LTC Properties (NYSE: LTC) is investing $128 million in 12 assisted living communities as part of a joint venture with one of its current operating partners.
Of the $128 million, the Westlake, California-based is putting $117 million toward acquiring a 97% stake in a joint venture with the operator for the purchase of 11 properties. The remaining roughly $11 million is being put toward a senior mortgage loan to refinance one property.
Under the joint venture, the communities will be operated under a 10-year master lease with two renewal options. The operator has the option of buying as much as half of the properties in the beginning of the lease’s third. The operator will then have the option to buy the remaining properties at the beginning of the fourth lease year.
The 12 communities total 937 beds in 568 units in assisted living or assisted living and memory care communities spread throughout North Carolina.
LTC did not identify the operator in its announcement. A representative for the REIT was not immediately available for comment.
To finance the investment, LTC sold more than 750,000 shares of common stock during 4Q2022 for $29 million in proceeds in addition to $99 million borrowed under LTC’s line of credit.
The investment comes as the first major move of 2023 by the LTC Properties after the real estate investment trust (REIT) finished up its most active year of investment activity in seven years.
LTC’s total senior housing footprint currently stands at 216 total properties, 125 of which are assisted living communities, with 32 operating partners in 29 states.
North Carolina — which includes one of SHN’s Markets to Watch — is one of LTC’s most active states with 21 standalone assisted living or assisted living/memory care communities representing 10% of the company’s entire senior living portfolio.
All told, the company invested over $170 million in 2022, representing the highest level of investment since 2015. And LTC Chairman and CEO Wendy Simpson has indicated that the REIT is looking to increase its investment activity in the coming year.
“We believe that LTC’s investment activity will continue to ramp up as we become even more competitive, bringing flexible and creative financing to strong regional operators who are seeking growth capital at fair rates,” she said in October.
LTC stock closed at $36.01 per share on Friday, up 2.16% on the day.
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