LTC Transitions 11 Properties From Senior Lifestyle to Other Operators

LTC Properties (NYSE: LTC) has transitioned 11 assisted living communities leased to Senior Lifestyle to other operators.

The Westlake Village, California-based real estate investment trust (REIT) disclosed Thursday in its fourth-quarter earnings release that it had changed the leases on 11 properties in Wisconsin, Ohio, and Illinois, going from Senior Lifestyle to two other operators. LTC did not disclose the names of the new operators.

LTC previously reported that it was working on potential operator transitions for Senior Lifestyle properties, as the Chicago-based operator had fallen behind on its rent payments during the pandemic. As of the end of the fourth quarter of 2020, LTC had a portfolio of 107 assisted living and 73 skilled nursing properties in 29 states, with LTC managing 23 of them.

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During the fourth quarter of 2020, Senior Lifestyle paid $3.9 million in rent, representing 83% of its $4.7 million total due. LTC applied the operator’s letter of credit and deposits, totaling $3.7 million, to its 2020 second-quarter rent receivable; notes receivable; and its third- and fourth-quarter rent.

As of Dec. 31, 2020, the operator’s remaining delinquent balance was $1 million, according to LTC.

LTC expects cash rent under the newly transitioned properties’ leases of $5.2 million for the first lease year, $7.1 million for the second lease year, and $7.3 million for the third lease year. The leases escalate by 2% annually afterward.

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A representative for LTC declined to comment for this story, but noted that the REIT would share more information on the transition during its fourth-quarter earnings call Friday morning. Senior Lifestyle was not immediately available to elaborate on the operator transition.

Last December, the REIT had reduced its 2021 rent escalators for operators by 50% in the form of a one-time rent credit.

On the whole, LTC collected 98% of its contractual rent and mortgage interest in the fourth quarter of 2020.

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LTC logged $30.4 million, or $0.78 per share, in funds from operations (FFO) for the 2020 fourth quarter, beating analysts’ expectations.

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