Five Star Senior Living and Seniors Housing Properties Trust announce a dramatic restructuring of their relationship, and all shareholders seem to lose, at least for now.

Five months after Five Star Senior Living issued its “going concern” announcement, the financially troubled company finally came to an agreement with its landlord, Senior Housing Properties Trust, to restructure its leases.

Looking at the terms, it appears that both companies had a gun to their heads, as there really do not appear to be any winners here. Five Star will have the leases convert to a management contract by the end of this year, with reduced rents in the meantime, which obviously gives them a cash flow break, but will they thrive? I doubt it.

Senior Housing Properties Trust will be forced to cut its dividend by about 60%, something unprecedented in the REIT world. Everyone knew that its former 13% yield was unsustainable, and the new rate looks like a 6% yield based on its lower share price.

Five Star shares plunged 35%, while the REIT dropped 20%. This never should have gotten to this point, and the boards should have worked it out well over a year ago. It didn’t take rocket science to see this happening, at least 12 months ago. Shame on them.