November 26, 2022
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LTC buys four properties for $52M

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Westlake Village-based real estate investment trust LTC Properties on April 4 announced the acquisition of four LuxeRehab rehabilitation centers in Texas for about $52 million.

The properties have 339 beds, primarily in private rooms, and will be operated by Ignite Medical Resorts, a current LTC operating partner, according to an LTC news release. LTC is a real estate investment trust that specializes in health care and senior living properties.

The company anticipates receiving rent of about $1 million for the properties in each of the third and fourth quarters of 2022, and about $4.3 million in 2023. The LuxeRehab sites will serve the San Antonio, Austin, Fort Worth and Houston communities, according to Tim Fields, Ignite’s co-founder and CEO.

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, LTC said.

The lease term is 10 years, with two 5-year renewal options, and contains a purchase option beginning at the end of the fifth lease year through the end of the seventh lease year.

LTC also provided Ignite a working capital loan for up to $2 million at 8% for the first year, increasing to 8.25% for the second year and then increasing annually with the lease rate. The company initially funded the acquisition using its unsecured revolving line of credit, and intends to use proceeds from previously announced asset sales that are anticipated to close in the second quarter of 2022 to pay down its unsecured revolving line of credit, the LTC news release said.

In a company news release, LTC CEO Wendy Simpson said her company’s “successful partnership with Ignite has been mutually beneficial, and we are excited to expand our relationship with them through the purchase of these four newer assets that reduce the average age of LTC’s portfolio.”

LTC’s investment portfolio includes more than 200 properties in 29 states with 36 operating partners consisting of real property investments, first mortgages, mezzanine loans, working capital notes and unconsolidated joint ventures. The company’s investment portfolio is comprised of about 50% senior housing and 50% skilled nursing properties.