By Angela Chen
HCP has agreed to reduce the rent of HCR ManorCare Inc. by $68
million annually in exchange for ownership in nine new facilities
owned by HCR ManorCare.
Ohio-based HCR ManorCare will now pay $473 million in rent each
year, starting April 1, instead of $541 million. The agreement
covers about 333 nursing and assisted-living facilities owned by
HCP, a real-estate investment trust.
In return, HCP will own nine new facilities valued at $275
million. The transfer is expected to be completed in the next year.
Starting next month, HCP will receive annual rent of $19 million on
the facilities.
HCP has also initiated a second lease with the initial amount of
$250 million.
Related to the new lease, HCP will record an impairment charge
of $481 million, or $1.03 a share.
It now expects funds from operations of $3.06 to $3.12 a share
and net income between 87 cents and 93 cents a share for the
year.
Analysts had expected earnings of $2.06 a share, according to
Thomson Reuters.
Write to Angela Chen at angela.chen@wsj.com
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