June 9, 2021, Ben Swett, The SeniorCare Investor - In the ongoing plan to reposition its relationship with Senior Lifestyle Corporation, LTC Properties has sold three assisted living communities in Wisconsin. The sales price was $35.0 million, or about $133,100 per unit. The three communities had a combined net book value of $28.3 million, and the estimated gain for LTC on the sale is approximately $5.6 million.
There was no debt on the communities, so the net sales proceeds of $34.0 million were used to pay down the REIT’s unsecured revolving line of credit.
In the first quarter this year, LTC had transitioned 11 Senior Lifestyle assisted living communities in Wisconsin, Ohio and Illinois to two separate operators, giving the new operators a financial break to turn the operations around with first-year rent of $5.2 million and then increasing to $7.1 million in the second year.
And early in the second quarter, LTC transitioned a small memory care community in Colorado (previously operated by Senior Lifestyle) to an operator new to LTC, with a discounted second-year rent of $150,000 increasing to $300,000 in the third year and then traditional annual escalators.
In 2020, Senior Lifestyle accounted for 13.3% of LTC’s rental income, down from 14.6% in 2019, but this will be sharply lower in 2021.