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LTC Properties announced plans for the potential sale or transition of some of its Brookdale Senior Living properties after the senior living operator elected not to exercise its lease renewal option.

The announcement affects 35 assisted living communities across eight states with leases that expire Dec. 31. 

“Our relationship with Brookdale has been one of mutual respect and support, and we wish them well,” LTC Chairman and CEO Wendy Simpson said in a statement. “Through LTC’s active asset management program, and as lease renewals approach, we are prepared and have contingency plans as we have previously disclosed.”

Simpson alluded to that strategy last fall when rumors began swirling that the Brentwood, TN-based senior living operator was shopping for a buyer. She said the Westlake Village, CA-based real estate investment trust was “not sitting here waiting for them to toss us the jump ball,” but looking into operators to potentially bring in to look at the portfolio, as well as the sale of some communities.

Simpson said the strategy gives LTC the opportunity to diversify its portfolio and further expand relationships with “strong regional operators.”

Brookdale’s lease is one of six maturing for the REIT in 2023. Brookdale had until today to extend the lease. 

LTC funded $7 million in capital improvements at Brookdale communities over the past two years. During a fourth-quarter 2022 earnings call, the REIT indicated it made more than $170 million in investments last year, making it the company’s strongest investment year since 2015. Already this year, the business development team closed on more than $128 million in investments and is looking for additional opportunities.

LTC’s investment portfolio includes 215 properties in 29 states with 31 operating partners. Half are senior living communities, and half are skilled nursing facilities. Other senior living operators with a large presence in LTC’s portfolio include ALG Senior Care, representing 10.3% of the REIT’s portfolio, and Anthem Memory Care, representing 6.2% as of Dec. 31. Brookdale currently represents 8.6% of the portfolio.