LTC - LTC Properties completes Brookdale portfolio transactions sees $17M net gain

2024-01-08 17:23:53 ET

LTC Properties ( NYSE: LTC ) completed its previously announced transactions involving its 35-property Brookdale Senior Living ( NYSE: BKD ) portfolio, which resulted in net proceeds of $23M. The company anticipates a net gain of $17M related to the property sales.

The transactions reduced LTC's ( LTC ) revenue concentration from Brookdale by 40%. 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%, LTC said.

"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," said LTC ( LTC ) Chairman and CEO Wendy Simpson.

The transactions include:

• 17 communities with a total of 738 units were re-leased to Brookdale ( BKD ) under a new master lease for six years at an initial annual rent of $9.3M;
• Five communities with a total of 184 units were transferred and are 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 $960K;
• Five communities with a total of 210 units were transferred and are now operated by Navion Senior Solutions, an operator new to LTC ( LTC ). That master lease, which started in January 2024, is for six years at an initial annual rent of $3.3M;
• Eight communities with a total of 341 units were sold for $28.0M. The company provided seller financing collateralized by two of the Florida properties with a total of 92 units. The $4.0M seller-financed mortgage loan term is two years with a one-year extension at an interest rate of 8.75%.

More on LTC Properties, Brookdale

• LTC Properties: Strong Healthcare Trends Support 7% Yield
• Brookdale Senior Living extends debt maturities with two financing deals
• Brookdale Senior Living upped to Neutral at BofA as results improve

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