Sabra Health Care REIT has entered into an agreement to sell the Senior Care Centers communities in its portfolio — two senior living communities and 36 skilled nursing communities — for $385 million, the real estate investment trust announced Thursday.
Sabra said the deal was made Wednesday and is expected to close early next year.
The transaction comes after Irvine, CA-based Sabra had issued notices of default and lease termination due to nonpayment of rent under the terms of Dallas-based Senior Care’s master leases during the third quarter. Deposits were “fully exhausted” to pay contractual rents, and Senior Care has been operating the communities on a month-to-month basis.
Senior Care Centers filed for bankruptcy protection on Tuesday, citing cuts in reimbursement and payments from private insurers, “burdensome” debt and “ballooning” rent payments. Sabra CEO and Chairman Rick Matros, however, said he doesn’t expect the action to have a “substantive impact” on the sale of the communities in its portfolio.
“We are pleased with the progress we have made on our planned disposition of the Senior Care Centers facilities,” he said in a statement. “The purchase price of $385 million is slightly higher than the $377.5 million upfront portion of the purchase price previously announced. We determined it was in our best interest to forego a potential earn-out opportunity that may or may not be realized at some future date and instead receive more cash up front.”
LTC Properties on Wednesday said that it is discussing transitioning the 11 Senior Care Centers skilled nursing facilities in its portfolio to another operator in Texas, where the buildings are located. As of Tuesday, the Westlake Village, CA-based REIT had not received December rent owed for the facilities, according to LTC.
“As security under the lease, LTC holds a letter of credit in the amount of approximately $2 million, maintenance and repair escrows of approximately $2.2 million and property tax escrows of approximately $1.8 million,” the REIT said in a statement. “LTC had previously requested a consensual termination of the lease and now has strongly urged Senior Care to reject LTC’s lease in bankruptcy.”