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LTC Announces Q4 Transactions Totaling $121M

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LTC Properties, Inc. (NYSE: LTC) (“the Company”) announced today $108.7 million of transactions that have closed or are expected to close by December 31, 2012 and one $12.0 million transaction that is anticipated to close in 2013.

The Company announced the details of the transactions as follows:

In December 2012, the Company entered into an agreement to purchase three assisted living facilities with a total of 202 units and three memory care facilities with a total of 136 units for an aggregate purchase price of $94.0 million. The properties have a combined average age of approximately 12 years and all but one of the properties are located in the top 31 Metropolitan Statistical Areas ("MSA"). Three of the properties are located in New Jersey, two are located in Colorado and one is located in Pennsylvania. The Company plans to finance the acquisition with funds drawn from its unsecured revolving line of credit and the assumption of approximately $6.8 million of HUD debt which bears interest at 3.75% and matures in 2051. The transaction is scheduled to close in two phases. The first phase is expected to close prior to December 31, 2012 and includes five properties with a combined purchase price of $82.0 million. Closing of the second phase is subject to the Company's assumption of HUD debt, which is anticipated to occur in 2013. Simultaneous with the acquisition closing in 2012, the Company will lease the five properties, in a master lease structure, to an entity affiliated with Juniper Communities, LLC (“Juniper”) at an initial cash yield of 7.0% and an estimated GAAP yield of 8.1%. The initial term of the lease is 15 years with two 5-year renewal options and annual rent escalations of 1.5% for the first two years of the master lease and annual rent escalations of 2.25% thereafter. Simultaneous with the acquisition of the property secured by HUD debt, the Company will lease the property to an entity affiliated with Juniper under similar terms and conditions as the master lease. Additionally in December 2012, the Company entered into an agreement to fund a $5.1 million two-year interest-only bridge loan to an affiliate of Juniper. The loan will be secured by a 70-unit assisted living facility in Pennsylvania and will bear interest at 7.0% annually increasing by 1.5% in the second year. The Company expects the loan origination to be completed by December 31, 2012.

In November 2012, the Company originated a $10.6 million construction loan to affiliates of SCI Construction, Ltd., an experienced developer of skilled nursing facilities. The loan is secured by an operational 106-bed skilled nursing facility and a 5.62 acre vacant parcel of land in Slinger, WI (Milwaukee MSA) upon which a 106-bed replacement facility will be constructed. At closing, the Company funded $2.6 million of loan proceeds for the borrower's acquisition of the existing, operational facility and the vacant land parcel. Interest on the loan will be paid monthly in arrears at a rate of 9.0% increasing 25 basis points annually. The term of the loan is 10 years and is pre-payable after the 32^nd month following the issuance of the certificate of occupancy. The borrower has leased both properties to entities within the Fundamental family of companies (“Fundamental”), a nationwide group of skilled nursing facility operators. The agreement gives the Company the right to purchase the replacement facility for $13.5 million during an 18 month period beginning on the first anniversary of the issuance of the certificate of occupancy. If the purchase option is exercised, the replacement facility will be added to an existing master lease with other Fundamental affiliates at a lease rate equivalent to the interest rate in effect on the loan at the time the purchase option is exercised.

In October 2012, the Company purchased a 4.59 acre vacant parcel of land in Wichita, Kansas for $0.7 million and entered into a lease and development commitment with affiliates of Oxford Development Holdings, LLC (“Oxford”) in an amount not to exceed $9.9 million for the construction of a 77-unit assisted living and memory care facility. Rent at the rate of 9.25% will be calculated based on the land purchase price and construction costs funded plus 9.0% compounded on the land purchase price and each advance under the commitment. Payment of rent will begin on the earlier of the issuance of the certificate of occupancy or the 15^th month following the land acquisition. The lease has a 10-year initial term, two 5-year renewal options and annual escalations of 2.5%. This transaction was previously disclosed as a subsequent event in the Company's 10-Q for the quarter ended September 30, 2012. Additionally, the Company committed to fund, after receipt of the certificate of occupancy, a $0.4 million line of credit at an interest rate of 12%, maturing in 2017.

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