Westlake Village, CA-based LTC Properties has invested $10 million in senior housing and care properties this year, which is more than its investments for all of last year, Chairman and CEO Wendy Simpson said Friday during the real estate investment trust’s second-quarter earnings call.
“We are continuing to identify additional strategic investments and have been busy touring sites and building relationships,” she said. “Our focus for this year remains on strategic and sensible growth.”
LTC Properties has closed on approximately $110 million in purchases to date this year, and the REIT is on track to close on another $60 million to $70 million by the end of the year, Co-president and Chief Investment Officer Clint Malin said.
During the second quarter, LTC Properties acquired four newer skilled nursing facilities in Texas, which have a combined total of 339 beds, for $51.5 million. As previously reported, the SNFs are being leased to an affiliate of Ignite Medical Resorts.
The lease term is 10 years, with two five‑year renewal options, Co-president and Chief Financial Officer Pamela Kessler said. The lease also contains a purchase option beginning in the sixth lease year through the end of the seventh lease year, she said.
“We have been very successful at recycling capital into newer properties to further reduce the average age of our portfolio,” Kessler said.
LTC Properties’ revenue as of the second quarter was $4.9 million more than in the second quarter of 2021, according to Kessler. The increase, she said, stems from a $1.8 million rise in rental revenue, primarily due to a lease termination fee received in connection with the sale of a 74-unit assisted living community.
That increase in rental income, however, was offset partially by the sale of three assisted living communities and a SNF during the second quarter and by the sale of a SNF during 2021, as well as temporary rent deferrals, the company said in a press release issued in conjunction with the earnings call.
Kessler said that during the second quarter, the REIT recognized an approximate $38 million gain from the sale of four properties. Two of the properties were assisted living communities in California, which were sold for a total of $43.7 million, a $25.9 million gain. Another property was an assisted living community in Virginia, which the REIT sold for $16.9 million and recorded a $1.3 million gain. The fourth property was a skilled nursing facility in California, sold for $13.3 million for a $10.8 million gain.
The properties, Kessler said, were “fairly old.” The California SNF, for instance, was more than 50 years old, she said.
Malin reported that average occupancy in the skilled nursing portfolio was 72% in June of this year, compared with 71% in January and March. “As a point of reference, our average skilled nursing occupancy in 2019 was 80%.,” he said.
See additional coverage of the earnings call in the McKnight’s Senior Living Daily Briefing.
