Westlake Village-based LTC Properties, on Dec. 18, filed documents with the U.S. Securities and Exchange Commission that it is selling 600,000 shares of its common stock.
The publicly traded real estate and investment trust has a purchase agreement with RREEF America, a Chicago-based affiliate of RREEF Property Trust, at a price of $41.50 per share. For LTC, the deal is worth nearly $24.5 million.
According to company filings, LTC will use the proceeds of the sale to pay down outstanding debt on its unsecured credit line, fund acquisitions and current development pipeline and for general corporate purposes.
LTC invests primarily in senior housing and long-term care properties through acquisitions, development, mortgage loans and other investments.
On Dec. 19 the company announced it had acquired a senior housing facility in Castle Rock, Colorado, that specializes in memory care, for $9.8 million. The 48-unit property, constructed in 2012 is leased to an affiliate of Senior Lifestyle Corporation under an existing 15-year master lease. The memory care property market is a growing target for acquisitions, the company said in its filings.
According to LTC, the initial cash yield on the purchase is 6.5 percent, with rent increases of 3 percent on the first and second anniversary of the acquisition closing, and 2.75 percent annually thereafter. LTC is also expanding its relationship with SLC, adding 13 assisted-living communities, comprising 500 units, to the SLC master lease. These communities are currently co-leased to Enlivant and affiliates of Extendicare under leases that expire at the end of December 2014. The new lease with SLC has a term of 15 years, with rent increasing by $5.1 million over the current annual rent, with yearly increases of 2.6 percent.
LTC’s expiring master leases with Extendicare and Enlivant, which covered 37 assisted living properties, generated 9.4 percent or $8.2 million of the company’s combined rental revenue during the nine months ended Sept. 30.
While the company is losing some of that rental revenue, LTC is selling 16 properties, consisting of 615 units, to an affiliate of Enlivant for $26.5 million. LTC expects to make $3.9 million on the deal. In addition to that sale, LTC re-leased seven properties with 278 units in Texas to Veritas InCare under a new 10-year master lease. The initial rent will be $1.5 million increasing 2.5 percent annually.
As of Sept. 30, the company had roughly $1.1 billion in gross value of real estate investments consisting of 101 skilled nursing properties, 106 assisted living properties, nine range of care properties, four properties under development, five parcels of land held-for-use and one school. These properties are located in 29 states. LTC also had $173 million of gross investments in mortgage loans.
Building activity during the nine months ended Sept. 30 totals almost $35 million across projects, according to company filings.
LTC has nearly 35 million shares outstanding and a market capitalization of about $938 million. The company’s share price was up 0.4 percent to $41.76 as of press time.