Sabra Health Care REIT’s CEO Rick Matros announced in the company’s third quarter earnings call that its 49% stake in the Enlivant joint venture with TPG Real Estate, the real estate platform of TPG, would start to be marketed for sale by the end of 2022. The news comes more than a year after the company evaluated the JV and determined that the carrying value exceeded the estimated fair value of its investment, and that the decline was not temporary.
Things have not gotten significantly better since the evaluation, with occupancy at around 75% and 76%, according to Mr. Matros. On approximately $237 million of revenues for the nine months ended September 2022, the portfolio also registered a net loss of $7.2 million, or $3.5 million for Sabra’s stake. And for a portfolio number 157 older, middle-market communities and nearly 7,000 units, a turnaround is an arduous process, with expenses continuing to rise. The Enlivant team will complete their 2023 budgeting process and present it to the board, which will give ownership realistic 2023 financials for its bankers to begin marketing the portfolio later this year.
Sabra intended to sell the portfolio stake in mid-2022 but decided to delay in May 2022 to see if performance continued to improve. Occupancy has increased, but market conditions will not be in their favor. And last year, the REIT acknowledged they might have to record a further impairment on top of the $164.1 million impairment recorded during the three months that ended June 30, 2021.
