Similar to real estate investment trusts Omega and Welltower, Westlake Village, CA-based LTC Properties announced a third quarter write-off in straight-line rent receivable balances as a result of going concerns filed by Genesis Healthcare. That’s according to LTC’s third-quarter earnings released Thursday.
The firm noted that its third-quarter financials were affected by a $5.5 million non-recurring, non-cash write-off of straight-line rent receivable balances related to Genesis Healthcare and another undisclosed operator as a result of transitioning these leases to cash-basis accounting as of Sept. 30. LTC noted that although it continues to collect all contractual rent due from Genesis, the other operator did not pay its full contractual rent for the third quarter due to ongoing challenges related to the COVID-19 pandemic. As a result, LTC provided the operator with rent support in the form of deferrals and abatements totaling $756,000 in the third quarter.
LTC reported a net income of $12.1 million in the third quarter, compared with $27 million in the third quarter of last year. Total revenue was $38.1 million for the quarter, compared with $47.1 million a year ago.
Although significant new investments did not occur in the quarter, LTC did commit almost $20 million in preferred equity. The REIT, for instance, invested $6.3 million in Fields Senior Living, which will develop and own a 95-unit assisted living and memory care community in Arlington, WA. Magnolia Place at Smokey Point is expected to be complete in the first quarter of 2022.
Another $13 million commitment in Vancouver, WA, is with University Village at Salmon Creek, a 267-unit independent living and assisted living community being developed by Koelsch Communities. The facility is expected to be completed by the end of 2022, noted Wendy Simpson, LTC’s chairman, CEO and president said Friday on the firm’s third-quarter earnings call.
“The market remains challenging, but I firmly believe that LTC has built a strong reputation as a creative financing partner in the seniors housing and care space by thinking outside of the REIT box to create solutions that provide our operating partners with the financing they need to help grow their business,” Simpson said. “That reputation will serve us well over the long term.”
Read additional coverage of LTC’s earnings call on in this McKnight’s Senior Living editor’s column, in this McKnight’s Senior Living Daily Briefing article, and in this McKnight’s Long-Term Care News Daily Update article.