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Sunday, Nov 27, 2022

LTC Properties Closes a $62M Joint Venture

Westlake Village-based LTC Properties has added a new partner to its health care real estate business with a $62 million joint venture conducted with Georgia-based PruittHealth.

The joint venture purchased three skilled-nursing centers in northern Florida that were constructed between 2018 and 2021. The nursing centers have a combined 299 licensed beds primarily in private rooms and are operated by PruittHealth, which offers post-acute care services and resources. LTC will be the majority owner of the joint venture.

The properties will be operated under a 10-year master lease, with two five-year renewal options, with an affiliate of PruittHealth. LTC expects to receive net rent of approximately $777,000 during the second half of this year and approximately $4.6 million next year.

According to LTC Chairman and Chief Executive Wendy Simpson, the investment allows LTC to partner with a regional operator that has more than 50 years of history in senior housing and care expertise. PruittHealth also has a charitable foundation, the PruittCares Foundation, that has operated camps for grieving children, family crisis grants and health care education scholarships.

“Including this transaction, we have invested more than $170 million year to date, and remain focused on continuing to identify new opportunities across a variety of financing vehicles, including structured finance products such as unitranche loans, mezzanine loans, and preferred-equity investments, as well as accretive triple-net lease structures,” Simpson said.

Last quarter, LTC originated two mortgage loans for $35.9 million secured by four assisted-living communities and a land parcel.

Neil L. Pruitt Jr., the chairman and chief executive of PruittHealth, said in a statement that his company has prioritized finding solutions to provide post-acute care in the face of “inflation and increased wages.” 

“Operating since 1969, we have developed a successful network of health care services to allow our patients to receive the care they need within the same family of providers. We look forward to continuing to utilize best practices to ensure our patients receive the care they deserve, delivered with compassion and professionalism,” Pruitt Jr. said in a statement.

LTC’s joint venture with PruittHealth comes about five months after the company announced the acquisition of four LuxeRehab centers for approximately $52 million. 

The properties are located in Texas and have a total of 339 beds primarily in private rooms that are operated by Ignite Medical Resorts, a preexisting LTC operating partner. 

LTC said in a statement that it expected to receive rent of approximately $1 million in each of the third and fourth quarters of this year and approximately $4.3 million next year. Rent will increase annually beginning on the third anniversary of the lease by 2% to 4% based on the change in the Medicare market basket rate.

The company has been active in selling properties in addition to purchasing them. In the second quarter of this year, LTC sold three assisted-living communities and a skilled nursing center. The properties sold accounted for a total of $38 million in gains on sales.


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