Nationwide Health in Mortgage Business : Purchase: The Newport Beach firm has agreed to buy loans on 45 convalescent homes in a dozen states.

Nationwide Health Properties Inc., entering the mortgage business for the first time, said Monday that it has agreed to pay $85.6 million to purchase loans on 45 convalescent homes in a dozen states.

Nationwide Health, which usually owns the properties it leases, said it decided to venture into the mortgage holding arena because of the estimated 14% profit it hopes to make, said R. Burce Andrews, chief executive of the Newport Beach real estate investment trust.

The company is buying 25 loans covering the properties from the Resolution Trust Corp., the federal agency that is liquidating failed thrifts. The loans had been in the portfolio of Home Federal Savings of Kansas City, Mo., which regulators seized early last year.

The purchase price represents an 11% discount on the $96.1 million value of the loans.

“This is the good stuff. This is an excellent group of mortgages,” Andrews said. None of the loans is in default, he said, though all have balloon payments that come due within a few years.

Andrews said his firm has been negotiating for six weeks to acquire the mortgages on the long-term health care facilities. Escrow is expected to close on July 9.

The 7-year-old company, which had 1991 revenue of $36.4 million, owns 112 health care facilities across the country and leases them to operators. As a landlord, Nationwide Health receives a tax benefit in the form of depreciation on the facilities, while the operators pay the taxes, upkeep and maintenance.

Andrews said that his company has considered buying defaulted mortgages in the past, but had decided against that strategy on the theory that the operator is probably unreliable or the business is in trouble. But this batch of loans was different.

“These were all good, seasoned mortgages,” Andrews said.

Catherine C. Creswell, a stock analyst for Baltimore-based Alexander Brown & Sons Inc., said that purchasing the mortgages, taken out between 1985 and 1988, is a more risky venture than buying a health care facility and leasing it.

But, she added, the company “did all the right things,” by bidding for the loans at an average 11% discount, choosing mortgages that involve secure, profitable companies and using cash.

“I feel comfortable with this deal,” Creswell said, pointing out that the company still has room to issue debt. Andrews “is going to have some winners here. It can only help his portfolio.”

The average mortgage, amortized for 30 years, is expected to mature in about 4 years, Andrews said. The 14% profit should increase gross revenue between 19 cents and 21 cents a share--or up to $2.8 million in added revenue.

Andrews also said that as the loans mature, Nationwide Health Properties will be in the position to renegotiate the mortgages or buy out the operator and lease the facility back.

Nationwide Health Properties closed Monday at $28.37 a share, up 37 cents a share on the New York Stock Exchange.