LTC Completes Brookdale Portfolio Transaction
January 08 2024 - 5:00PM
Business Wire
-- Three New Master Leases; Net Proceeds of
$23 Million; Anticipated Net Gain of $17 Million Related to
Property Sales; Full Rent Replaced --
LTC Properties Inc. (NYSE: LTC) (“LTC” or the
“Company”), a real estate investment trust that invests in
seniors housing and health care properties, today announced the
completion of its previously announced process involving its
35-property Brookdale Senior Living (“Brookdale”) portfolio.
Revenue from the portfolio will be fully replaced through a
combination of new leases, interest related to seller financing,
and pre-invested proceeds at a weighted average yield of 8.5%. The
transactions reduce LTC’s revenue concentration from Brookdale by
40%.
The 35-property assisted living portfolio was modified as
follows:
- 17 communities across four states including Colorado (six),
Texas (six), Kansas (four), and Ohio (one), with a total of 738
units, were re-leased to Brookdale. The new master lease, which
commenced in January 2024, is for six years at an initial annual
rent of $9.3 million.
- Five communities in Oklahoma, with a total of 184 units, were
transferred and are now being operated by Oxford Senior Living, an
existing LTC operator. The new master lease, which commenced in
November 2023, is for three years, with one four-year extension, at
an initial annual rent of $960,000.
- Five communities in North Carolina, with a total of 210 units,
were transferred and are now being operated by Navion Senior
Solutions, an operator new to LTC. The master lease, which
commenced in January 2024, is for six years at an initial annual
rent of $3.3 million.
- Eight communities across three states including Florida (four),
South Carolina (three), and Oklahoma (one), with a total of 341
units, were sold for $28.0 million. LTC received proceeds of $23.2
million, net of transaction costs and seller financing, and
anticipates recording a gain of $17.0 million related to the sales.
The Company provided seller financing collateralized by two of the
Florida properties, with a total of 92 units. The $4.0 million
seller-financed mortgage loan term is two years, with a one-year
extension, at an interest rate of 8.75%.
“LTC committed to successfully position the previous Brookdale
portfolio by re-leasing some properties and selling others. We are
pleased to have reached a favorable outcome,” said Wendy Simpson,
LTC’s Chairman and Chief Executive Officer. “Importantly, rent from
the previous portfolio has been fully replaced, and we’ve generated
sales proceeds to pay down a portion of our debt, which was
incurred to pre-fund accretive investments earlier this year.”
About LTC
LTC is a real estate investment trust (REIT) investing in
seniors housing and health care properties primarily through
sale-leasebacks, mortgage financing, joint-ventures and structured
finance solutions including preferred equity and mezzanine lending.
LTC’s investment portfolio includes 200 properties in 27 states
with 30 operating partners. Based on its gross real estate
investments, LTC’s investment portfolio is comprised of
approximately 50% seniors housing and 50% skilled nursing
properties. Learn more at www.LTCreit.com.
Forward-Looking
Statements
This press release includes statements that are not purely
historical and are “forward-looking statements” within the meaning
of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended,
including statements regarding the Company’s expectations, beliefs,
intentions or strategies regarding the future. All statements other
than historical facts contained in this press release are
forward-looking statements. These forward-looking statements
involve a number of risks and uncertainties. All forward-looking
statements included in this press release are based on information
available to the Company on the date hereof, and the Company
assumes no obligation to update such forward-looking statements.
Although the Company’s management believes that the assumptions and
expectations reflected in such forward-looking statements are
reasonable, no assurance can be given that such expectations will
prove to have been correct. The actual results achieved by the
Company may differ materially from any forward-looking statements
due to the risks and uncertainties of such statements.
(tables follow)
Brookdale Lease Transition
Summary
($ in thousands)
Number of Properties
Number of Units
State(s)
Year-One Revenue
Brookdale New Master Lease
17
738
CO, KS, OH & TX
$
9,325
Oklahoma Portfolio
5
184
OK
960
North Carolina Portfolio
5
210
NC
3,300
Total Rent from New Leases:
27
1,132
$
13,585
Seller-Financed Mortgage Loan(1)
350
Pre-Invested Net Sales Proceeds(2)
1,975
Total Brookdale Replacement Income
$
15,910
Brookdale 2023 Rental Income
$
15,418
Revenue Increase
$
492
1)
Collateralized by two communities located
in Florida with a total of 92 units with a two-year term at a yield
of 8.75%.
2)
Represents income from sales proceeds of
$23,232 using LTC’s 2023 pre-investment weighted-average yield of
8.5%. See sales table below for further information.
Brookdale Portfolio Sale
Summary
($ in thousands)
State
Number of Properties
Number of Units
Sales Price
Net Proceeds
Anticipated Gain
Florida(1)
4
176
$
18,750
$
14,310
$
13,300
South Carolina
3
128
8,409
8,153
3,700
Oklahoma
1
37
800
769
—
Total
8
341
$
27,959
$
23,232
$
17,000
1)
Sale includes $4,000 of seller
financing.
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version on businesswire.com: https://www.businesswire.com/news/home/20240108416286/en/
Mandi Hogan (805) 981-8655
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