Dallas-based operator Capital Senior Living has completed the previously announced exit of all its triple-net lease agreements and has established a new management services business to aid future growth.
The firm announced Thursday that it had transitioned 23 of its formerly leased communities to other operators as of Dec. 31. Capital will continue to manage the remaining 16 formerly leased communities under interim cash flow leases or management agreements until their moves are complete.
The company also reached agreements for rent reductions and early terminations of all master leases with its three real estate investment trust landlords. Completion of these actions has improved the Capital’s annual cash flow by approximately $22 million and reduced its lease-related liabilities by approximately $264.4 million, the firm said.
In addition, on Dec. 31, Capital finalized an agreement with Ventas to manage the seven communities it previously had leased from the REIT with an auto-renewing, annual agreement for which Capital will receive a percentage of revenue. The firm also manages an Ohio community it sold in early December. The efforts are all part of a four-pronged improvement strategy laid out by the firm in 2019, signified by the acronym SING, which stands for stabilize, invest, nurture and grow.
“We continue to focus on our plan to drive sustainable growth and value creation while keeping our residents safe, healthy and engaged. “I appreciate the positive engagement we have had with our REIT partners and their confidence in our operational team and expertise,” Capital President and CEO Kimberly S. Lody said in a statement. “Managing these communities is a springboard for our newly established management services business. This diversified go-forward portfolio positions us well today and into the future.”
