Ventas (NYSE: VTR) on Friday announced that it intends to take ownership of the collateral that supports its approximately $486 million cash-pay mezzanine loan to Santerre Health Investors.
The move will give the REIT full ownership of 16 “large-scale” communities in its senior housing operating portfolio (SHOP), representing nearly 20% of the NOI of the portfolio. The communities total approximately 1,900 units and currently carry a 74% occupancy, and they are “located primarily in attractive markets across five U.S. states,” according to Ventas.
Managing the 16 SHOP communities is an existing and long-time Ventas operating partner. The Chicago-based REIT said it “intends to apply its proprietary experiential insights and data analytics platform, Ventas OI, to drive near-term performance and maximization of long-term value.”
The loan is secured by equity interests in entities that collectively own a pool of medical office buildings, senior housing communities, triple-net leased skilled nursing facilities and hospital assets, according to the release.
“Ventas expects to take ownership of the Santerre Portfolio through a ‘loan to own’ structure that converts the outstanding principal amount of the Santerre Mezzanine Loan to equity, with no additional consideration being paid,” the Chicago-based real estate investment trust (REIT) noted in a press release.
The company said it expects to complete the process of taking ownership of the Santerre Portfolio in the second quarter of 2023. The company’s ownership of the equity in the Santerre Portfolio will be subject to an existing approximately $1 billion non-recourse senior loan, secured by the assets in the portfolio.
The loan matures in June 2023, but Ventas expects to exercise a right to extend that maturity to June 2024, per the release.
“The company expects to fund the repayment of the Santerre Senior Loan through a variety of capital sources and asset sales on a long-term basis,” the release stated. “The company remains committed to maintaining its BBB+ rating and preserving a strong balance sheet.”
Santerre Health Investors was formed after Colony Capital rebranded as DigitalBridge Group Inc. (NYSE: DBRG) in 2021 and sold 83 skilled nursing facilities — among other health care assets — to Highgate Capital Investments and Aurora Health Network.
Tim Regan contributed writing to this story
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