After an audit revealed “substantial doubt” about future viability of the Enlivant portfolio, the joint venture of Sabra Health Care REIT and TPG Real Estate is looking at restructuring its financing.

That restructuring could include obtaining forbearance agreements, modifying financial covenants and reducing rate cap escrow requirements, according to a March 20 filing with the Securities and Exchange Commission. 

Irvine, CA-based Sabra announced in August 2021 that it planned to exit the joint venture with TPG, noting at the time that the Enlivant management team was highly regarded but that its senior living communities had “taken a hit during the pandemic.”

The 157-community, 6,996-unit Enlivant senior living portfolio in which real estate investment trust has a 49% stake through the joint venture with the private equity firm was expected to be sold by the end of last year. As of mid-March, however, the joint venture was at risk of defaulting on loans with several lenders. 

“The only comment I would make beyond the filing is that the pandemic had a significant negative effect on the portfolio performance as it did to many others, and the downturn in the debt market impacted the ability of potential buyers to execute,” Sabra CEO Rick Matros told the McKnight’s Business Daily.

Enlivant is the 13th largest operator and 16th largest owner of senior living communities in the United States, according to the 2022 ASHA 50 lists compiled by the American Seniors Housing Association. The company operated a total of 215 communities and owned 204 as of June 1. Enlivant was No. 12 overall and No. 4 for assisted living on Argentum’s 2022 list of largest senior living companies.

Enlivant is one of the operators with the largest presence in Sabra’s portfolio, according to the REIT. Outside of the joint venture with TPG, Sabra’s portfolio of wholly owned managed communities includes an additional 11 Enlivant communities with a collective 631 units, according to supplemental information posted on Sabra’s website in conjunction with its fourth-quarter 2022 and end-of-year earnings call.

“For more than a decade, Enlivant has delivered high-quality, compassionate care to residents across the country. We are committed to working with our lenders and owners to position the business in a way that best serves and protects the wellbeing of these individuals, their families and our employees,” a spokesperson for Enlivant told McKnight’