are further obligated to indemnify us against environmental or title problems affecting the real estate underlying such facilities. While there may be lawsuits pending against certain of the owners and/or lessees of the facilities, management believes that the ultimate resolution of all such pending proceedings will have no material adverse effect on our financial condition, results of operations or cash flows.

As previously disclosed, in November 2008, the Company was served with a Civil Investigative Demand by the Office of the Tennessee Attorney General (“OTAG”), which indicated that the OTAG was investigating transactions between the Company and three Tennessee not-for-profit corporations. NHI has provided the OTAG with requested information and documents and has been working with the OTAG with respect to this investigation. The investigation with respect to one of the not-for-profit corporations was settled in 2009. A receiver had been appointed for the two remaining not-for-profit corporations, SeniorTrust of Florida, Inc. ("SeniorTrust") and ElderTrust of Florida, Inc ("ElderTrust"). As previously disclosed, the receiver of SeniorTrust and ElderTrust had caused those entities to bring lawsuits against NHI and NHC.

In April 2013, NHI, NHC and the receiver for ElderTrust and SeniorTrust entered into a settlement agreement resolving all remaining issues. The settlement agreement also resolved the OTAG investigation and was approved by the Court on May 3, 2013. Thus, the investigation has now been resolved with respect to all three of the not-for-profit corporations. The settlement agreement provided that SeniorTrust pay NHI $15,000,000 in cash in full settlement of the notes receivable between NHI and SeniorTrust, which payment was made on June 27, 2013.

The settlement agreement also provided that NHI purchase ElderTrust's seven skilled nursing facilities in Massachusetts and New Hampshire. As consideration for the purchase from ElderTrust, NHI canceled a note receivable from ElderTrust with a principal balance of $13,741,000 and paid cash in the amount of $23,676,000, inclusive of closing costs. As discussed in further detail at Note 2, the purchase was completed on August 30, 2013. NHI has leased these facilities to NHC, the current operator.

XML

Discontinued Operations (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014 properties	Dec. 31, 2013	Dec. 31, 2012	Oct. 31, 2013	Aug. 31, 2013 properties	Sep. 30, 2014 properties
Number of Real Estate Properties	172
Gain on sale of real estate	$ 0	$ 22,258,000	$ 11,966,000
Fundamental Long Term Care Holdings [Member]
Number of Real Estate Properties		3
Asset Sold, Selling Price		18,500,000
Gain on sale of real estate		1,269,000
Disposal Group, Including Discontinued Operation, Revenue		3,316,000
Weatherly Associates [Member]
Asset Sold, Selling Price				5,315,000
Gain on sale of real estate		1,619,000
Disposal Group, Including Discontinued Operation, Revenue		352,000
National Healthcare Corporation [Member]
Number of Real Estate Properties					6
Asset Sold, Selling Price					21,000,000
Disposal Group, Including Discontinued Operation, Revenue		2,294,000
Weatherly Associates [Member]
Disposal Group, Including Discontinued Operation, Revenue			403,000
Fundamental Long Term Care Holdings [Member]
Number of Real Estate Properties	2					2
Disposal Group, Including Discontinued Operation, Revenue			3,231,000
Expected Annual Rental Income	250,000
Sunrise Senior Living [Member]
Disposal Group, Including Discontinued Operation, Revenue			1,302,000
National Healthcare Corporation [Member]
Number of Real Estate Properties	42
Assets Held-for-sale [Member] | National Healthcare Corporation [Member]
Gain on sale of real estate		19,370,000
Disposal Group, Including Discontinued Operation, Revenue			$ 3,368,000

XML

Income Taxes Income Taxes (Schedule of Dividends Paid, Per Share) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Common Stock, Dividends, Per Share, Cash Paid	$ 3.08	$ 3.12	$ 2.64
Ordinary Income [Member]
Common Stock, Dividends, Per Share, Cash Paid	$ 2.535481	$ 2.85895	$ 2.62870
Capital Gain [Member]
Common Stock, Dividends, Per Share, Cash Paid	$ 0	$ 0.16493	$ 0.01130
Return of Capital [Member]
Common Stock, Dividends, Per Share, Cash Paid	$ 0.544519	$ 0.09612	$ 0

XML

Discontinued Operations (Schedule Of Income From Discontinued Operations) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Revenues [Abstract]
Rental income									$ 0	$ 5,962	$ 8,304
Other income									0	21	3
Expenses [Abstract]
Depreciation									0	557	2,209
Operating income									0	5,426	6,098
Gain on sale of real estate									0	22,258	11,966
Total discontinued operations									$ 0	$ 27,684	$ 18,064
Basic	34,343,706	33,055,992	33,052,750	33,051,415	29,831,176	27,876,176	27,876,176	27,876,176	33,375,966	28,362,398	27,811,813
Diluted	34,402,969	33,088,570	33,087,283	33,085,232	29,860,614	27,905,545	27,913,727	27,911,584	33,416,014	28,397,702	27,838,720
Basic	$ 0.00	$ 0.00	$ 0.00	$ 0.00	$ 0.12	$ 0.74	$ 0.06	$ 0.06	$ 0.00	$ 0.97	$ 0.65
Discontinued operations per common share	$ 0.00	$ 0.00	$ 0.00	$ 0.00	$ 0.12	$ 0.74	$ 0.06	$ 0.06	$ 0.00	$ 0.97	$ 0.65

XML

Investment And Other Gains Investment And Other Gains (Tables)

12 Months Ended

Dec. 31, 2014

Investment And Other Gains [Abstract]

Schedule of Investment And Other Gains [Table Text Block]

The following table summarizes our investment and other gains (in thousands):

	Year Ended December 31,
	2014		2013		2012
Gain on payoff of mortgage note receivable	$	—	$	—	$	4,605
Gains on sales of marketable securities	—		—		30
Gain on purchase liability settlement	—		3,256		—
Other gains	—		50		242
	$	—	$	3,306	$	4,877

XML

Investments In Marketable Securities (Schedule Of Marketable Securities) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Marketable Securities [Abstract]
Available-for-sale Securities, Amortized Cost Basis	$ 4,088	$ 4,088
Available-for-sale Securities, Equity Securities	$ 15,503	$ 12,650

XML

Income Taxes Income Taxes

12 Months Ended

Dec. 31, 2014

Income Taxes [Abstract]

Income Tax Disclosure [Text Block]

INCOME TAXES

Beginning with our inception in 1991, we have elected to be taxed as a REIT under the Internal Revenue Code (the "Code"). We have elected that our subsidiary established on September 30, 2012 in connection with the Bickford arrangement (which holds our ownership interest in an operating company) be taxed as a taxable REIT subsidiary ("TRS") under provisions of the Code. The TRS is subject to federal and state income taxes like those applicable to regular corporations. Aside from such income taxes which may be applicable to the taxable income in the TRS, we will not be subject to federal income tax provided that we continue to qualify as a REIT and make distributions to stockholders equal to or in excess of our taxable income.

Per share dividend payments to common stockholders for the last three years are characterized for tax purposes as follows:

(Unaudited)	2014		2013		2012
Ordinary income	$	2.53548	$	2.85895	$	2.6287
Capital gain	—		0.16493		0.0113
Return of capital	0.54452		0.09612		—
Dividends paid per common share	$	3.08	$	3.12	$	2.64

Our consolidated provision for state and federal income tax for the years ended 2014, 2013, and 2012 was $133,000, $267,000, and $137,000, respectively. For the years ended 2014, 2013, and 2012 we had no material deferred state or federal income tax.

All of our current taxes for 2014 relates to a franchise tax levied by the state of Texas that has attributes of an income tax. For 2013, tax expense of $128,000 relates to our equity interest in the unconsolidated operating company whose interest is owned by our TRS described above, and $139,000 relates to the Texas franchise tax. The tax expense for 2012 relates entirely to such tax levied in Texas. Our income taxes described above are combined in franchise, excise and other taxes in our Consolidated Statements of Income.

We made state income tax payments of $139,000, $129,000,and $96,000 for the years ended December 31, 2014, 2013, and 2012, respectively.

XML

Schedule II - Valuation and Qualifying Accounts Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2014

Schedule II - Valuation and Qualifying Accounts [Abstract]

Schedule of Valuation and Qualifying Accounts Disclosure [Text Block]

NATIONAL HEALTH INVESTORS, INC.

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2013, AND 2012

(in thousands)

	Balance		Additions
	Beginning		Charged to Costs				Balance
	of Period		and Expenses1		Deductions		End of Period
For the year ended December 31, 2014
Loan loss allowance	$	—	$	—	$	—	$	—
For the year ended December 31, 2013
Loan loss allowance	$	—	$	—	$	—	$	—
For the year ended December 31, 2012
Loan loss allowance	$	—	$	—	$	—	$	—

¹ In the Consolidated Statements of Income, we report the net amount of our provision for loan and realty losses and our recoveries of amounts previously written down. For 2013, net losses were $1,976,000, consisting of a $4,037,000 note impairment and a $2,061,000 recovery and there was no provision for losses during the year. For 2012, net recoveries were 2,195,000, consisting of a $4,495,000 recovery and a $2,300,000 note impairment and there was no provision for losses during the year.

XML

Mortgage And Other Notes Receivable (Details) (USD $)	12 Months Ended
	Dec. 31, 2014 properties	Dec. 31, 2013	Dec. 31, 2012 properties	Jul. 31, 2013 properties	Jun. 30, 2013	Aug. 30, 2013 properties	Sep. 30, 2013
Mortgage and other notes receivable, net	$ 63,630,000	$ 60,639,000
Number of health care properties related to mortgage notes receivables	11
Loans Receivable, Description of Variable Rate Basis	.0217
Allowance for Doubtful Accounts Receivable	0	0
Mortgage Loans On Real Estate, Impairment	0	4,037,000	2,300,000
Number of Real Estate Properties	172
Loan and realty (recoveries) losses, net		2,061,000	4,495,000
Number of Real Estate Properties, Mortgage Security			3
Senior Living Communities [Member]
Loans and Lease Receivable, Maximum Revolving Amount	15,000,000
Revolving Note Receivable, Maximum Amount Available for Working Capital Purposes	5,000,000
Revolving Note Receivable, Amount Outstanding	2,816,000
Loans Receivable, Basis Spread on Variable Rate	6.00%
Bickford Note Investment [Member]
Mortgage and other notes receivable, net				9,200,000
Number of health care properties related to mortgage notes receivables				6
Loan Term	2 years 0 months 0 days
Note Receivable, Renewal Term	1 year 0 months 0 days
Loans and Lease Receivable, Maximum Revolving Amount	500,000
Note Receivable Interest Rate	10.00%			12.00%
Purchase Option Amount				97,000,000
Number of Units in Real Estate Property				342
SeniorTrust [Member]
Mortgage and other notes receivable, net					15,000,000
Elder Trust [Member]
Significant Acquisition, Cost, Receivable Cancelled						13,741,000
Number of Real Estate Properties						7
Georgia SNF Payoff [Member]
Mortgage and other notes receivable, net							3,293,000
Loan and realty (recoveries) losses, net		2,061,000
Proceeds from Sale and Collection of Notes Receivable			13,830,000
Secured By Real Estate [Member]
Mortgage and other notes receivable, net	34,850,000	34,926,000
Not Secured By Real Estate [Member]
Mortgage and other notes receivable, net	28,780,000	25,713,000
Mortgage Note Principal [Member] | Georgia SNF Payoff [Member]
Proceeds from Sale and Collection of Notes Receivable			4,650,000
Accrued Interest Due [Member] | Georgia SNF Payoff [Member]
Proceeds from Sale and Collection of Notes Receivable			80,000
Recovery Of Other Than Temporary Impairment [Member] | Georgia SNF Payoff [Member]
Proceeds from Sale and Collection of Notes Receivable			4,495,000
Gain On Payoff Of Note Receivable [Member] | Georgia SNF Payoff [Member]
Proceeds from Sale and Collection of Notes Receivable			$ 4,605,000

XML

Significant Accounting Policies (Details)	12 Months Ended
	Dec. 31, 2014
Property, Plant and Equipment, Useful Life	40 years 0 months 0 days
Building [Member]
Property, Plant and Equipment, Useful Life	40 years
Minimum [Member] | Building Improvements [Member]
Property, Plant and Equipment, Useful Life	3 years
Maximum [Member] | Building Improvements [Member]
Property, Plant and Equipment, Useful Life	25 years

XML

Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Statement of Comprehensive Income [Abstract]
Net income	$ 103,052	$ 107,182	$ 90,898
Other comprehensive income (loss):
Change in unrealized gains on securities	2,853	(234)	1,645
Less: reclassification adjustment for gains in net income	0	0	(30)
Increase (decrease) in fair value of cash flow hedge	(2,032)	3,563	(1,017)
Less: reclassification adjustment for amounts recognized in net income	(4,136)	(1,346)	(224)
Total other comprehensive income (loss)	(3,315)	1,983	374
Comprehensive income	99,737	109,165	91,272
Less: comprehensive income attributable to noncontrolling interest	(1,443)	(999)	(167)
Net Income (Loss) Attributable to Noncontrolling Interest	1,443	999	167
Comprehensive income attributable to common stockholders	$ 98,294	$ 108,166	$ 91,105

XML

Real Estate

12 Months Ended

Dec. 31, 2014

Real Estate [Abstract]

Real Estate Disclosure [Text Block]

REAL ESTATE

As of December 31, 2014, we owned 172 health care real estate properties located in 31 states and consisting of 103 senior housing communities, 64 skilled nursing facilities, 3 hospitals and 2 medical office buildings. Our senior housing properties include assisted living facilities, senior living campuses, independent living facilities, and entrance-fee communities. These investments (excluding our corporate office of $900,000) consisted of properties with an original cost of approximately $1,987,949,000, rented under triple-net leases to 24 lessees.

Acquisitions and New Leases of Real Estate

During the year endedDecember 31, 2014, we made the following real estate investments and commitments as described below (dollars in thousands):

Operator	Properties	Asset Class	Amount
Senior Living Communities	8	SHO	$	476,000
Bickford Senior Living	1	SHO	16,488
Prestige Senior Living	4	3 SNF & 1 SHO	45,115
Chancellor Health Care	2	SHO	17,150
Senior Living Management	1	SHO	700
			$	555,453

Senior Living Communities

On December 17, 2014, we acquired, from Senior Living Communities, LLC (“Senior Living”), a portfolio of eight retirement communities (the “Senior Living Portfolio”) with a total of 1,671 units, for a cash purchase price of $476,000,000 from Health Care REIT, Inc. and certain of its affiliates.

Because the Senior Living Portfolio was previously leased by Health Care REIT, Inc., we accounted for acquisition of the 100% interest in the Senior Living Portfolio using the acquisition method as prescribed by FASB Accounting Standards Codification ("ASC") Topic 805, Business Combinations. As part of this transaction, we recognized all identifiable tangible assets at fair value on the date of acquisition (there were no identifiable intangible assets or liabilities assumed) and attributed $32,410,000 of the purchase price to fair value of the land, $443,590,000 to the fair value of building and improvements and expensed $89,000 in transaction costs at closing.

We have leased the Senior Living Portfolio under a triple-net master lease with an affiliate of Senior Living which will continue to manage the facilities. The 15-year master lease contains two 5-year renewal options and provides for initial cash rent of $31,000,000, subject to annual escalators of 4% in years two through four and 3% thereafter. In accordance with the lease agreement, Senior Living has funded a $10,000,000 escrow which serves as security for Senior Living's performance under the master lease.

For the eight Senior Living properties acquired in a business combination and discussed above, the unaudited pro forma revenue, net income and net income available to common stockholders of the combined entity is provided below as if the acquisition date had been January 1, 2013 (in thousands except per share amounts):

	2014		2013
Revenue	$	215,398	$	157,250
Net income	$	119,929	$	125,460
Net income available to common stockholders	$	118,486	$	124,461
Basic earnings per common share	$	3.16	$	3.80
Diluted earnings per common share	$	3.16	$	3.79

Supplemental pro forma information above includes revenues from the newly executed Senior Living lease recognized on a straight-line basis, depreciation, and appropriate interest costs.

For the year ended December 31, 2014, we had recorded $1,533,000 in lease revenue and had net earnings of $1,403,000 from this acquisition.

Prestige

In March 2014 we completed a $40,115,000 purchase of 3 skilled nursing facilities in Oregon totaling 196 beds and a 105-unit assisted living facility in Idaho from Prestige Senior Living ("Prestige"). We have a commitment to fund contingent earn-out payments up to a maximum of $6,390,000 based on the achievement of certain financial metrics as measured periodically through December 31, 2015. Because the facilities were owner-occupied, we accounted for the acquisition as an asset purchase. At acquisition, we estimated probable contingent payments of $3,000,000 to be likely and have, accordingly, reflected that amount in the Consolidated Balance Sheet. Contingent payments earned will be an addition to the lease base when funded.

We have leased the 4 facilities to Prestige with a 15-year term at an initial rate of 8.4% plus fixed annual escalators. In addition, at two of the Oregon facilities we have committed to invest $2,000,000 for capital improvements which are expected to be completed by June 30, 2015. This investment will be added to the basis on which the lease amount is calculated.

Chancellor

On September 30, 2014, we completed a $5,650,000 acquisition of a 25-unit assisted living facility in Milwaukie, Oregon and leased the facility to Chancellor Health Care, LLC ("Chancellor") for an initial term of 15 years with two10-year renewal options. The initial lease rate is 8.0% with fixed annual escalators. Because the facility was owner-occupied, we accounted for the acquisition as an asset purchase.

In June 2014 we acquired a 56-unit assisted living/memory care facility in Sacramento, California for $11,500,000 and leased the facility to Chancellor for an initial term of 15 years, plus renewal options. The initial lease rate is 8.0% with fixed annual escalators. Because the facility was owner-occupied, we accounted for the acquisition as an asset purchase.

Bickford

As of December 31, 2014, we owned an 85% equity interest and an affiliate of Bickford, Sycamore Street, LLC ("Sycamore") owned a 15% equity interest in our consolidated subsidiary ("PropCo") which owns 31 assisted living/memory care facilities. The facilities are leased to an operating company, ("OpCo"), in which we retain a non-controlling 85% ownership interest. Our joint venture is structured to comply with the provisions of RIDEA.

On October 31, 2014, our subsidiary, PropCo, acquired a 101-unit assisted living facility located in Middletown, Ohio for $16,488,000, including $65,000 in transaction costs and assumption of secured debt at an interest rate of 2.9% with an outstanding principal balance of $9,535,000 and an estimated fair value of $7,858,000. The facility was leased to OpCo under an existing master lease and provides for fixed annual escalators. Because the facility was owner-occupied, the acquisition was accounted for as an asset purchase.

The current annual contractual rent from OpCo to PropCo, excluding the development properties, is $22,595,000, plus fixed annual escalators. During the quarter ended December 31, 2014, PropCo completed major construction and received a certificate of occupancy on an assisted living facility which had been under development. OpCo is continuing the lease-up of 3 facilities, 2 of which opened in the fourth quarter of 2013. Once the facilities stabilize, an annual rental amount will be determined between the parties. Under the terms of the current development lease agreement, PropCo receives rent of 9% on the total amount of development costs, including land, which totaled $7,811,000 at December 31, 2014. NHI has an exclusive right to Bickford's future acquisitions, development projects and refinancing transactions.

Of our total revenue from continuing operations, $21,421,000 (12%), $14,586,000 (12%) and $5,164,000 (6%) were recorded as rental income from Bickford for the years ended December 31, 2014, 2013, and 2012, respectively.

On February 5, 2015, we announced a new development program pursuant to which our RIDEA joint venture with Bickford will develop five senior housing communities in Illinois and Virginia. Construction is slated to start in early 2015 with openings planned for 2016. The total estimated project cost is $55,000,000. Each community will consist of 60 private-pay assisted living and memory care units managed by Bickford Senior Living.

Holiday

In December 2013 we acquired 25 independent living facilities from Holiday, an affiliate of Holiday Retirement. We have leased this portfolio to NH Master Tenant, LLC, a subsidiary of Holiday. Our tenant continues to operate the facilities pursuant to a management agreement with a Holiday-affiliated manager. The master lease term of 17 years began in December 2013 and provides for initial base rent of $31,915,000 plus annual escalators of 4.5% in the first 3 years and a minimum of 3.5% each year thereafter.

Of our total revenue from continuing operations, $43,817,000 (25%) was recorded as rental income from Holiday for the year endedDecember 31, 2014.

NHC

As of December 31, 2014, we leased 42 health care facilities under two master leases to NHC, a publicly-held company and the lessee of our legacy properties. The facilities leased to NHC consist of 3 independent living facilities and 39 skilled nursing facilities (4 of which are subleased to other parties for whom the lease payments are guaranteed to us by NHC). These facilities are leased to NHC under the terms an amended Master Lease Agreement dated October 17, 1991 ("the 1991 lease") which includes our 35 remaining legacy properties and a Master Lease Agreement dated August 30, 2013 ("the 2013 lease"), discussed below, which includes seven skilled nursing facilities acquired from ElderTrust on August 31, 2013.

The 1991 lease has been amended to extend the lease expiration to December 31, 2026. There are two additional 5-year renewal options, each at fair rental value of such leased property as negotiated between the parties and determined without including the value attributable to any improvements to the leased property voluntarily made by NHC at its expense. Under the terms of the 1991 lease, the base annual rental is $30,750,000 and rent escalates by 4% of the increase, if any, in each facility's revenue over a 2007 base year. The 2013 lease provides for a base annual rental of $3,450,000 and has a lease expiration of August 2028. Under the terms of the 2013 lease, rent escalates 4% of the increase in each facility's revenue over the 2014 base year. For both the 1991 lease and the 2013 lease, we refer to this additional rent component as “percentage rent.” During the last three years of the 2013 lease, NHC will have the option to purchase the facilities for $49,000,000.

The following table summarizes the percentage rent received and recognized from NHC (in thousands):

	Year Ended December 31,
	2014		2013		2012
Current year	$	2,292	$	2,275	$	1,530
Prior year final certification1	15		746		997
Total percentage rent	$	2,307	$	3,021	$	2,527

¹ For purposes of the percentage rent calculation described in the Master Lease Agreement, NHC’s annual revenue by facility for a given year is certified to NHI by March 31st of the following year.

Of our total revenue from continuing operations, $36,446,000 (21%), $34,756,000 (29%) and $33,056,000 (35%) in 2014, 2013 and 2012, respectively, were derived from NHC.

Senior Living Management

In September 2014 we entered into an agreement with our current tenant, Senior Living Management, to fund up to $700,000 in renovations to our Greensboro, Georgia assisted living facility. When the renovations are complete, the total amount will be added to the lease base. As of December 31, 2014, $13,000 had been funded.

In February 2015, we transitioned the lease of four assisted living facilities in Louisiana to our tenant, Senior Living Management. The termination of the prior lease resulted in a write-off for accounting purposes during 2014 of $932,000 in straight-line rent receivable. The scheduled lease payments are the same as in the former lease. The current lease has an initial term of 15 years plus fixed annual escalators after the first year. In addition, we agreed to fund up to $280,000 in renovations and improvements which will be added to the lease basis used to determine monthly rent.

Future Minimum Lease Payments

At December 31, 2014, the future minimum lease payments (excluding percentage rent) to be received by us under our operating leases with our tenants are as follows (in thousands):

2015	$	182,195
2016	183,255
2017	183,353
2018	172,155
2019	167,924
Thereafter	1,531,958
	$	2,420,840

XML

Investment And Other Gains Investment And Other Gains (Schedule of Investment And Other Gains) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Investment And Other Gains [Abstract]
Gain on payoff of mortgage note receivable	$ 0	$ 0	$ 4,605
Gains on sales of marketable securities	0	0	30
Gain on purchase liability settlement	0	3,256	0
Other gains	0	50	242
Investment and other gains	$ 0	$ 3,306	$ 4,877

XML

Fair Value of Financial Instruments (Liabilities Measured on a Recurring Basis, Unobservable Input Reconciliation) (Details) (USD $)	9 Months Ended		12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3			$ 0	$ 0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in Earnings			0	0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Purchases, (Sales), Issuances, (Settlements)			400,000	1,656,000
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Earnings	0	0
Fair Value, Inputs, Level 3 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Business Combination, Contingent Consideration, Liability, Period Start					4,256,000
Business Combination, Contingent Consideration, Liability, Period End			$ 3,000,000	$ 2,600,000	$ 4,256,000

XML

Schedule III - Real Estate and Accumulated Depreciation Schedule III - Real Estate and Accumulated Depreciation

12 Months Ended

Dec. 31, 2014

Schedule III - Real Estate and Accumulated Depreciation [Abstract]

Schedule III - Real Estate and Accumulated Depreciation [Text Block]

NATIONAL HEALTH INVESTORS, INC.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2014
(in thousands)
							Costs		Gross Amount at Which
			Initial Cost to Company				Capitalized		Carried at Close of Period								Date
					Buildings &		Subsequent to				Buildings &				Accumulated		Acquired/
	Encumbrances		Land		Improvements		Acquisition		Land		Improvements		Total		Depreciation		Constructed
Skilled Nursing Facilities
Anniston, AL	$	—	$	70	$	4,477	$	—	$	70	$	4,477	$	4,547	$	3,206	10/17/1991
Moulton, AL	—		25		688		—		25		$	688	713		688		10/17/1991
Avondale, AZ	—		453		6,678		—		453		$	6,678	7,131		3,241		8/13/1996
Brooksville, FL	—		1,217		16,166		—		1,217		$	16,166	17,383		1,987		2/1/2010
Crystal River, FL	—		912		12,117		—		912		$	12,117	13,029		1,489		2/1/2010
Dade City, FL	—		605		8,042		—		605		$	8,042	8,647		988		2/1/2010
Hudson, FL (2 facilities)	—		1,290		22,392		—		1,290		$	22,392	23,682		8,942		Various
Merritt Island, FL	—		701		8,869		—		701		$	8,869	9,570		6,546		10/17/1991
New Port Richey, FL	—		228		3,023		—		228		$	3,023	3,251		372		2/1/2010
Plant City, FL	—		405		8,777		—		405		$	8,777	9,182		6,634		10/17/1991
Stuart, FL	—		787		9,048		—		787		$	9,048	9,835		6,771		10/17/1991
Trenton, FL	—		851		11,312		—		851		$	11,312	12,163		1,390		2/1/2010
Grangeville, ID	—		122		2,491		—		122		$	2,491	2,613		1,229		8/13/1996
Glasgow, KY	—		33		2,110		—		33		$	2,110	2,143		1,902		10/17/1991
Greenfield, MA	—		370		4,341		—		370		$	4,341	4,711		153		8/30/2013
Holyoke, MA	—		110		943		—		110		$	943	1,053		35		8/30/2013
Quincy, MA	—		450		710		—		450		$	710	1,160		24		8/30/2013
Taunton, MA	—		900		5,906		—		900		$	5,906	6,806		210		8/30/2013
Desloge, MO	—		178		3,804		—		178		$	3,804	3,982		2,989		10/17/1991
Joplin, MO	—		175		4,034		—		175		$	4,034	4,209		2,501		10/17/1991
Kennett, MO	—		180		4,928		—		180		$	4,928	5,108		3,919		10/17/1991
Maryland Heights, MO	—		482		5,512		—		482		$	5,512	5,994		4,953		10/17/1991
St. Charles, MO	—		150		4,790		—		150		$	4,790	4,940		3,757		10/17/1991
Manchester, NH	—		790		20,077		—		790		$	20,077	20,867		693		8/30/2013
Epsom, NH	—		630		2,191		—		630		$	2,191	2,821		81		8/30/2013
Albany, OR	—		190		11,150		—		190		$	11,150	11,340		219		3/31/2014
Creswell, OR	—		470		9,642		—		470		$	9,642	10,112		205		3/31/2014
Forest Grove, OR	—		540		12,277		—		540		$	12,277	12,817		257		3/31/2014
Anderson, SC	—		308		4,643		—		308		$	4,643	4,951		3,998		10/17/1991
Greenwood, SC	—		222		3,457		—		222		$	3,457	3,679		2,925		10/17/1991
Laurens, SC	—		42		3,426		—		42		$	3,426	3,468		2,685		10/17/1991
Orangeburg, SC	—		300		3,715		—		300		$	3,715	4,015		640		9/25/2008
Athens, TN	—		38		1,463		—		38		$	1,463	1,501		1,314		10/17/1991
Chattanooga, TN	—		143		2,309		—		143		$	2,309	2,452		2,044		10/17/1991
Dickson, TN	—		90		3,541		—		90		$	3,541	3,631		2,798		10/17/1991
Franklin, TN	—		47		1,130		—		47		$	1,130	1,177		955		10/17/1991
Hendersonville, TN	—		363		3,837		—		363		$	3,837	4,200		2,667		10/17/1991

NATIONAL HEALTH INVESTORS, INC.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2014
(in thousands)
				Costs	Gross Amount at Which
		Initial Cost to Company		Capitalized	Carried at Close of Period				Date
			Buildings &	Subsequent to		Buildings &		Accumulated	Acquired/
	Encumbrances	Land	Improvements	Acquisition	Land	Improvements	Total	Depreciation	Constructed
Johnson City, TN	—	85	1,918	—	85	1,918	2,003	1,788	10/17/1991
Lewisburg, TN (2 facilities)	—	46	994	—	46	994	1,040	928	10/17/1991
McMinnville, TN	—	73	3,618	—	73	3,618	3,691	2,814	10/17/1991
Milan, TN	—	41	1,826	—	41	1,826	1,867	1,545	10/17/1991
Pulaski, TN	—	53	3,921	—	53	3,921	3,974	3,090	10/17/1991
Lawrenceburg, TN	—	98	2,901	—	98	2,901	2,999	2,113	10/17/1991
Dunlap, TN	—	35	3,679	—	35	3,679	3,714	2,651	10/17/1991
Smithville, TN	—	35	3,816	—	35	3,816	3,851	2,923	10/18/1991
Somerville, TN	—	26	678	—	26	678	704	637	10/19/1991
Sparta, TN	—	80	1,602	—	80	1,602	1,682	1,311	10/20/1991
Canton, TX	—	420	12,330	—	420	12,330	12,750	682	4/18/2013
Corinth, TX	—	1,075	13,935	—	1,075	13,935	15,010	829	4/18/2013
Ennis, TX	—	986	9,025	—	986	9,025	10,011	1,015	10/31/2011
Greenville, TX	—	1,800	13,948	—	1,800	13,948	15,748	1,409	10/31/2011
Houston, TX (5 facilities)	—	3,818	63,921	—	3,818	63,921	67,739	10,255	Various
Kyle, TX	—	1,096	12,279	—	1,096	12,279	13,375	1,114	6/11/2012
Mesquite, TX	—	180	6,162	—	180	6,162	6,342	2,365	9/1/1998
Paris, TX	—	60	12,040	—	60	12,040	12,100	2,017	6/30/2009
San Antonio, TX	—	300	12,150	—	300	12,150	12,450	2,208	6/30/2009
Bristol, VA	—	176	2,511	—	176	2,511	2,687	1,973	10/17/1991
	—	25,350	417,270	—	25,350	417,270	442,620	129,074
Assisted Living Facilities
Rainbow City, AL	—	670	11,330	—	670	11,330	12,000	410	10/31/2013
Gilbert, AZ	—	451	3,142	79	451	3,221	3,672	1,274	12/31/1998
Glendale, AZ	—	387	3,823	57	387	3,880	4,267	1,544	12/31/1998
Tucson, AZ (2 facilities)	—	919	6,656	190	919	6,846	7,765	2,697	12/31/1998
Sacramento, CA	—	660	10,840	—	660	10,840	11,500	179	6/1/2014
Bartow, FL	—	225	3,192	—	225	3,192	3,417	396	11/30/2010
Lakeland, FL	—	250	3,167	—	250	3,167	3,417	395	11/30/2010
Maitland, FL	—	1,687	5,428	—	1,687	5,428	7,115	2,808	8/6/1996
St. Cloud, FL	—	307	3,117	—	307	3,117	3,424	388	11/30/2010
Greensboro, GA	—	572	4,849	12	572	4,861	5,433	446	9/15/2011
Ames, IA	—	360	4,670	—	360	4,670	5,030	200	6/28/2013
Burlington, IA	—	200	8,374	—	200	8,374	8,574	360	6/28/2013
Cedar Falls, IA	4,072	260	4,700	—	260	4,700	4,960	206	6/28/2013
Clinton, IA	2,818	133	3,215	—	133	3,215	3,348	391	6/30/2010
Ft. Dodge, IA	—	100	7,208	—	100	7,208	7,308	302	6/28/2013

NATIONAL HEALTH INVESTORS, INC.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2014
(in thousands)
				Costs	Gross Amount at Which
		Initial Cost to Company		Capitalized	Carried at Close of Period				Date
			Buildings &	Subsequent to		Buildings &		Accumulated	Acquired/
	Encumbrances	Land	Improvements	Acquisition	Land	Improvements	Total	Depreciation	Constructed
Iowa City, IA	2,559	297	2,725	—	297	2,725	3,022	381	6/30/2010
Marshalltown, IA	—	240	6,208	—	240	6,208	6,448	265	6/28/2013
Muscatine, IA	—	140	1,802	—	140	1,802	1,942	87	6/28/2013
Urbandale, IA	—	540	4,292	—	540	4,292	4,832	194	6/28/2013
Caldwell, ID	—	320	10,080	—	320	10,080	10,400	210	3/31/2014
Weiser, ID	—	20	2,433	—	20	2,433	2,453	128	12/21/2012
Bourbonnais, IL	—	170	16,594	—	170	16,594	16,764	694	6/28/2013
Moline, IL	—	250	5,630	—	250	5,630	5,880	244	6/28/2013
Peoria, IL	4,260	403	4,532	96	403	4,628	5,031	625	10/19/2009
Quincy, IL	—	360	12,403	—	360	12,403	12,763	517	6/28/2013
Rockford, IL	—	390	12,576	—	390	12,576	12,966	541	6/28/2013
Springfield, IL	—	450	19,355	—	450	19,355	19,805	808	6/28/2013
Carmel, IN	—	475	7,336	—	475	7,336	7,811	—	11/12/2014
Crawfordsville, IN	—	300	3,134	—	300	3,134	3,434	138	6/28/2013
Crown Point, IN	—	791	7,020	227	791	7,247	8,038	277	10/30/2013
Greenwood, IN	—	463	6,810	245	463	7,055	7,518	270	11/7/2013
Lafayette, IN	—	546	4,583	—	546	4,583	5,129	552	6/30/2010
Wabash, IN	—	320	2,241	—	320	2,241	2,561	111	6/28/2013
Mission, KS	—	1,901	17,310	—	1,901	17,310	19,211	1,370	9/30/2012
Overland Park, KS	—	2,199	20,026	—	2,199	20,026	22,225	1,585	9/30/2012
Bastrop, LA	—	325	2,456	—	325	2,456	2,781	290	4/30/2011
Bossier City, LA	—	500	3,344	—	500	3,344	3,844	415	4/30/2011
Minden, LA	—	280	1,698	—	280	1,698	1,978	199	4/30/2011
West Monroe, LA	—	770	5,627	—	770	5,627	6,397	624	4/30/2011
Baltimore, MD	—	860	8,078	353	860	8,431	9,291	257	10/31/2013
Battle Creek, MI	3,112	398	3,093	—	398	3,093	3,491	443	10/19/2009
Lansing, MI	6,749	340	7,908	—	340	7,908	8,248	1,118	10/19/2009
Midland, MI	5,880	504	6,612	—	504	6,612	7,116	894	10/19/2009
Saginaw, MI	3,871	248	4,212	—	248	4,212	4,460	590	10/19/2009
Champlin, MN	—	980	4,430	—	980	4,430	5,410	642	3/10/2010
Hugo, MN	—	400	3,800	—	400	3,800	4,200	535	3/10/2010
Maplewood, MN	—	1,700	6,510	—	1,700	6,510	8,210	936	3/10/2010
North Branch, MN	—	595	2,985	—	595	2,985	3,580	467	3/10/2010
Grand Island, NE	4,528	370	5,029	90	370	5,119	5,489	214	6/28/2013
Lincoln, NE	—	380	10,904	—	380	10,904	11,284	451	6/28/2013
Omaha, NE	—	480	7,039	—	480	7,039	7,519	295	6/28/2013
Marysville, OH	—	1,250	13,950	—	1,250	13,950	15,200	636	7/1/2013
Middletown, OH	9,503	940	15,548	—	940	15,548	16,488	75	10/31/2014

NATIONAL HEALTH INVESTORS, INC.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2014
(in thousands)
				Costs	Gross Amount at Which
		Initial Cost to Company		Capitalized	Carried at Close of Period				Date
			Buildings &	Subsequent to		Buildings &		Accumulated	Acquired/
	Encumbrances	Land	Improvements	Acquisition	Land	Improvements	Total	Depreciation	Constructed
Milwaukie, OR	—	370	5,283	—	370	5,283	5,653	35	9/30/2014
Ontario, OR (2 facilities)	—	428	6,128	—	428	6,128	6,556	323	12/21/2012
Conway, SC	—	344	2,877	94	344	2,971	3,315	1,174	12/31/1998
Gallatin, TN	—	326	2,277	61	326	2,338	2,664	925	3/31/1999
Kingsport, TN	—	354	2,568	66	354	2,634	2,988	1,042	12/31/1998
Tullahoma, TN	—	191	2,216	57	191	2,273	2,464	883	3/31/1999
Beaver Dam, WI	—	210	20,149	—	210	20,149	20,359	1,162	12/21/2012
	47,352	31,299	405,522	1,627	31,299	407,149	438,448	35,618
Independent Living Facilities
Rogers, AR	—	1,470	25,283	—	1,470	25,283	26,753	694	12/23/2013
Fort Smith, AR	—	590	22,447	—	590	22,447	23,037	611	12/23/2013
Pinole, CA	—	1,020	18,066	—	1,020	18,066	19,086	492	12/23/2013
West Covina, CA	—	940	20,280	—	940	20,280	21,220	545	12/23/2013
Hemet, CA	—	1,250	12,645	—	1,250	12,645	13,895	359	12/23/2013
Fresno, CA	—	420	10,899	—	420	10,899	11,319	315	12/23/2013
Merced, CA	—	350	18,712	—	350	18,712	19,062	511	12/23/2013
Roseville, CA	—	630	31,343	—	630	31,343	31,973	842	12/23/2013
Modesto, CA	—	1,170	22,673	—	1,170	22,673	23,843	607	12/23/2013
Athens, GA	—	910	31,940	—	910	31,940	32,850	861	12/23/2013
Columbus, GA	—	570	8,639	—	570	8,639	9,209	254	12/23/2013
Savannah, GA	—	1,200	15,851	—	1,200	15,851	17,051	441	12/23/2013
Boise, ID	—	400	12,422	—	400	12,422	12,822	346	12/23/2013
Fort Wayne, IN	—	310	12,864	—	310	12,864	13,174	370	12/23/2013
Kenner, LA	—	310	24,259	—	310	24,259	24,569	656	12/23/2013
St. Charles, MO	—	344	3,181	—	344	3,181	3,525	2,284	10/17/1991
Voorhees, NJ	—	670	23,710	—	670	23,710	24,380	633	12/23/2013
Gahanna, OH	—	920	22,919	—	920	22,919	23,839	629	12/23/2013
Broken Arrow, OK	—	2,660	18,476	—	2,660	18,476	21,136	513	12/23/2013
Newberg, OR	—	1,080	19,187	—	1,080	19,187	20,267	529	12/23/2013
Myrtle Beach, SC	—	1,310	26,229	—	1,310	26,229	27,539	702	12/23/2013
Greenville, SC	—	560	16,547	—	560	16,547	17,107	460	12/23/2013
Johnson City, TN	—	55	4,077	—	55	4,077	4,132	2,588	10/17/1991
Chattanooga, TN	—	9	1,567	—	9	1,567	1,576	1,148	10/17/1991
Bellevue, WA	—	780	18,692	—	780	18,692	19,472	504	12/23/2013
Vancouver, WA (2 facilities)	—	1,740	23,411	—	1,740	23,411	25,151	653	12/23/2013
Yakima, WA	—	440	14,185	—	440	14,185	14,625	388	12/23/2013
	—	22,108	480,504	—	22,108	480,504	502,612	18,935

NATIONAL HEALTH INVESTORS, INC.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2014
(in thousands)
							Costs		Gross Amount at Which
			Initial Cost to Company				Capitalized		Carried at Close of Period								Date
					Buildings &		Subsequent to				Buildings &				Accumulated		Acquired/
	Encumbrances		Land		Improvements		Acquisition		Land		Improvements		Total		Depreciation		Constructed
Senior Living Campuses
Loma Linda, CA	—		1,200		10,800		4,232		1,200		15,032		16,232		687		9/28/2012
Maitland, FL	—		2,317		9,161		—		2,317		9,161		11,478		5,422		8/6/1996
West Palm Beach, FL	—		2,771		4,286		—		2,771		4,286		7,057		3,633		8/6/1996
Nampa, ID	—		243		4,182		—		243		4,182		4,425		2,042		8/13/1996
Mt. Airy, NC	—		1,370		7,470		—		1,370		7,470		8,840		—		12/17/2014
Silverdale, WA	—		1,750		23,860		2,166		1,750		26,026		27,776		1,658		8/16/2012
	—		9,651		59,759		6,398		9,651		66,157		75,808		13,442
Entrance-Fee Communities
Fernandina Beach, FL	—		1,430		63,420		—		1,430		63,420		64,850		—		12/17/2014
St. Simons Island, GA	—		8,770		38,070		—		8,770		38,070		46,840		—		12/17/2014
Winston-Salem, NC	—		8,700		73,920		—		8,700		73,920		82,620		—		12/17/2014
Greenville, SC	—		5,850		90,760		—		5,850		90,760		96,610		—		12/17/2014
Myrtle Beach, SC	—		3,910		82,140		—		3,910		82,140		86,050		—		12/17/2014
Pawleys Island, SC	—		1,480		38,620		—		1,480		38,620		40,100		—		12/17/2014
Spartanburg, SC	—		900		49,190		—		900		49,190		50,090		—		12/17/2014
	—		31,040		436,120		—		31,040		436,120		467,160		—
Medical Office Buildings
Crestview, FL	—		165		3,349		—		165		3,349		3,514		2,193		6/30/1993
Pasadena, TX	—		631		6,341		—		631		6,341		6,972		4,312		1/1/1995
	—		796		9,690		—		796		9,690		10,486		6,505
Hospitals
La Mesa, CA	—		4,180		8,320		—		4,180		8,320		12,500		1,482		3/10/2010
Jackson, KY	—		540		10,163		7,583		540		17,746		18,286		6,079		6/12/1992
Murfreesboro, TN	—		2,444		17,585		—		2,444		17,585		20,029		988		10/1/2012
	—		7,164		36,068		7,583		7,164		43,651		50,815		8,549
Total continuing operations properties	47,352		127,408		1,844,933		15,608		127,408		1,860,541		1,987,949		212,123
Corporate office	—		158		677		66		157		743		900		177
	$	47,352	$	127,566	$	1,845,610	$	15,674	$	127,565	$	1,861,284	$	1,988,849	$	212,300

NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

(A) See the notes to the consolidated financial statements.

(B) Depreciation is calculated using estimated useful lives up to 40 years for all completed facilities.

(C) Subsequent to NHC's transfer of the original real estate properties in 1991, we have purchased from NHC $33,909,000 of additions to those properties. As the additions were purchased from NHC rather than developed by us, the $33,909,000 has been included as Initial Cost to Company.

(D) At December 31, 2013, the tax basis of the Company's net real estate assets was $1,742,086.

NATIONAL HEALTH INVESTORS, INC.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
FOR THE YEARS ENDED DECEMBER 31, 2014, 2013 AND 2012
(in thousands)
	December 31,
	2014			2013			2012
Investment in Real Estate:
Balance at beginning of period	$	1,422,002		$	698,536		$	541,493
Additions through cash expenditures	533,171			654,670			110,601
Change in property additions in accounts payable	(995		)	3,086			—
Additions through contingent liabilities	3,000			1,600			—
Additions through assumption of debt	7,858			80,528			19,250
Tax deferred exchange funds applied to investment in real estate	23,813			—			—
Additions through conveyance of noncontrolling interest	—			—			10,964
Additions through settlement of mortgage note	—			13,741			—
Sale of properties for cash	—			(30,159		)	(17,259		)
Reclassification from assets held for sale, net	—			—			39,323
Reclassification to assets held for sale, net	—			—			(5,836		)
Balance at end of period	$	1,988,849		$	1,422,002		$	698,536
Accumulated Depreciation:
Balance at beginning of period	$	174,262		$	163,146		$	146,698
Addition charged to costs and expenses	38,038			20,658			16,981
Sale of properties	—			(9,542		)	(6,250		)
Reclassification from assets held for sale, net	—			—			9,942
Reclassification to assets held for sale	—			—			(4,225		)
Balance at end of period	$	212,300		$	174,262		$	163,146

XML

Subsequent Events Subsequent Events (Narrative) (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Feb. 10, 2015	Jan. 15, 2015
Subsequent Event [Line Items]
Unsecured Debt		$ 250,000,000	$ 370,000,000
LCS Master Credit Agreement [Member]
Subsequent Event [Line Items]
Notes Receivable, Total Borrowings, Master Credit Agreement				154,500,000
Notes Receivable, Number Of Loans, Master Credit Agreement				2
Note Receivable, Prepayment Penalty, Rate				5.00%
Purchase Option, Amount, Minimum				115,000,000
Purchase Option, Period, Months	0 years 15 months 0 days
Purchase Option, Open Period, Begin, Note Year	5 years 0 months 0 days
8-Year Private Placement Notes [Member]
Subsequent Event [Line Items]
Unsecured Debt					125,000,000
Debt Instrument, Term	8 years 0 months 0 days
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate					3.99%
12-Year Private Placement Notes [Member]
Subsequent Event [Line Items]
Unsecured Debt					100,000,000
Debt Instrument, Term	12 years 0 months 0 days
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate					4.51%
Note A [Member] | LCS Master Credit Agreement [Member]
Subsequent Event [Line Items]
Notes Receivable, Total Borrowings, Master Credit Agreement				60,000,000
Notes Receivable, Interest Rate, Master Credit Agreement				6.75%
Loans And Leases Receivable, Commitment, Fixed Rates, Escalator, Basis Points				10
Note Receivable, First Note Year For Rate Escalator	P3Y0M0D
Loan Term	10 years 0 months 0 days
Note Receivable, Amount Funded At Closing, Master Credit Agreement				33,100,000
Note Receivable, Prepayment, Disallowance Period	3 years 0 months 0 days
Note Receivable, Prepayment Penalty, Rate Decrease				1.00%
Note Receivable, Prepayment Allowance Period, Master Credit Agreement	0 years 6 months 0 days
Note B [Member] | LCS Master Credit Agreement [Member]
Subsequent Event [Line Items]
Notes Receivable, Total Borrowings, Master Credit Agreement				$ 94,500,000
Notes Receivable, Interest Rate, Master Credit Agreement				8.00%
Loan Term	5 years 0 months 0 days
Note Receivable, Expected Funding Period	0 years 20 months 0 days

XML

Income Taxes Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Income Taxes [Abstract]

Schedule of Dividends Paid, Per Share [Table Text Block]

Per share dividend payments to common stockholders for the last three years are characterized for tax purposes as follows:

(Unaudited)	2014		2013		2012
Ordinary income	$	2.53548	$	2.85895	$	2.6287
Capital gain	—		0.16493		0.0113
Return of capital	0.54452		0.09612		—
Dividends paid per common share	$	3.08	$	3.12	$	2.64

XML

Earnings and Dividends Per Share

12 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

Earnings Per Share

EARNINGS AND DIVIDENDS PER COMMON SHARE

The weighted average number of common shares outstanding during the reporting period is used to calculate basic earnings per common share. Diluted earnings per common share assume the exercise of stock options and vesting of restricted shares using the treasury stock method, to the extent dilutive. The conversion price within our convertible debt was in excess of the average stock price for the year, thus the impact of the conversion option was anti-dilutive to the year-end earnings per share calculation and as such had no effect on our earnings per share. If current prices increase above the initial conversion price, some dilution will be attributable to the conversion feature going forward.

The following table summarizes the average number of common shares and the net income used in the calculation of basic and diluted earnings per common share (in thousands, except share and per share amounts):

	Year Ended December 31,
	2014		2013		2012
Income from continuing operations attributable to common stockholders	$	101,609	$	78,499	$	72,667
Discontinued operations	—		27,684		18,064
Net income attributable to common stockholders	$	101,609	$	106,183	$	90,731
BASIC:
Weighted average common shares outstanding	33,375,966		28,362,398		27,811,813
Income from continuing operations per common share	$	3.04	$	2.77	$	2.61
Discontinued operations per common share	—		.97		.65
Net income per common share	$	3.04	$	3.74	$	3.26
DILUTED:
Weighted average common shares outstanding	33,375,966		28,362,398		27,811,813
Stock options and restricted shares	40,048		35,304		26,907
Average dilutive common shares outstanding	33,416,014		28,397,702		27,838,720
Income from continuing operations per common share	$	3.04	$	2.77	$	2.61
Discontinued operations per common share	—		.97		.65
Net income per common share	$	3.04	$	3.74	$	3.26
Incremental shares excluded since anti-dilutive:
Stock options with an exercise price in excess of the average market price for our common shares	13,831		23,883		—
Regular dividends declared per common share	$	3.08	$	2.90	$	2.64
Special dividends declared per common share1	$	—	$	—	$	.22
1Special dividends are paid in January following the year in which they are declared