LTC Properties, Inc. (NYSE:LTC), a real estate investment trust that primarily invests in long-term care facilities, recently acquired a vacant 3.16 acre plot of land in the Denver area of Colorado for $1.9 million, with plans to build a senior care community.
Simultaneous with the land purchase, LTC entered into a lease agreement and development commitment (up to $7.9 million) to fund the construction of a 60-unit free-standing, private-pay memory care property.
Under the lease terms, rent will begin once the project is completed, or by the August 1, 2013 improvement deadline, whichever comes sooner. Initial rent, at a 9.25% rate, will be calculated based on the land purchase price and construction costs funded, plus 9.0% compounded on each advance under the commitment from the disbursement date, until the earlier of project completion or the August improvement deadline.
The lease has an 11-year initial term, four five-year renewal options, and annual escalations of 2.5%.
Written by Alyssa Gerace