LTC Properties has invested more than $240 million year-to-date, making 2023 the Westlake Village, CA-based real estate investment trust’s largest investment year since 2015, according to Chairman and CEO Wendy Simpson.
Last year, the REIT invested more than $170 million, making it the company’s strongest investment year since 2015 at that time.
“Making incremental investments with existing partners allows us to work with growth-minded operators who we know and respect, while investing in newer assets allows us to further reduce the average age of our portfolio,” Simpson said Monday in a statement.
Most recently, the REIT invested a total of $61.5 million across two transactions and completed the previously disclosed transition of a portfolio of eight assisted living communities to an existing LTC operator.
The investments include LTC’s $45 million investment in a $54.1 million joint-venture acquisition of an independent living, assisted living and memory care campus in Ohio. The campus now is operated by current LTC partner Encore Senior Living.
The transaction includes a $2.1 million lease incentive. The lease term is 10 years at an initial yield of 8.25%, and it includes a purchase option for the seller during the third and fourth lease years, with an exit internal rate of return of 9.75%. Rent is expected to be approximately $3.9 million per year, LTC said.
Additionally, the REIT invested $16.5 million in a skilled nursing facility in Illinois. The SNF is now operated by a current LTC partner, Ignite Medical Resorts. The loan term is five years at an interest rate of 8.75%.
As LTC Properties previously announced, the REIT also transitioned a portfolio of eight assisted living communities with 500 units in Illinois, Ohio and Michigan to Encore. LTC had been providing assistance to the former operator of the portfolio, the company said. As part of the transition, LTC received a repayment of approximately $1.3 million of deferred rent previously not recorded. Cash rent under the two-year lease is based on mutually agreed on fair market rent beginning in month four of the lease, the REIT said.
