Westlake, CA-based real estate investment trust LTC Properties has announced a $128 million investment in 12 assisted living / memory care properties throughout North Carolina. The properties, with a combined 937 licensed beds in 568 units, are owned and operated by a company already represented in LTC’s portfolio.
That portfolio includes 216 properties in 29 states with 32 operating partners. It is almost equally divided between senior living communities and skilled nursing facilities.
The $128 million investment was funded from approximately $99 million borrowed under LTC’s line of credit and $29 million of net proceeds from the sale of 757,400 shares of LTC’s common stock under its equity distribution agreements during the fourth quarter of 2022.
Approximately $117 million of the investment is for a 97% ownership in a $121 million joint venture for the purchase of 11 properties with the operator, and about $11 million of the investment is a senior mortgage loan to refinance a single property among the 12. The loan carries a two-year term with an interest-only rate of 7.25% and an internal rate of return of 9%.
“This transaction validates our strategy of partnering with strong regional operators with whom we can grow, while continuing to demonstrate the strength of LTC’s balance sheet and the ability to execute sizable transactions in a challenging economic environment,” LTC Chairman and CEO Wendy Simpson said in the announcement. “We are starting 2023 from a solid position with an accretive new investment and remain committed to sourcing opportunities across a variety of structured finance products and creative lease structures.”
Financial news and analysis service Benzinga named LTC Properties among the best-performing REITs of 2022 for withstanding economic headwinds throughout the year. LTC Properties increased its third-quarter revenue of $43.5 million by 16.1% over the third quarter of 2021, according to Benzinga, and funds from operations of $0.45 per share rose by 33% over the third quarter of 2021.
The REIT’s biggest third-quarter move, Benzinga noted, was a $62 million off-market joint venture with PruittHealth in northern Florida. The Sept. 12 deal included three skilled nursing facilities and made LTC Properties the majority owner.
Earlier this month, LTC declared a monthly cash dividend of $0.19 per common stock share per month for the first quarter.
