Real estate investment trust LTC Properties, Inc. (NYSE:LTC) announced on Wednesday the acquisition of two skilled nursing facilities located in Ohio for $54 million.
The first property, located in Cincinnati, Ohio, was built in 2009. The second property, located in Dayton, Ohio, was built in 2010. The two facilities have a total of 288 licensed beds.
LTC funded the acquisition from its unsecured revolving line of credit and cash on hand.
Simultaneous with the purchase, the REIT entered into a master lease with affiliates of Carespring Health Care Management, LLC at an initial cash yield of 8.5% and an estimated GAAP yield of 10.1%. The lease has an initial 15-year term with two 5-year renewal options and annual rent escalations of the less of 2.25% for the first seven years and 2.50% for the remainder of the term, or a calculation based on the consumer price index.
“LTC is excited to establish a long-term relationship with Carespring which has been an innovator in the skilled nursing industry in Ohio and Northern Kentucky,” said Wendy Simpson, the company’s CEO and president. “This investment expands our real estate portfolio with new, state-of-the-art skilled nursing facilities designed to provide care for medically complex and rehabilitation focused patients. This acquisition is consistent with our strategy of investing in modernized, purpose-built facilities in solid markets with experienced regional operators possessing strong operational records. We are very pleased to have been able to include Carespring in our portfolio.”
Written by Alyssa Gerace