LTC Properties sold two skilled nursing facilities in Florida totaling 240 beds for $42 million, or $175,000 per bed, with expectations of a gain on the sale of approximately $26 million. These two facilities are part of a divestment effort that includes five additional SNFs. An undisclosed operator (one of LTC Properties’ top 10 operating partners) chose not to renew its master lease for the seven facilities, which matures January 2026, as it decided to downsize and exit some states.
The seven facilities are in Virginia (4), Florida (the two sold) and California. By divesting non-core, older SNFs at attractive cap rates, such as in this sale, LTC can redeploy capital in line with its strategy of reducing skilled nursing exposure to support its SHOP growth objective. It noted that the current strong market for private buyers of older assets makes this an opportune time to sell such assets.
LTC Properties expects to receive $120 million in proceeds from the sale of the seven facilities, with this transaction comprising 35% of the proceeds. The remaining $78 million is expected to close at the end of October or beginning of November. Upon completion, LTC’s seniors housing portfolio will increase to approximately 62% of its gross real estate investments, with SHOP representing approximately 19%.
Proceeds from the sale of the two Florida facilities will be redeployed to replace the $8.3 million of annualized GAAP rent from the seven facilities into acquisitions of newer, stabilized SHOP assets consistent with the company’s focus on external growth and portfolio diversification.
