Senior Housing Investments & Transactions: Ventas and Kindred’s LTAC Agreement

Kindred to Sell 12 LTAC Hospitals in Agreement with Ventas

Kindred Healthcare, Inc. (NYSE: KND) has entered into a definitive agreement to sell 12 long-term acute care (LTAC) hospitals to Curahealth, LLC, an affiliate of a private investment fund sponsored by Nautic Partners, LLC, for $27.5 million. In connection with the sale of the hospitals, Kindred has agreed to amendments of its master lease with real estate investment trust (REIT) Ventas, Inc. (NYSE: VTR).

Seven of the 12 hospitals in the sale are under Ventas leases, and Kindred will pay a fee to Ventas of $3.5 million upon signing the lease amendments and an additional $2.96 million upon the closing of the sale. Ventas will pay Kindred 50% of the sales proceeds for the real estate attributed to the hospitals leased by the REIT.

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The entire portfolio of the 12 hospitals consists of 783 beds in Arizona, Louisiana, Massachusetts, Oklahoma, Pennsylvania and Tennessee. For the fiscal year 2016, Kindred estimates that the hospitals will generate combined revenue of approximately $215 million and EBITDA at approximately breakeven.

The 12 hospitals have $14 million of annual rent expense, of which $7.7 million is with the seven facilities leased from Ventas.

Réseau Selection Commits $250 Million in Quebec for Five-Year Expansion Plan

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Réseau Sélection, the largest private sector owner, operator, developer, builder and buyer of retirement residences in Quebec, Canada, has committed $250 million to five new retirement communities as part of its five-year, $2-billion expansion plan. The plan is to build 30 new communities and 18,000 units by 2020.

The five communities will be located in Rock Forest, Vaudreuil-Dorion, Deux-Montanges, Granby and Sainte-Dorothée. Construction on the Granby and Deux-Montanges properties is expected to start April 1, opening summer 2017. The Sainte-Dorothée and Vaudreauil-Dorion sites are slated for a construction start date in late summer, with a fall 2017 opening. Work began in November on the Rock Forest community, and the first residents will move in during the winter of 2017.

The company has a unique operating platform in Canada, complete with its own architectural experts, construction company, electrical and mechanical services providers and marketing agency, as well as control of its products and services.

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The company plans to spend roughly $1 billion to expand into major urban centers and suburbs in Ontario, Alberta, British Columbia and the northeast United States. Roséau Sélection has been operating for more than 25 years and currently has 33 communities in operation or under construction. Close to 3,000 employees serve 7,500 residents.

CareTrust REIT Acquires Two Ohio Health Care Communities

CareTrust REIT, a publicly-traded real estate investment trust (REIT) that is engaged in the ownership, acquisition and leasing of senior housing and health care-related properties, has acquired two health care facilities in Cincinnati, Ohio.

The purchase includes two properties: Victory Park Nursing Home, a 55-bed skilled nursing facility, and Victoria Retirement Community, a skilled nursing and assisted living campus with 90 skilled nursing beds and 69 assisted living units.

The communities will be added to CareTrust’s existing lease with Pristine Senior Living, and CareTrust will supply Pristine with $500,000 to perform physical upgrades. The aggregate investment of the properties with the upgrade costs total approximately $15.2 million. The initial annual rental revenues are approximately $1.41 million. The Pristine lease has a remaining initial term of approximately 14.5 years, with two five-year renewal options and CPI-based rent escalators.

The acquisition was funded by the proceeds of CareTrust’s March 21 follow-on equity offering.

The company also recently acquired an 82-bed skilled nursing facility in Cedar Falls, Iowa. Trillium Healthcare Group took over operations of that facility April 1, 2016, and the facility will be added to CareTrust’s existing master lease with Trillium.

Civitas Senior Living Acquires East Texas Community

Civitas Senior Living has acquired Arabella of Kilgore, a community that includes assisted living, memory care and independent living townhomes. The community is located in Kilgore, Texas.

Civitas Senior Living, LLC will be the management company for the community under the direction of Wayne and Misti Powell, a team that has more than 30 years of experience operating senior living communities in Texas.

The community boasts an in-house movie theater, a courtyard with water features, beauty shop and library.

“Adding Arabella of Kilgore Assisted Living and Memory Care to our growing East Texas is exciting for the Civitas Teams,” Wayne Powell, president of Civitas, said in a statement. “Arabella of Kilgore is an amazing property with a great reputation and wonderful people—makes it a perfect fit for Civitas.”

Rockwood Pacific Closes Sale of Madonna Manor

Rockwood Pacific has closed the sale of Madonna Manor, an 85-unit assisted living facility with 68 licensed beds that has been owned and operated by the California Catholic Daughters of America Home Inc. since 1971.

Pacific Rockwood is a real estate investment firm that assists mission-based organizations in developing and executing plans on real estate deals that exclusively serve older adults. The firm was retained by the Catholic Daughters to conduct a formal solicitation process of buyer candidates and complete the purchase transaction.

Catholic Daughters is a 501c3 and part of an organization that was formed more than 100 years ago.

Written by Amy Baxter

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