LTC Invests $128 Million in 12 Assisted Living/Memory Care Properties in North Carolina
January 05 2023 - 4:15PM
Business Wire
LTC Properties, Inc. (NYSE: LTC) a real estate investment
trust that primarily invests in seniors housing and health care
properties, today announced an approximate $128 million investment
in 12 assisted living/memory care properties (a combined 937
licensed beds in 568 units). The communities are located throughout
North Carolina and are currently owned and operated by an existing
LTC partner.
The majority of LTC's $128 million investment is structured as a
joint venture and a minor portion is structured as a senior
mortgage loan secured by one property. The investment was funded
from approximately $99 million borrowed under LTC’s line of credit
and $29 million of net proceeds from the sale of 757,400 shares of
LTC’s common stock under its equity distribution agreements during
the 2022 fourth quarter.
Joint Venture: Approximately $117 million of LTC’s $128
million investment is for a 97% ownership in a $121 million joint
venture with the current operator for the purchase of 11
properties. The communities will be operated under a 10-year master
lease with two five‑year renewal options. LTC expects to receive
net rent of approximately $8.5 million during 2023 related to the
joint venture investment, which is covered by in-place cash flow
generated by the properties. The initial annual rent is at a rate
of 7.25%, increasing to 7.50% in year three and escalating
thereafter based on CPI subject to a floor of 2% and a ceiling of
4%. The master lease provides the operator with the option to buy
up to 50% of the properties at the beginning of the third lease
year and the remaining properties at the beginning of the fourth
lease year through the end of the sixth lease year, with an exit
IRR of 9.00% on any tranche of the properties being purchased. LTC
will consolidate the joint venture’s acquired properties and the
acquisition will be accounted for as a financing receivable due to
the seller’s purchase option.
Senior Mortgage Loan: Approximately $11 million of the
$128 million investment is a senior mortgage loan to refinance one
property. The loan carries a two-year term with an interest-only
rate of 7.25% and an IRR of 9.00%
“This transaction validates our strategy of partnering with
strong regional operators with whom we can grow, while continuing
to demonstrate the strength of LTC’s balance sheet and the ability
to execute sizable transactions in a challenging economic
environment,” said Wendy Simpson, LTC’s Chairman and CEO. “We are
starting 2023 from a solid position with an accretive new
investment and remain committed to sourcing opportunities across a
variety of structured finance products and creative lease
structures.”
About LTC Properties
LTC is a real estate investment trust (REIT) investing in
seniors housing and health care properties primarily through
sale-leasebacks, mortgage financing, joint-ventures and structured
finance solutions including preferred equity and mezzanine lending.
LTC’s investment portfolio includes 216 properties in 29 states
with 32 operating partners. Based on its gross real estate
investments, LTC’s investment portfolio is comprised of
approximately 50% seniors housing and 50% skilled nursing
properties. Learn more at www.LTCreit.com.
This press release includes statements that are not purely
historical and are “forward-looking statements” within the meaning
of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended,
including statements regarding the Company’s expectations, beliefs,
intentions or strategies regarding the future. All statements other
than historical facts contained in this press release are forward
looking statements. These forward-looking statements involve a
number of risks and uncertainties. All forward looking statements
included in this press release are based on information available
to the Company on the date hereof, and the Company assumes no
obligation to update such forward looking statements. Although the
Company’s management believes that the assumptions and expectations
reflected in such forward-looking statements are reasonable, no
assurance can be given that such expectations will prove to have
been correct. The actual results achieved by the Company may differ
materially from any forward-looking statements due to the risks and
uncertainties of such statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20230105005971/en/
Mandi Hogan (805) 981-8655
LTC Properties (NYSE:LTC)
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